Unraveling the Mystery

It's widely acknowledged that in an industry where everyone can offer the same products and no one can beat Wal-Mart on price, one of the few things that can make a supermarket stand out from the near-clone across the highway is customer service. And there's a growing recognition that outsiders are better judges of service than company employees.

That's where mystery shoppers come in. These representatives of outside firms look like typical customers, but they're paid to pay attention. Mystery shoppers size up the parking situation and note whether shopping carts are available even before they enter the store. Inside, they may be checking on everything from whether service-counter workers know anything about what they're selling to how long they have to wait in the checkout line. And as they pass through the aisles they're especially sensitive to out-of-stocks and dirty floors, shelves, or displays.

A day or two later, the store manager will receive notification, usually by e-mail, that the shop took place and get a report on the high and low points of the shopping experience the store provides. How that information is used can have a lot to do with whether a company can improve its image with customers or simply anger and alienate its employees, according to executives of companies that provide mystery shopping services.

Reward Mechanism

Forward-thinking managers will use mystery shops to build their teams, create training opportunities, and reward good employees, says Rodney Moll, CEO of San Diego-based TrendSource, which has been doing mystery shopping for about a dozen years.

Citing a successful program at a major supermarket chain he wouldn't name, Arcadio Roselli, president of Service Evaluation Concepts in Plainview, N.Y., said, "The reason that it works well is that it's more a reward mechanism. It's really designed to catch people doing things right versus making an example of someone who's doing things wrong, because that's where the defense mechanism comes from."

Roselli, whose firm has been in business since 1987, says companies need to be careful of the spin they put on a mystery shopping program. "Sometimes, at least at the front line, it's interpreted as a spy mechanism more than as a tool for improving the operations of the store," he says.

Some companies have new employees operate as secret shoppers during their orientation to help them better understand what will be expected of them, a training technique Roselli says is not only effective but also makes them more likely to support the program.

"It's more difficult when you're dealing with a unionized work force, and it also depends on if it's used as a stick or a carrot," says Robert Sinclair, founder of the 14-year-old Sinclair Service Assessments in San Antonio. "One of the things I think can set a program up for failure is if you make the mystery shopping result a significant factor in whether the managers receive a bonus or not."

Safeway and a couple locals of the United Food and Commercial Workers union in the San Francisco Bay area clashed over mystery shopping in 1998. Among the things secret shoppers were checking for Safeway was compliance with its requirement that store associates smile and greet customers. Some female workers complained that they had been propositioned by male customers who mistook the required behavior for flirting.

Going the Extra Mile

A representative from UFCW headquarters in Washington, D.C. did not respond to a request to state the union's views on mystery shopping for this article.

Mark Michelson of the Atlanta marketing research firm Michelson & Associates recalled Kroger's effective use of mystery shoppers during promotional periods about five or six years ago. "We'd look for employees going out of their way to help customers and reward them with on-the-spot incentives, things like tickets to movies and gas stations and restaurants," he said.

Mystery shopping has grown significantly in recent years and is being used by companies in all retail channels. The Dallas-based Mystery Shopping Providers Association was formed in early 1998 and now has almost 130 member companies, according to executive director John Swinburn. The association's main functions are information-sharing and the development of common practices and common ethical standards, Swinburn said.

There are also consumer Web sites that promote the benefits of being a mystery shopper and provide links to the home pages of the companies that do the hiring. Qualifications vary by company, but dependability and the ability to accurately file reports on the shopping experience are paramount.

While saying that each mystery shopping program is customized for the retailer that orders it, Michelson says those for grocery chains frequently focus on the operational aspects of the store rather than customer service. He finds that frustrating. "It's like the difference between an accountant running a business and someone who's from a marketing background running a business," he says. "They're very interested in shaving the costs, when I think personally they ought to be investing and attracting the right kind of customers and meeting their needs."

Michelson says that attitude is reflected in other research he does for supermarket companies. "It's sad when I do focus groups for a grocery chain and no one comes from the company," he says. "When I do them for other retailers I've got the president and the CEO there."

A Shopper's Yardstick

Sinclair says the greatest value of mystery shopping is to let a chain measure itself with the customer's yardstick. "So many times companies do things because it makes perfectly good operational sense, but to the customer it doesn't make a lot of sense," he says. Such a disconnect occurs when stores keep only a few checkout lanes open in order to meet their payroll cost objectives while inconveniencing customers who have to wait in long lines, Sinclair says.

Mystery shopping providers are unanimous in boosting customer service improvements as a way to help the bottom line. Moll says an audit by Arthur Andersen of one quick-service restaurant chain served by TrendSource found a 1-percent improvement in a store's mystery shopping service score translated into an additional $5,000 a month in sales.

According to Sinclair, the biggest area for improving customer satisfaction in supermarkets is the checkout, and he urges training cashiers to view shoppers in terms of their lifetime value to the store rather than simply what's on the conveyor belt at the moment.

Power of Suggestion

Supermarkets appear to be lagging in the pursuit of incremental sales dollars at their service counters. Mystery shopping providers say there's not much suggestive selling going on. Roselli says the store manager usually has the most impact on whether employees try to make the additional sale and that managers who perform well in that area are the exception.

There are also geographical differences, he says, with the South being the place where the most suggestive selling takes place. The Northeast, Roselli adds, is not very good in that department and the West is even worse.

Sinclair says his firm has developed soft-selling techniques that have helped improve results in some service departments, but Michelson sees a long way to go. "None of these people are interested in add-on sales or adjacencies or anything like that," he says. "Yeah, let's put the seasoning over by the meat, but do they ever recommend, 'You ought to try this seasoning with this meat'? It's on such an individual level at that point. If you've got a butcher who's really enthusiastic about the customers and really enthusiastic about cooking, then they'll make the recommendation. But that's one out of every 100."