Inside the Customer Experience

Retailers utilizing a mystery shopping program have come to understand that evaluating the purchase transaction is a very important part of the program – not only can companies ensure that cashier staff are asking for email addresses, offering enrollment in loyalty and/or credit card programs, and ending the transaction in a positive manner, but they can ensure that this last leg of the customer journey ends on a positive note – one that will leave the customer with a positive experience and may be more likely to return.

On a peripheral note, including the purchase, along with a maximum reimbursement spend, can do more than that. We’ve studied the purchasing behavior of mystery shoppers to determine how they spend at certain retailers, and what might make them spend more. Traditionally, when a client sets a maximum reimbursement limit for mystery shops, the mystery shoppers understand that they will be reimbursed up to that amount, and any overage is at their expense.

It’s an interesting aspect to look at….do shoppers tend to spend the maximum, less than that, or go overboard?

It all depends on the type of shop, what the maximum reimbursement is, and the state of mind of the shopper.

Our informal research has shown that, in the example of a retailer who sells clothing and accessories, a higher reimbursement typically results in a higher spend. From the mindset of the shopper, they may see that a reimbursement is maybe $10, and that may sway their decision to focus on smaller items during the evaluation, perhaps accessories or less expensive clothing items. On the other hand, a larger reimbursement may set their mind on the bigger ticket items, realizing that if the reimbursement is $30 and they see an outfit they love for $50, they may be more inclined to purchase it.

We have found that shoppers tend to spend approximately 10-15% more with a lower reimbursement, and up to 25% more with a larger reimbursement. This results in additional sales for the company, making the program a bit more profitable. This is one way to think of the reimbursement as a cost effective measure of your mystery shopping program.

The shopper’s state of mind is also important – are they a current customer of the retailer, or is this their first visit? First time shoppers who have a positive experience may be inclined to be regular customers after that initial shop, which again results in a new customer and additional sales. Comments from reports suggest that mystery shoppers, especially those who have a strong customer service experience, tend to be very likely to return as a true customer. Report comments indicate that they may have not visited the store in the past because they weren’t familiar with the brand or their perception was different with regards to what the store had to offer in terms of products, or it was a retailer they had not previously heard of.

It’s important to consider reimbursement for mystery shopping programs for these reasons, but it’s also a good way to think of the reimbursement in terms of cost efficiency. Typically, the per shop costs are reduced, even if slightly, when reimbursements are included for purchases, and a wider view of the entire experience is captured. Of course, depending on the retailer, a reimbursement cannot be offered all the time – you wouldn’t want to set a reimbursement for a high end furniture store, for example – but for many retailers, adding the purchase transaction to the evaluation can be effective and a valuable part of your program.

Mystery shopping is an often used tool for companies to monitor the customer experience and ensure that employees meet key operational standards. Sometimes, though, it can uncover more than that.

In the last 15 years, Ann Michaels & Associates has found that clients often times learn more about operations from their mystery shopping reports. Shoppers have reported a variety of additional information through keen observational and reporting skills, including:

• Incorrect product information
• Misinformation provided to customers, showing a trend by geography, which indicated that training procedures were not properly followed in a particular region of the company
• Employees, who are disgruntled or simply being overly honest, suggesting to customers that they visit the competitor because the prices are better

Most recently, an article out of the UK illustrated how a mystery shopping program uncovered the fact that bad advice was being offered to customers, likely as a result of the staff not following proper procedure in learning more about the customers and their financial situation prior to offering advice and suggestions.

Santander UK was recently fined 12.5 million after regulators employed a mystery shopping program which revealed significant failings in providing financial advice to customers. The exercise showed that Santander UK was deficient in the following areas:

* failed to make sure that its advisers were fully getting to grips with customers’ personal circumstances before making a recommendation, including understanding how much risk they were willing to take;

* failed to ensure that customers investing were given clear and not misleading information about its products and services;

* for Premium Investments, failed to carry out regular ongoing checks to ensure the investment was still meeting customer needs;

* failed to make sure new advisers were properly trained before being allowed to give investment advice; and

* failed to properly monitor the quality of investment advice which meant that, where poor advice was given, it was not always picked up.

Financial advice is a tricky subject, and consumers need a lot of help and guidance in this area. Unfortunately, for those who do not know much in this area tend to rely heavily on advisors, and trust that they are providing the customer with accurate information and make suggestions that are best for them. In this case, it uncovered the fact that this was not happening, and much of it revolves around training and monitoring of the staff.

When consumer trust is broken, especially on a large scale such as this example, it’s hard to recover as a company. When this concern was first brought to light, Santander UK made the decision to halt advice offerings at its branches, and ultimately closed down the division. It’s a sad ending for this story, but its one that highlights the importance of continually monitoring staff performance, knowledge, and insight, especially in the area of financial investments. It’s better to implement an ongoing measurement program in a proactive manner to pinpoint challenges early on rather than finding out the hard way.