The Essential Guide to Mystery Shopping

Delivering on Your Brand Promise

Mystery Shopping Is a Powerful Tool for Monitoring and Improving the Human Experience of Your Brand.

It can be used to see your business from the customer’s point of view in order to reveal shortcomings in your Customer Experience (CX), operations and strategy that may have gone overlooked. These discoveries can then be used to improve compliance, customer satisfaction, and alignment with your expected brand experience.

Whenever customers interact with your business, you want their experience to be in line with your brand promise and the values of your company.
However, it can be hard to tell whether this experience is delivered effectively when looking from the inside, out. Mystery shopping gives a clear view of the experience your business provides from the customer’s perspective.

In this guide, we aim to provide a thorough view of what mystery shopping is, and the benefits it provides. That is, how it can be used to boost sales, improve the experience of customers and front-line employees, and ultimately, grow your business.

Contents

Clothes hanging on a rail
Clothes Blue

What Is a Brand Promise?

Your brand promise is the experience a customer should expect to receive every time they interact with your company. A brand becomes stronger the more consistently it delivers on that promise. 

A business’ brand promise will often be broadly summarized in its slogan.  Examples of this would be: 

BMW PNG (1)

The Ultimate Driving Machine
- BMW

Coors Light Logo

The World’s Most Refreshing Beer
- Coors Light

These brands want their products or services to be the exemplifications of their respective brand promises. In BMW’s case, the aim is to create cars of a quality that other manufacturers’ offerings will pale in comparison with. 

Coors Light aims for a similar goal, by aiming to provide a beer that will be a customer’s first choice when they order an alcoholic drink at the end of a long day.

Other examples of brand promise instead focus on the entire customer experience provided. Examples of this include:

Starbucks PNG

To inspire and nurture the human spirit - one person, one cup, and one neighborhood at a time.
- Starbucks

eBay-Logo PNG

Shop on eBay with complete confidence
- eBay

For these, the view on the customer experience they want to provide is more holistic. Starbucks wants customers to leave their shops in a more positive and invigorated state than when they arrived, and by extension, to improve the neighborhood surrounding the shop with the services (and coffee) they provide. 

eBay wants their customers to feel safe buying and selling through their platform, being able to operate without fear of being scammed, or products arriving in a different condition to the way they’re depicted on the site.

However, brand promise is merely a business’ intent. The reality of the received customer experience may be extremely different.  

For BMW and Coors Light it’s relatively simple for stakeholders to discover when there is a disconnect between the two. If a model of BMW is released which is rife with faults that detract from the driving experience, or a new variant of Coors Light is released that most customers consider unpleasant, the feedback will be easy to acquire, and problems that can be rectified will be comparatively obvious.

For businesses like Starbucks and eBay, the first sign of a failure to deliver on brand promise will likely be a decrease in business and sales. This, on its own, is not easy to translate into a change in strategy. The exact nature of the problem needs to be identified, but this again, can be hard for major stakeholders to do, as it requires viewing the business from the perspective of a customer. This is where mystery shopping comes in.

Yellow Beer 3 (1)
Starbucks Cup

What Is Mystery Shopping?

Mystery shopping is when undercover agents are dispatched to a business under the pretense of being ordinary customers. However, unlike an ordinary customer, these agents are informed ahead of time as to what the intended customer experience should be. While there, they will evaluate some element of the human experience, as specified by the brand that commissioned the audit. The areas evaluated will be measured by specific Key Performance Indicators (KPIs) that relate to the entire ecosystem of the brand (people, policies, procedures, product, recruiting, hiring, training, etc.) 

These mystery shoppers will report back after their interaction with their findings. The company that contracted the audit can then use this evidence-based feedback to identify areas for improvement, whether that’s in service; legal or franchise compliance; employee knowledge; training; engagement; or a host of other areas.

An example of a measurable KPI would be whether an employee at a fast food restaurant asked if the mystery shopper wanted fries with their burger. This KPI can then be used to judge the prevalence of the upsell across all business locations.

What Does a Mystery Shopper Do?

A mystery shopper’s role is to interact with the customer-facing side of a business, under the pretense of being a customer. However, they will have been armed with the knowledge of the intended and designed experience that a customer should receive. They will also have been given a predetermined list of tasks to perform, such as buying particular items or asking the staff about something. Their observations will be based on certain non-negotiable KPIs that will be included in their report at the end of their interaction. Management can then note these observations and create accountability around them, which can be tied into a performance-based compensation framework. 

In essence, the mystery shopper acts as an undercover CEO. Through their actions and the feedback they produce, they give a view of the customer experience that would normally be impossible for senior stakeholders to get from internal audits. This data can also be produced on a scale that internal “undercover CEO” visits could not hope to match.

Put broadly, mystery shoppers can be deployed to measure anything related to customer interactions with a business.

Benefits of Employing a Mystery Shopping Service

Mystery shopping can be used to measure every element of customer experience, either quantitatively or qualitatively, against the intended customer experience. The ways in which it can be used are incredibly broad in scope, and will vary greatly depending on the aims of the business deploying it. 

Here is a list of some of the benefits Mystery Shopping can hold. Be aware that this list is not exhaustive, however, as mystery shopping can be employed to measure so many elements of customer experience, and there are just as many benefits to be gained from it.

Identify areas for improvement

The basic purpose of mystery shopping is to ensure frontline customer facing staff comply with the non-negotiable expectations established in their training, and identify ways to improve that may have gone overlooked. By looking at the designed customer journey from the customer’s perspective, as well as getting a view of the day to day operation of a store when staff don’t think they are being audited, you can see how your customer-facing staff operate, day-to-day. 

Examples of areas that can be assessed include availability of products, buyer interactions, the effect and prevalence of promotional programs, legal compliance and more.

Identify areas for improvement

Employee Engagement and knowledge

Being aware that any customer could be a mystery shopper increases employee engagement with their work, as there is no scope for providing substandard service due to lack of effort. 

The results of audits and the impact on corresponding KPI’s can also be revealed to employees, with incentives such as bonuses offered for positive outcomes.

By rewarding employees in this way, you can inspire healthy competition and increase proactive engagement with customers, as well as improve staff happiness. Happy employees are less likely to seek jobs elsewhere, reducing turnover and saving you time and money spent on recruiting, hiring, and training new hires.

Employee knowledge

Employee Knowledge

A common frustration for customers is when staff are unable to answer questions on the product or service they sell. According to PriceWaterhouseCoopers, 46% of customers will abandon a brand if their employees are not knowledgeable.

Mystery shopping audits can reveal these knowledge gaps, which can then inform changes in coaching and training. Training materials can be updated to provide greater emphasis on certain areas of knowledge, and employees who have struggled to answer questions posed by mystery shoppers can be offered refresher courses to update their knowledge.

Employee engagement

Training

By identifying the areas in your customer experience that don’t live up to your brand promise, you reveal parts of your training that could be improved upon. As new technologies emerge, legal regulations change, and the market shifts, so training resources will need to be revised.

If training is not updated to reflect these changes, staff will become increasingly ill-informed about the nature of their industry, poorly equipped to utilize new technology, leading to inefficiencies in workflow, and may even risk breaching legal restrictions on their behavior.

Conversely, by updating training materials regularly, businesses may discover areas that can now be omitted from their onboarding process.

The result is either a reduction in the time needed to train up new employees, or improved training outcomes for the same time cost. Either way, there should be a positive impact on your bottom line, whether due to reduced training costs or increased productivity.

Training

Decision Making

The evidence-based, quantitative data produced by a mystery shopping report can enable a business’ stakeholders to make more informed, impartial decisions.

By monitoring, measuring and maintaining your current brand standards in an unbiased manner, from an outside perspective, these decisions can be made with a greater understanding and confidence of how it will affect customers and frontline employees. Without the aid of mystery shopping, it can be hard for executives to gauge these impacts, as they typically have limited interactions with either group.

The greater understanding provided by mystery shopping data means decisions made will have a higher chance of successfully improving the customer experience.

Decision Making

Customer satisfaction, retention and brand advocacy

The feedback provided by a mystery shop can give you an insight into where your CX fails to line up with your designed brand experience. Doing this will drive ROI on your promotional, advertising and social media investments. Not to mention the most important KPI of all, “conversion”.

By pinpointing these failings and then improving them, you can enhance the overall customer experience, which leads to increased customer spend. In fact, 86% of buyers are willing to pay more for a great customer experience, according to Forbes.

Better customer experience also increases the likelihood of a customer becoming a brand advocate. As 92% of people trust word-of-mouth recommendations, brand advocates are a priceless resource for a company.

In fact, recommendations from friends or family are 50x more effective than advertising at generating a sale, making customer experience a far more worthwhile investment. This is why 81% of organizations now consider CX as a major competitive differentiator.

 

Customer satisfaction, retention and brand advocacy

Increasing individual sales value

All the above serves the aim of aligning designed customer experience with received customer experience. In essence, delivering on your brand promise, and improving your CX in the process. The resultant improvement in customer retention will increase the average value of each individual sale, as studies have found repeat customers spend 67% more per transaction than new customers.

Increasing individual sales value
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Boosting efficacy of promotional programs

A promotion’s effectiveness is hard to measure without knowing how widespread its rollout has been.

For example, if a promotion is only offered by 30% of locations, you would know that by making sure all stores employ it, you could increase the value it produces by up to 2.3x.

However, you would only know for sure that it wasn’t being offered universally by using mystery shoppers to assess where it is and isn’t being offered.

In this way, mystery shopping can help to differentiate between programs that are producing results, but which need to be pushed more, and ones that are being offered on a large scale, but which aren’t creating any value.

Boosting efficacy of promotional programs

Enforcing standards and compliance

Mystery shoppers can be deployed to evaluate the degree to which locations (and employees) are adhering to federal, state and municipal regulations, franchise expectations, and brand guidelines.

As a mystery shopper is seen as “just another customer”, they can observe whether staff comply when they are unaware they’re being monitored. By contrast, if an official audit was performed instead, employees may behave differently to ensure they pass the test. Only mystery shopping can give a clear picture of typical staff behavior.

In this situation, mystery shopping serves two purposes. First, it can unearth rule-breaking or illegal behavior that internal audits could not. Second, if a staff member is aware that any customer could be a mystery shopper, they are more likely to keep their standards of behavior high at all times. Finally, it gives the enterprise the ability to reward the behaviors and KPIs achieved of those who get it right, elevating employee engagement.

McDonalds Sign
Enforcing standards and compliance

What Different Mystery Shopping Services Are Available?

In-Person Mystery Shopping

The most well-known form of mystery shopping. A mystery shopper will be paid to visit a brick and mortar location, with a task to perform there. This task will be something like buying a particular item, asking the staff about a certain product, or requesting advice.

In Person Mystery Shopping

Video Mystery Shopping

A variation on In-Person Mystery Shopping, video mystery shoppers will visit a location and record their entire shopping experience, usually with a hidden camera. This type of mystery shopping has limited application, however, due to various states’ laws on the consent necessary to record an interaction.

Video

Social Media Mystery Shopping

As online retail continues to grow, it’s also become more important to ensure a company’s social media presence represents the brand’s values. Mystery shoppers will interact with social media posts and ask questions via direct messages. They can then report back with their findings, possibly bolstered by screenshots of their interactions.

Social Media Mystery Shopping

Online Mystery Shopping

Purchasing online has become the standard for many people today, and brands have embraced that with online stores that offer their full range of products.

2 in 3 customers say that a frustrating website experience would hurt their opinion of the brand as a whole, and 57% would not recommend a business that had a poorly designed mobile website. These online stores are still a part of the company, and as such, any interaction should deliver on brand promise.

An online mystery shopper may purchase an item from an online store in order to assess website functionality and ease of use. Alternatively, they may need to communicate with the chatbot to check if it can answer common questions a customer may have.

Online Mystery Shopper

Telephone Mystery Shopping

Many companies will have a helpline, and for some industries, interactions over the phone are the standard way of doing business. These phone calls need to be made in accordance with brand guidelines, and adhere to both legal obligations, or brand expectations.

Mystery shoppers may assess elements of the telephone customer experience including operator knowledge and phone manner, as well as call wait time.

Telephone Mystery Shopper

Interview and Hiring Standards Auditing

Some companies will ask mystery shoppers to pose as job candidates, in order to determine whether their hiring staff behave in a professional, legal and ethical manner.

This may involve deploying fake interviewees with similar resumes but of different racial backgrounds, gender identities or sexualities, or who have physical or mental disabilities, in order to assess whether there is any unfair bias in the business’ hiring processes.

Interview Mystery
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Employing a Mystery Shopping Service: How to Proceed

Finding a Mystery Shopping Provider

Historically, finding a suitable mystery shopping agency was largely done via word of mouth recommendations. However, today, many businesses perform their research online. There are resources available such as the Mystery Shopping Providers Association (MSPA), which has a list of agencies searchable by location, industry, services and whether or not they are MSPA associates.

The intent of the MSPA is to establish standards and ethics for the mystery shopping industry, and – in doing so – improve the overall image of the industry.

However, the MSPA is not without its failings. In our eyes, the MSPA places very little effort in auditing its membership to ensure ongoing performance standards are met. Furthermore, it is a major disappointment to us that the MSPA does not conduct syndicated studies to help the public and industries served recognise the best in class brick and mortar retail, ecommerce and fulfillment operations worldwide.

Selecting A Provider

When choosing a provider to work with, you should look for one with years of experience and a large body of work. A reputable agency will have case studies of successful audits they have performed, as well as testimonials from businesses they have worked with.

It is also worthwhile asking about their process for onboarding mystery shoppers. A well-established provider will have a system in place, such as taking demographic details. Some will have a system of knowledge transfer certification, where shoppers are given information on the brand they will be auditing, then quizzed on it, in order to verify their knowledge. Only if they can prove that they have absorbed the information will they qualify to perform more in-depth audits.

These details are crucial to ensure the mystery shopping company you wish to engage has the framework necessary to perform more in-depth audits, and they can be trusted with the sensitive information about your company that they will be handling.

Your First project

When establishing a relationship with a mystery shopping provider you should start with a small pilot project as a proof of concept. This will give you an idea of how well the values of your companies line up, and provide them with an insight into what your business values most.

Being well-aligned is vital because in the long term, the mystery shopping company shouldn’t feel like a separate company, but part of your company. It’s a partnership, and they will be collecting intimate data about your business, so you need to be sure they can be relied upon.

What You Should Do To Prepare

The most important thing is to know exactly what you want the mystery shop to measure. You should already have a strategy in place, and the success of its implementation will depend on certain Key Performance Indicators (KPIs).

The mystery shoppers will be armed with what your intended customer experience is, and informed as to what they should be assessing. This could be whether they were upsold to, if the staff were wearing their uniform correctly, or if the venue was suitably clean.

What Industries Can Benefit from Mystery Shopping?

Retail

Retail

Mystery shopping is well-established within the world of retail, and the industry benefits enormously from mystery shopping initiatives. This is largely on account of the huge number of touchpoints that can be analyzed, and the benefits to be gained from the feedback of a mystery shop (as detailed above). Shoppers may be asked to assess customer service staff behavior, availability of products, store layout and cleanliness, and whether they were offered a promotion they qualified for, to name a few.

Due to the level of competition in every retail market, it’s very easy for buyers to switch businesses if they are unhappy with the customer experience their current choice provides.

According to Accenture, $1.6 trillion dollars is estimated to be lost to customer churn by US businesses every year. A huge proportion of this will be from the retail industry. By ensuring excellent customer experience, businesses can both increase their customer retention, and create more brand advocates, potentially drawing customers from other businesses.

Leisure and Hospitality

Leisure and Hospitality

An incredibly diverse sector, the leisure and hospitality industry is built on customer experience. The large customer base provides a greater amount of data to drive insights, and having multiple locations makes it easier for a brand to create a universal template of standards to be adhered to. Some examples of points mystery shoppers would be asked to assess are: whether staff greet customers in the correct manner, whether particular services are offered, and if they were asked about any requirements they may have.

As the focus of this industry is upon providing a particular customer experience, it is easier to establish the KPIs to be assessed. This is because the behavior of staff, and their interactions with customers will be heavily choreographed, and thus can be monitored quantitatively (e.g. “Were you greeted in the correct manner” or “Were you offered fries with your order?”)

Lesiure

Fitness

A gym or health club can be assessed by mystery shoppers for cleanliness, the training levels of staff, the state of maintenance of the equipment and facilities, and the other services offered. Keeping customer experience to a high standard in all of these is vital in such a competitive industry, as fluctuations in membership numbers will impact finances greatly.

Health

Health & Medical

The urgency to preserve life involved in many areas of the healthcare industry limits the scope of potential mystery shops. It would be highly unethical to take up the valuable time of a medical professional in a critical care setting by pretending to be a patient. Nevertheless there are still sectors where using mystery shoppers can work to improve patient experience, such as phone consultations, walk-in clinics and patient visits. Additionally, hospitals and clinics can be assessed for their level of cleanliness and hygiene, as well as to ensure that doctors are legally compliant in their prescription of medications.

Assisted Living

Assisted Living Facilities

Nursing home mystery shopping audits will involve contacting the residency to organize a tour, pretending to be seeing how suitable it is for an elderly relative. These visits can even be unannounced to ensure the home is not prepared. They may also assess how staff interact with you and the residents, as well as how quickly matters like payment are brought up. 

Mystery shops may also be used to ensure compliance with laws governing the treatment of residents, and the necessary levels of hygiene that should be maintained.

Housing

Housing

Mystery shoppers can be employed to check the quality of the customer service provided by housing groups, including billing and email and phone messaging. They may also be used to judge the quality of the accommodation, and whether it has been suitably maintained.

B2B

B2B

Businesses that sell to other businesses can still benefit from the insights that mystery shops produce. These programs are commonly more complex than B2C audits, however, and involve a greater degree of planning.

Due to the longer sales cycle, and larger number of hands a B2B sale normally passes through, there will be several stages that need to be planned out in advance. The buyer profiles will be highly specific, and the scenarios used have to be designed around the particulars of the company being audited. 

Shoppers may be used to audit the sales process to ensure legal compliance, the speed of response to enquiries, and the behavior of sales staff, among other points.

Competitive Offerings

Competitive Offerings

Companies aren’t limited to auditing themselves through mystery shopping initiatives. They can also arrange shoppers to be deployed to their competitors in order to compare and contrast approaches taken. This could be anything, from customer service and promotional campaigns to their level of compliance with the laws and restrictions that govern your industry.

Interview

Job Interviews

Mystery shoppers can be used to evaluate more than interactions with customers. They can also pose as candidates for offered positions, to get an outside view of the hiring process and ensure interviewers represent the company and its values well.

They can also be used to ensure no unethical practices or discriminatory behaviors are employed by interviewers.

How Can I Become a Mystery Shopper/Brand Agent?

At Service Evaluation Concepts we have three tiers of agent, Research Participants (our term for Mystery Shoppers), Brand Agents and Certified Brand Agents.

Mystery Shoppers (Research Participants)

This is the base level of agent. A candidate is expected to supply the bare minimum of demographic details (male/female), as well as a phone number and email address. 

As most mystery shopping deployments require a greater degree of specificity when it comes to the participants’ demographics, the opportunities available to those at this tier will be broad, such as visiting a fast food restaurant or a clothing store.

Brand Agents

The next tier up is Brand Agents. A Brand Agent will have provided their full demographic information and have taken a test to demonstrate they are aware of their responsibilities, accountabilities, and the timings of their payments. A brand agent will receive more specific jobs that are relevant to their demographics. For example, if an agent stated that they wear glasses, they will be notified instantly when an opportunity arises to audit an optician.

Certified Brand Agents

A Certified Brand Agent is a Brand agent that has read the instruction set for a particular brand, and been tested on this information to verify their understanding. Once the test has been passed, they will be qualified as a certified brand agent for that particular brand. These individuals will be called upon to perform more in-depth evaluations, such as ensuring compliance with the laws governing the business’ operations.

Covert and Overt Agents

Covert Agents

Covert agents are your traditional mystery shopper. They are sent to interact with a business’ customer-facing employees and report back with their findings. This feedback will be sent to decision-makers in the company and used to inform strategy.

Overt Agents

An overt agent is an agent of the brand. They are no longer a “mystery shopper”, as their visits are expected, and their feedback is used by frontline workers in order to improve their performance in real-time. Their interaction with a business’ employees (and/or customers) may be more akin to an internal audit, customer intercept or a planned training exercise.

What Data Do Mystery Shoppers Produce?

At Service Evaluation Concepts we have three tiers of agent, Research Participants (our term for Mystery Shoppers), Brand Agents and Certified Brand Agents.

Reports

Each mystery shopper will fill out a report like this:

Example Report

On this the mystery shopper will record their interactions during their visit according to the KPIs they were asked to monitor. In this instance, the mystery shopper needed to see if the staff would greet customers in the way they are supposed to, if they kept to the rules when selling items, if the shopper’s interaction with the staff member was satisfactory, and whether the staff were wearing their company pins.

There’s also a record of the previous shops that have been performed, and the score achieved by the staff in those visits. So, if a business has put measures in place to improve points they had previously been failing on, they can gauge how effective these have been.

Video/Pictures

Mystery shops performed with video recording can be extremely helpful, as they provide video data with as little bias from the shopper as possible. Instead of, or alongside a written report, a mystery shopper will supply the video of their visit, so the client can view all interactions and see exactly what took place.

Likewise, images can be provided as evidence of poor cleanliness, or other failings that can be captured in a photo. This can serve as better proof than a simple written account.

Audio

Some mystery shoppers tasked to interact with a business’ telephone-based operations will be able to provide recorded conversations with their report.

However, this will depend on the local legislation surrounding the consent needed to record phonecalls. 

Much like video, audio recordings can provide a more unbiased perspective on the interactions a shopper had with a customer service representative than a text report would provide.

Emails Received

Mystery shoppers who have been interacting with the online aspect of a business will likely receive several emails over the course of their mystery shop. These can provide added context to their report, and be used by the client to improve language used in online communications.

Conclusion

In this guide we have covered what a brand promise is and its importance to a business, as well as how the effectiveness of its implementation can be measured by mystery shopping initiatives.

We have also discussed what a mystery shopper is, what they do, and how mystery shopping initiatives can be used to improve the customer-facing aspect of businesses in almost any industry.

At Service Evaluation Concepts, we have worked with businesses from a myriad of industries, from local stores to international corporations, for over 35 years. We have helped businesses across the world improve to inspect what they inspect, and have provided actionable recommendations to help these companies deliver upon their brand promise, ensuring greater customer and employee satisfaction, brand loyalty, revenue and business growth.