The recession that began in 2007 has affected the mystery shopping industry. Not long ago, traditional shopping assignments were abundant, requirements were straight forward and payments were generous.

What a difference a few years make.

Many retail and restaurant operators have experienced measurable declines in revenue, as a rising unemployment rate and general economic anxiety have forced consumers to tightly manage spending habits. As brands have struggled with losses, many have reconsidered the resources allocated to market research and within this environment, mystery shopping.

This era has also ushered in a new corporate mindset regarding the value of market research, with increasing emphasis on custom research projects. Our firm has witnessed a shift toward non-traditional applications of mystery shopping—the type of assignments that demand significant preparation, instore interactions and increasingly complicated cognitive and observational requirements.

Today’s economic environment has forced businesses to assess their own operational performance through increasingly complicated mystery shopping efforts. While businesses continue to recognize the value mystery shopping adds via critical business intelligence, end-user (client) expectations are becoming more sophisticated.

What impact does this have on service providers, and shoppers?

For providers, the most pronounced change has appeared in client requirements regarding shopper selection. Whereas clients once allowed open standards with who could be offered an assignment, we now work within much more tightly defined criteria, including gender, age, household income, lifestyle attributes and the like. Once we have identified a pool of eligible shoppers for a particular program, the selection process is further refined through project-specific testing and interviewing.

Certifications and shopper “rankings” are prevalent among mystery shopping providers as a way to demonstrate the credibility clients expect. The same is true for extensive pre-shop orientation and testing. As a shopper, if you have not already, you will soon come to see more and more detail related to shop guidelines, a broad use of video-enhanced guidelines, as well as webinar training sessions. In order to be offered a wider variety of assignments, mystery shop providers will be looking to broaden their understanding of your lifestyle attributes – such as they type of vehicle you drive, the types of stores and restaurants you frequent, etc. Clients are increasingly interested in mirroring the mystery shopper with their target customer base.

Non-traditional applications are on the rise. These “shops” are often in health care, luxury brands, or in very specific areas of retail. For example, shoppers may be asked to negotiate for a specific price on a luxury item as a way to determine discounting practices among retailers.

What can shoppers do to prepare for non-traditional shops?

• Get certified. The Mystery Shopping Providers Association (MSPA) certifications are highly regarded. As well, many providers have their own certification programs. Certification demonstrates not only competency, but commitment.
• Allow for shop preparation time. Non-traditional shops often require shoppers to role play a specific customer-type. Jane Q. Public isn’t the target of these shops. Shoppers need to understand the shop scenario and, often, practice that scenario ahead of time.
• As part of your shopper tool set, have a digital camera, webcam or video camera. Not only will the camera help in role play prep, some mystery shopping providers are asking for video recorded responses to interview questions as a way to identify the best shoppers for specific non-traditional scenarios.

As the needs of mystery shopping end-user clients continue to evolve, we look forward to working with our shopper community to help each individual be as successful as possible.
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About the Author
Jeff Hall is the CEO and Founder of Second To None, Inc, a leading mystery shopping provider servicing Fortune 1000 brands worldwide.
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About Second To None
Second To None, Inc. is a multi-disciplinary customer experience and customer satisfaction measurement firm specializing in mystery shopping, customer feedback surveys, and compliance audits. We assist Fortune 1000 brands in measuring, understanding and optimizing their brand performance across all points of customer interaction by providing actionable, forward-looking information about the customer experience. For more information, visit www.second-to-none.com or call +1 (734) 302-8400.

Things will get better–they always do–but it will not happen overnight.

As mystery shoppers there are two major things that will affect us.

• First, some clients will go out of business and others will cut back on their mystery shopping programs.
• Second, more people will be looking for ways to make extra money and will turn to mystery shopping.

Those two factors add up to more competition for fewer mystery shopper jobs.

So does that mean you should forget about mystery shopping?

Not at all. Yes, some clients will disappear or reduce the number of shops they do. But there will be increased competition in the retail and service sectors to attract and retain customers, as well as increasing the value of each customer. Mystery shopping is one of the tools that can help clients do those things.

Mystery shopping verifies that the service standards that customers expect are upheld, as well as making sure that sales procedures are followed properly. If employees are not upselling every customer, they are leaving dollars on the table. And that is something that businesses can not afford to do. That means that many companies will maintain or expand their mystery shopping programs, and some companies that have never used mystery shopping will start.

And all of those new mystery shoppers? Most of them will not last long. A large percentage of the people who think they want to be mystery shoppers fail to stick with it when they learn that it involves more than just shopping and offering their opinions.

What we need to do as mystery shoppers is to make sure that we always provide value to the mystery shopping companies and their clients. If you can be relied upon to do your shops correctly and completely, you will be valuable and will continue to receive assignments.

In March, 2007, the Federal Trade Commission shut down MysteryShopLink.com and charged them with deceptive advertising. Mystery Shop Link advertised on television and radio, online and in newspapers, claiming that they had many mystery shopping jobs available and that, in exchange for a $99 fee, consumers would be given enough jobs to make a part-time or full-time income as mystery shoppers.

What consumers got for their $99 was a worthless certification and job postings that they could have received for free from the mystery shopping companies who were actually offering the mystery shopper jobs.

The settlements announced by the FTC yesterday were reached with two separate groups of defendants. The first includes defendants Mystery Shop Link, LLC, Tangent Group, LLC, and their principals, Robin Larry Murphy, Andrew Holman, and Kenneth Johnson. This settlement resolves both the new case filed in 2007 and the contempt action. Under the settlement, the FTC will collect the proceeds of Murphy’s $100,000 bond. The settlement also includes a $17.8 million judgment, which is suspended based on the defendants’ inability to pay. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. This settlement prohibits all the defendants from making misrepresentations in the future. As a repeat offender, Murphy is permanently banned from telemarketing, except for non-deceptive sales to businesses of telecommunications equipment.

The second settlement includes defendants Harp Marketing Services, Inc., and its principals, Aiden Reddin and Marc Gurney. Harp Marketing was the primary outside telemarketing firm that handled consumer calls, and thus sales, for Mystery Shop Link. This settlement requires Harp and its owners to pay $750,000 in redress and prohibits them from making misrepresentations in the future. The Harp settlement also includes a suspended judgment of $6.8 million, the total amount of Mystery Shop Link sales made by Harp’s telemarketers. The full amount of this judgment will be imposed if the defendants are found to have misrepresented their financial condition.

Both settlements prohibit the defendants from collecting payments from Mystery Shop Link customers, and from transferring or benefiting from information about those customers. Both also contain record-keeping and reporting provisions to assist the FTC in monitoring the defendants’ compliance.

Integrated Voice Response (IVR) is used by a lot of businesses, often as an add-on to their mystery shopping and other market research programs. Mystery shoppers have often wondered if IVR will put us out of business, but I do not believe it will. There is, however, something else on the horizon that causes me more concern.

IVR is nothing more than a customer satisfaction survey. It can provide useful information, but it will never be able to provide the details clients have come to expect from their mystery shopping reports.

Questions on the surveys typically measure the customer’s feelings about their visit. They might ask things such as, “Was the person who assisted you pleasant and polite?” Or, “Were you satisfied with the speed of service?”

This points up a major difference between mystery shopping and IVR: IVR surveys collect subjective customer opinions. Mystery shopping collects objective data. For example, while a mystery shopper report may include specific timings (e.g., the elapsed time between entering and being assisted, between ordering and receiving a food or beverage item, or for the check out process), customers participating in IVR might be asked if they their service was “prompt” or “timely.”

Can you imagine a customer trying to complete an IVR survey where they are asked how long it took (down to the second) to get their hamburger? Or the names of six employees who assisted them? It is hard enough for us, and we go in knowing that we will have to provide that information in our reports. The customers were not warned there would be a quiz!

Although some businesses may try to replace mystery shopping with IVR, they will probably find themselves returning to mystery shopping to get the data IVR can not provide.

So if IVR is not a threat to mystery shopping, what might be? Some companies are starting to use a system that makes an audio recording of all customer interactions. The recordings are then uploaded to a computer that scans the recordings, looking for certain words and phrases or other patterns. The reports can then be given to the client to identify training issues, upselling opportunities and more.

Employees wear a recording device around their necks and everything gets recorded. Because customers are also recorded they must be notified, and this is done via a video screen on the device. With the notification, this is legal, but some customers may think of it as an invasion of privacy. We have grown accustomed to our telephone conversations with call centers being recorded, but talking to someone wearing a video screen telling us we are being recorded is not the same.

Because this captures all interactions, not just the random visits by mystery shoppers, there is much more data available. That could, in part, make up for the fact that even these recordings can not provide the kind of on-the-spot reporting a mystery shopper can. I do not seen this technology replacing mystery shopping, but as businesses add more technology to monitor customer interactions, there may be fewer budget dollars allocated to mystery shopping.

What do you think? Will mystery shopping become obsolete?

ABC presented a positive and realistic view of mystery shopping. They showed what shoppers really do (although they focused on the shop, not doing the report later) and said that shoppers can make $100 or so a week. Of course, it is possible to make much more than $100 a week, but it is not likely that new shoppers will make that much.

What did you think of the story? If you missed it, you can see it here.

So what does this mean to mystery shoppers?

This is not the first time Market Force has bought a mystery shopping company. They also own Shop’n Chek and Speedmark (which had previously acquired Genesis Group, Green & Associates and SG Marketing). Mergers and acquisitions by other companies have not always been as large, but they go on. Although mergers and acquisitions are not unique to the mystery shopping industry, it is starting to look like a giant game of PacMan out there, as companies gobble each other up.

Does this mean that one day there will be only one mystery shopping company left standing and we will all work for them? Not likely.

The mega companies will be able to provide service to large client companies. Large clients expect low prices from vendors, and the economies of scale that the super-sized mystery shopping companies can achieve will help them to provide services at a price the clients are willing to pay.

However, there are many businesses that do not have a store on every corner but still want mystery shopping services. In many cases, the large mystery shopping companies are only interested in the big clients. If a client has 20 locations, or 50 or 100, many of the largest mystery shopping companies are not interested in them. That leaves a lot of the market for small and mid-sized companies.

Does it mean that shopper fees will decline if there are fewer companies for which we can work? Maybe. Those of us who have been secret shoppers for a while have seen fees decrease over several years. As mystery shopping companies competed for clients, they have looked for ways to cut expenses and become more efficient. Company profits, as well as shopper pay, have taken a hit in this environment. If the companies can reduce expenses by spreading many costs of doing business (e.g., computer and web systems, office space, support staff, etc.) across a larger client base, that may help them to stay in business and provide enough pay to attract the most qualified shoppers.

We will see more consolidation in the mystery shopping industry, just as in other industries. But there will always be competition. And there will always be smaller companies serving specific niches and clients.

What do you think about all of this? How do you think mergers and acquisitions in the industry will affect secret shoppers and the overall business?

When I announced to MSPA that I could no longer keep up a schedule of more than 20 weekends on the road each year, we set out to find one or two terrific presenters to share the load. After reviewing more than 150 applications (!) and interviewing 15 super-qualified candidates, we decided that there were three that had to be part of the team. All three completed their training at the end of 2006 or beginning of 2007, and have presented a total of 17 workshops so far this year. This picture was taken at the 2007 Shopper Educational Conference in Grapevine, Texas–the first time all four of us had been in the same room together!

Karmi Anna Mattson is from Minneapolis, MN. In addition to being a mystery shopper for more than five years, Karmi is an MBA candidate and experienced trainer. You can see Karmi in action at upcoming Gold Workshops in Salt Lake City, UT and Spokane, WA.

Chelsea Benning is from the Raleigh, NC area. She not only has experience as a mystery shopper, Chelsea has worked for mystery shopping companies and has been a mystery shopping client, so she understands all facets of the industry well. Chelsea’s remaining 2007 workshops will be in Charlotte, NC, Memphis, TN and Newark, NJ.

Gail Witt is a fellow Texan who lives here in Houston. Gail is used to travel, as she traveled constantly in a previous training position. Gail also has more than five years of mystery shopping experience, and her hubby is an experienced mystery shopper. You can meet Gail at the workshops in Kansas City, MO and Milwaukee, WI.

I will see those of you attending the workshops in San Francisco, CA or Albuquerque, NM.

No matter which instructor presents the Gold Workshop you attend, expect a day filled with information, networking, great stories, tips and fun. I hope we will see you at a future workshop.

To see a schedule of all upcoming workshops and register for one near you, go to http://www.MysteryShop.org/shoppers/gold.php

Cathy Stucker is the author of The Mystery Shopper’s Manual.

The first session will be hosted by Kim Dambach, a scheduler with Customer Perspectives.

Topic: Why I Can’t Reveal the Client’s Name–The Ethics of Mystery Shopping

In this session, Kim Dambach, a scheduler with Customer Perspectives, will answer your questions about ethical issues facing shoppers…and why violations of ethical standards are non-negotiable reasons for termination of Independent Contractor relationships.

Date: Wednesday, August 1, 2007

Time: 8:30 pm ET (7:30 pm CT, 6:30 pm MT, 5:30 pm PT)

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The second session will be hosted by Ron Welty, President of Intellishop and a Director of MSPA North America.

Topic: A Look Ahead: The Mystery Shopping Marketplace

MSPA Director Ron Welty, President of IntelliShop, will lead a chat discussion of where the mystery shopping industry appears to be heading in the months and years ahead. Topics will include what MSPA is doing to help shoppers; existing and emerging opportunities for shoppers; pressures on shopper compensation; and competition in the industry. This will be a free-wheeling conversation that will help enlighten shoppers about where the industry is going and how they can position themselves to take the fullest advantage of opportunities.

Date: Tuesday, September 11, 2007

Time: 8:30 pm ET (7:30 pm CT, 6:30 pm MT, 5:30 pm PT)

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Both sessions are open to MSPA Certified Shoppers. If you are not yet certified, you can learn more about Gold and Silver Certification at http://www.MysteryShop.org/shoppers/certification.php

Certified shoppers can get more information on participating in these upcoming sessions, and read transcripts of past chats at http://www.MysteryShop.org/shoppers/resourcecenter/login.php

Market Force Information is a leading global customer experience information company for major retailers, restaurants and consumer packaged goods companies. Its products provide actionable in-store information with reliable leading indicators that drive competitive marketing and investment strategies. Market Force Information is unique in its ability to collect and combine in-store operational and experiential analysis, giving clients a holistic view of the in-store customer experience.

Thus, the consolidation continues in the mystery shopping industry. Over the last few years, Speedmark purchased the Genesis Group, Green & Associates and SG Marketing. Now, Speedmark is the second large mystery shopping company acquired by Market Force.

With the competition in the industry, this trend is likely to continue. Mystery shopping companies continue to be face pricing pressures and the economies of scale obtained by larger companies can help them to stay competitive. As I said in a post in 2005, consolidation is now a fact of life in many industries, including mystery shopping.

So is this good news for mystery shoppers? Only time will tell. My hope is that companies such as Speedmark will continue to be good to their employees and shoppers, and that their culture will not be affected by a change in ownership. I look forward to shopping for Speedmark for a long time to come.

What do you think about the changes going on in the mystery shopping industry? Will they make things better or worse for shoppers in the long run?

Read the press release about Market Force and Speedmark. (PDF)

Cathy Stucker has been a mystery shopper since 1995. She is the author of The Mystery Shopper’s Manual.

According to a recent survey of more than 1,100 mystery shoppers, retail stores have not ramped up their level of customer service during the 2005 Holiday Shopping Season. More than 70 percent of mystery shoppers surveyed said they noticed either no difference or less helpfulness from store employees during the Holiday season in comparison with the rest of the year.

The Mystery Shopping Providers Association (MSPA), the largest professional trade association dedicated to the use of mystery shopping, recently conducted a survey of more than 1,100 mystery shoppers and potential mystery shoppers to receive feedback on shopping experiences during the 2005 Holiday shopping season.

“The Holiday season is a great time for retailers to really show off their sales skills and attentiveness to customers,” said David Rich, MSPA President and President of ICC/Decision Services, a mystery shopping provider that specializes in the retail industry. “The holiday season can really be a “make or break” time for retailers. The customer service a shopper receives goes a long way to determining how often the shopper will return the following year.”

Retailers and other companies use mystery shopping to understand and improve the typical customer experience at each of its locations and throughout its organization. Mystery shopping provides an objective “snapshot” of a location based on factual observations using people who know exactly what to look for before conducting their evaluations.

When it comes to simply welcoming customers to the store, more than 40 percent of mystery shoppers said they were greeted in less than one minute of entering the store during their last shopping experience. However, some stores still fail in this area – nearly a quarter of mystery shoppers were not greeted at all during their most recent shopping trip.

Up-selling is another area where stores could improve. When asked if the sales associate recommended complementary products once the shopper had decided on a purchase, more than 77 percent of mystery shoppers said no.

“Up-selling is a critical revenue-generating behavior that needs to be reinforced with employees, not just during the Holiday season, but throughout the entire year.” said Rich. “Through mystery shopping, employers can locate short-falls in critical elements of their sales routine that ultimately will help increase the bottom line.”

The good news for employers, amidst the hustle and bustle of holiday shoppers: retail employees are managing to keep the appearance of their stores at an above average level. On a scale of 1 to 10, with 10 being the best, more than 40 percent of shoppers rated the stores they visited at an 8 or higher.

Do all of these customer service elements really make a difference for retailers? According to mystery shoppers, the total customer experience proved to be a key element in determining the likelihood of returning to a store. More than 40 percent of mystery shoppers said a positive customer service experience made them more likely to shop at the store again.

About the MSPA

With more than 180 member companies worldwide, the MSPA has a diverse membership, including marketing research and merchandising companies, private investigation firms, training organizations and companies that specialize in providing mystery shopping services. Its goals are to establish professional standards and ethics for the industry, educate providers, clients and shoppers to improve quality of service, improve the image of the industry and promote the membership to other industry associations and prospect clients.