Definition
Mystery Shopping is a research method aimed at gathering actual information concerning the service quality level in different service companies. The service evaluation is carried out with the help of trained people, who visit a retail point as usual customers. After the service point has been visited – a bank branch, a retail shop, a restaurant, a petrol station, a supermarket or a boutique – a Mystery Shopper fills in a special structured form with information about service quality, emphasizing the presence of certain service quality standards. 

The information gained is used for measuring the levels of service quality standards, revealing weaknesses in service in order to improve them in future. Mystery Shopping is used in motivation systems for front-line personnel, connecting personnel compensation with the level of performing certain service standards, measured with the help of Mystery Shopping.

Mystery Shopping is considered to be an instrument for improving the quality of service.

In sociology, Mystery Shopping is classified as a method of participant observer.

Mystery Shopping is used in the form of long-term or constant service control and personnel motivation programs in service companies – bank branches, retail chains, restaurants, car dealerships, hotels, petrol stations, etc. Program modifications include Audio Mystery Shopping and Video Mystery Shopping, i.e. secret audio and video recording of the service process.

The criteria of success for a Mystery Shopping program are determination in reporting, objectiveness of the information, the correlation of the Mystery Shopper’s background with the background of the company’s current customers, and also the system in which the Mystery Shopping information is used in the everyday activity of the researched company (control, motivation, diagnosis, training).

Practice of usage
What are the reasons for Mystery Shopping’s being highly in demand? Firstly, it is the possibility to create the motivation system on the Mystery Shopping background, which will stimulate the personnel to service customers better – due to the connection between service quality and the employees’ compensation; secondly, it makes it possible to reveal the weaknesses in service in order to eliminate them through, for example, additional personnel training. The first function – motivation – is especially important. A regular Mystery Shopping program, which influences the compensation scheme of front-line personnel, can sometimes be miraculously helpful for the personnel’s motivation. As a result, the Mystery Shopping program helps a company to achieve excellent service quality level and to be rather competitive.

Main methods of Mystery Shoppers information use:

• Best practice encouragement in service: rewarding staff on the basis of different corporate nominations. Here, different stimuli can be used: material (bonuses) and non-material (best seller Certificate).
• Use of wage system control results: it controls mid-level executives, who contact clients directly, and also line managers, e.g. bank subsidiaries managers and shop directors. Many companies can go further and use Mystery Shopping to conduct attestation of top-managers, e.g. the retail system managers. Typically, Mystery Shopping determines 10-20% of the staff’s salary.
• Diagnostic of staff work disadvantage – To improve it, the so-called “focused” training should be used. Mystery Shopping diagnostics reports very often are used by the company’s training center, which creates on these bases training programs for line management.
• Strategic analysis and the definition of internal investments direction. For example, to improve the design of the chain’s sales area or to increase the staff. This is one of the methods utilized when the company’s management makes the determination as to whether the dynamic improves service to achieve the company’s goal, or company’s strategy in service differentiation is unfulfilled. 
• Competitive study – a direction that is used very rarely. Unlike the other 3 methods, comparative characteristics between the company and its competitors are short-term research, and usually are conducted by the marketing department. 

Service improvement without quality control is impossible. The necessity to control service is comparable to the necessity of controlling and uncovering damaged goods in production – the only difference here is that service is non-material, heterogeneous, influenced by the human factor, and short-lived – a warehouse cannot be overstocked with it – and, finally, service “production” cannot be considered apart from its consumption. As a result, it’s more difficult to measure service quality than product quality. But it has to be done, because anything that cannot be measured – cannot be improved. 

Role in service improvement
The Mystery Shopping program itself is not a panacea and doesn’t provide quality improvement. Service control is just a part of the complex program of service management in a company. It is a vitally important detail, but not the only one. The issues of the staff’s adaptation and training, motivation and stimulation, and the creation of a service-oriented environment and popularization of service among the staff should be dealt with inside the company. Here, corporate professional standards should be put into practice, and, finally, a unified coordination center should be set up, which will be responsible for managing the service quality within the company. None of these components could be excluded, or operated separately (see How to Improve Service).

Criteria of effectiveness
A successful Mystery Shopping program helps to improve and support high quality customer service. What can distinguish between successful and unsuccessful program? Some requirements that have become simplista (need original text) today, should be executed. In initiating a Mystery Shopping project, please be sure it meets the following criteria:

• Connection with motivation system: Mystery Shopping evaluation should meet the material interest of every employee and their management. Otherwise, nobody would pay attention to this program. The results of changes in service will be integrated in the wage system for employees, who are responsible for high quality service.
• Positive motivation: modifying the wage system and creating Mystery Shopping image, should be accented on the revenue and the advantage, which each and every employee gets from this project. It is necessary to highlight the positive side of the program – not as a way to find the guilty and to punish them, but as a way to put perfect work on display and to encourage it.
• Optimal sampling: excessive number of grades means extra cost for customer; the lack of sampling leads to wrong analytical reports (e.g. about shop service quality ratings or the dynamic service growth). Number of grades orders in number of the service staff.
• Feedback efficiency: the faster Mystery Shoppers evaluations are open for use, the better the effect you can expect from the program. Mystery Shopping Agencies on the West compete among each other exactly on the base of report speed. For Mystery Shopping standard 5 years ago, there were 48 hours between the fact of evaluation and its delivery to the client; nowadays, foreign providers usually declare within 24 and sometimes even 12 hours.
• Correspondence of Mystery Shoppers and real company clients profiles: if the evaluation is done by people who are not associated with the company’s service (ex. first year students, who work in an expensive auto salon), then the program won’t reflect the real service and can’t be representative enough.
• Mystery Shoppers’ rotation: people who visit enterprises, as customers should be new every time; otherwise, the staff may easily “recognize” them. For instance, 3 months rotation (the same Mystery Shopper visits the same shop a maximum of 1 time in 3 months) is the standard for a retail chain and a half-year rotation is the standard for the banking system.
• System and complexity: there is no use in a Mystery Shopping program if the company doesn’t have training programs for its staff, the salary if fixed and service standards are described in only 3 sentences. Mystery Shopping is just one of the instruments that helps to improve the service and should be implemented alone with it as a part of a company service’s management system.

Among other criteria of Mystery Shopping success, there are the technique of hiding the Mystery Shoppers identity (not revealing oneself), objective evaluation, and proper use of the instruments (audio tape recording, photographs, bill).

Staff’s resistance
The problem of Mystery Shopping that stands apart is the Staff’s resistance to being evaluated – mass criticism and staff’s distrust of the quality of the scores giving by Mystery Shoppers. The step is presented in cases of direct connections of the staff’s wage found to Mystery Shopping. The major critics are giving to the values with the least marks. The chain’s staff uses aversion and criticism as an instrument to increase its own indexes; they insist on cancellation the evaluation of a low level of service. The staff’s disagreement usually plays the primary role in managements’ decision to reject Mystery Shopping service; management is not able to prevent sabotage and to establish harmony and a clear system of using the service evaluation results.

One of Marketing Lab™ advantages is the successful experience in consulting service companies on how to prevent the staff’s negative attitude toward the Mystery Shopping program and how to integrate the Mystery Shopping into the HR system. 

Stages of implementation

Preparation and implementation of Mystery Shopping program in Service Company includes several stages, which do not depend on the companies particularities:

• Audit of service standards: service evaluation criteria in the Mystery Shopping program are usually developed on the basis of those service standards, which work in company’s control. The standard that is accepted inside the company and that is followed by the staff itself should be evaluated. In case there are no standards in the company, or they are not particular enough, corporate service standards should be developed and implemented before the Mystery Shopping program is implemented.
• Program parameters determination: what stores or subsidiaries will be included in the evaluation process, how often every branch should be visited, should the Mystery Shopper buy/sign the contract during the evaluation process, should hidden audio/video/photo recorders be used and etc.
• Tools development: evaluation criteria, assessment sheets, Mystery Shoppers scenario, instructions on how to use hiding Dictaphone, route sheets, etc.
• WEB-platform design: all data delivery goes through the Internet, with the help of a special Mystery Shopping e-program (eg. in our company, we have the ServiceLook Online 1.0 program, which distributes all information about the service on this site www.mystery-shopping.com.ua). The main stage is to create a users hierarchy on the client’s part – any employee of the Customer have rights to access different information volume; for instance, a store director can see less information than the companies’ HR-director. 
• Profile’s determination/Mystery Shoppers selection: depending on the target group profile of the control company, there is formation of Mystery Shoppers profile, according to which the selection will be made. It is so called matching principle or “reduction to a common denominator” – all characteristics of people who do the evaluation should be close as possible the real customers of the Company. Usually, the selection is made automatically from the Mystery Shoppers database that the Agency has according to the required criteria.
• Procedure determination and buyer’s use of information: it is important that the Buyer have a clear system of how to use the control results, which should be formalized as a calendar plan. The main ways of using Mystery Shopping in a service company’s HR-management have been presented above.
• Mystery Shoppers training: it is necessary to train the people who will perform the evaluation. There is specific project preparation, where the Mystery Shopper describes the particularities of the project and the qualified training programs where they get general skills of service evaluation. It’s also necessary to take an exam on knowledge of project specifics before the buyer will start the work on his or her.
• Front-line program presentation for staff: furthermore there is a Mystery Shopping program presentation giving to the companies’ staff. Frankly, there is a need to create the right image of Mystery Shopping and to relieve the staff’s stress that appears as a consequence of the change in current procedure.
• Start monitoring – everyday use of information from Mystery Shoppers during the company’s operation. The ideal model is Mystery Shopping as a permanent process that follows and is used in the every day work of the company.
• Regular report, meeting with the Mystery Shopping provider, motivation activities, program changes: the program should make a report of the results of the program from time to time; it should set new service goals, inform about the results, goals and staff bonuses, and make changes in the program.

Main condition
A fundamental condition of Mystery Shopping program success is the company's top-management consciousness of the necessity to improve the service and understanding that service improvement without quality control is impossible. If good quality service is important for company’s “vision”, then sooner or later, the service as a corporate value will be accepted as a necessity by the company staff as well.

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