13 Ways to Prove Return on Investment for Mystery Shopping
1. Measure Customer Lifetime Value
Customer Lifetime Value is simply the total monetary value of that unique customer’s lifetime business to your brand. Customer Lifetime Value can be broken down into monetary terms. If the customer’s average purchase amount is $50 per visit and the top 20% of your customer base visits twice per month, that is 24 x $50 = $1200. If that customer visits over a 10-year period, the CLV of that customer is $12,000.
2. Interpret Customer Lifetime Value as Customer Loyalty
Your customer lifetime value is determined by the level of loyalty from a customer. If a customer frequently returns to your establishment or product, it can be assumed that they have had a positive experience with your business and product. For example, if a customer finds a fly in their soup, the customer is most likely not going to take another bite. The soup has lost the trust of that consumer. The same can be said for returning customers. If a customer experiences a negative emotion associated with your business or product, they are not going to return until trust is earned again with quality customer service
3. Focus on Quality Customer Service
Quality customer service and loyalty really pay off. Blake Morgan Senior Contributor to Forbes reports staggering numbers that clearly show customer service does pay off for companies that invest in it, citing, “Customer-centric companies are 60% more profitable than companies that don’t focus on customers. Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience. 84% of companies that work to improve their customer experience report an increase in their revenue.”
4. Don’t Skimp on Customer Service Budgets
It’s vital to be on the offensive with customer experience. Morgan continues, “…unhappy customers cost more to serve because they require more time and resources to build goodwill. Instead of spending money to recover from a bad experience, proactively spending money to create positive experiences pays off incredibly.” Clear communication with your customer and high-quality service is the key to building these positive relationships. Directing funds towards establishing these avenues is crucial.
5. Monitor Social Media for Great Reviews
There is evidence that taking proactive measures like mystery shops can even help with clients’ social media pages. The most commonplace for customer-business communication. Lisa Kacena-Grell, National Sales Executive at A Closer Look discussed that “…there is a direct correlation between their [clients’] mystery shop scores and social media. As they see their scores improve, so do their online reviews. The more positive things said on social media—obviously the better—the more likely people are to return to their fav locations and the more likely they’ll recommend the location to their friends/family.” Positive reviews and recommendations are always the goals for any business, because they reflect not only successful procedures within the business, but also reflect customer loyalty and their customers’ likelihood to recommend the business.
6. Hire Mystery Shoppers
Mystery Shopping is your answer to knowing your customer service practices are building customer loyalty. If you do not have or are unsure of loyal or frequently returning customers, it may be time to assess your business practices to optimize every interaction with your customers. With Mystery Shopping, your business will be assessed through confidential shops to gain more vital information to improve your business services and customer loyalty.
7. Identify Opportunities From Your Mystery Shop Reports
Mystery Shopping helps businesses identify problems through its proprietary reporting platform— helping improve upselling techniques and training procedures. Building off the last point, the restaurant now has discreet and unbiased information from the mystery shop. But the partnership does not end there. A Closer Look helps the business to identify problems through its proprietary reporting platform. The restaurant can reward their employees for proper upselling techniques and make necessary adjustments to their training procedures to ensure proper training on Health and Hygiene.
8. Look For Ways To Improve Company Culture
In addition to the discreet evaluation and competitor assessments, clients may opt to receive valuable feedback from current and prospective customers after their virtual visit or transaction. Using an economical texting-platform, prospects and customers will be prompted to submit a quick and accessible satisfaction survey about the interaction with the facility and virtual sales process.
9. Identify Customer Spending Behaviors and Upsell
Karen O’Leary Director of Client Relations with A Closer Look describes Customer Spending Behaviors as, “ensuring there is a dollar value attached to certain consumer behaviors.” A good example of this is upselling the dessert course at a restaurant. During your visit, your server might use suggestive selling to make certain recommendations during your meal. The server might recommend the “house-made cheesecake with decadent ganache” before presenting your check. This suggestion will improve your customer experience, because who doesn’t love a sweet treat after their meal? If done with belief in the quality of the product and with authenticity, it will also incrementally increase revenue to the restaurant. The result is the customer feels taken care of with personalized service and revenue is increased. Upselling and suggestive selling are imperative to businesses. The more it occurs, the more opportunity to increase revenue.
Lisa Kacena-Grell, National Sales Executive at A Closer Look, noted this scenario with one of her clients stating that he was, “…amazed by the results by what he calls his ‘profit questions.’ These are questions that staff would ask consistently like ‘Would you like to add our house side salad?’ or, ‘Would you like to add the pecan pie?’ He has seen a significant increase in guests saying ‘yes.’” When this method is put into action, Kacena-Grell calculated that, “Of the 100 guests a day, when 10 people add an additional item to their check, they’ll see an increase of $60 per day. Take that number times 30 days and then by 12 months, they’ll see an increased profit of over $21,000. At just this one location! This company has almost 200 locations…” A huge win for the company just through mystery shopping their business.
10. Think Outside The Box
11. Compare Yourself to Competitors
One aspect of A Closer Look’s Mystery Shopping Solution is its invaluable ability to compare business operations with other competitors. With this solution, businesses can collect competitive pricing information. As well as, learn about their competitors’ quality and service differentiators. This helps your business stand out amongst competitors and drive new customers to your business and product.
12. Turn Mystery Shoppers Into Loyal Customers
There is evidence that Mystery Shopping pays for itself over time. According to A Closer Looks’ polling of over 2,000 independent shoppers, “84% of evaluators said they returned to the businesses they learned about through shopping for A Closer Look. Over half of these evaluators visit at least 2-3 additional times annually, at their own expense, and spend upwards of $50+ per visit.” This is a great return, and a quality way to use grassroots marketing to promote your business.
13. Encourage referrals to Friends and Family
Mystery shopping not only helps businesses improve their customer experience and increase customer loyalty, but it can also lead to valuable word-of-mouth marketing. When mystery shoppers have a positive experience with a brand during their evaluation, they are more likely to share their experience with friends and family. This organic form of referral marketing can be incredibly powerful, as people tend to trust recommendations from those they know and respect. By providing an exceptional experience to mystery shoppers, businesses can tap into this valuable referral network, attracting new customers who are more likely to become loyal patrons themselves. The ripple effect of positive word-of-mouth can significantly contribute to the return on investment of mystery shopping, as it helps businesses expand their customer base and increase their revenue through genuine, trusted recommendations.
The return on investment of Mystery Shopping can be calculated. It helps you assess your business, become aware of your customers’ experiences, optimize training, build loyalty, and increase profitability. Through your Customer Lifetime Value and Customers’ Spending Behaviors, a business can decide whether Mystery Shopping is right for them. But don’t take our word for it, try it for yourself. Request a free mystery shop for your business.