When considering Mystery Shopping for your business, you may ask yourself: How is this benefitting my bottom line? How will I know my customers are noticing a difference? Fortunately, the Return on Investment for Mystery Shopping can be identified through two functions of your business. These functions are the Customer Lifetime Value and your Customers’ Spending Behaviors.
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.
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.
But does 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.”
Building off this notion, 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.
In fact, there is evidence that this kind of proactive measure 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.
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.
For example, a restaurant has noticed a lack of returning customers. They implement a mystery shop from one of A Closer Look’s qualified independent mystery shoppers. Through the customer perspective shop, it is discovered that the staff has a great handle on upselling the product. However, the restaurant needs more training on the latest Health and Hygiene sanitation procedures. Bingo.
Now the restaurant 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.
The Mystery Shops help not only with identifying training needs and upselling. It can help with customer experience especially when there is an issue. It can also identify company culture for a more productive and positive environment for employees. In turn, when customers see businesses are making adjustments and following proper protocol, it builds loyalty and trust with that customer. Resulting in more returns in the future and a bigger bottom line for your business.
This example brings us to our second function, Customer Spending Behaviors. Karen O’Leary Director of Client Relations with A Closer Look describes this 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.
Mystery Shopping is not limited to on-site brick and mortar retailers and restaurants. Mystery Shopping can also be used for Virtual Visits for Senior Living Facilities, Apartment Complexes, Self-Storage, and Hotels by assessing the prospective customer’s ability to be able to seek and gather information on the business without having to commit to an onsite visit. The smoother the virtual visit, the more trust a customer will feel with that business.
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.
Finally, 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.
Building on this finding, a “staggering 88% of evaluators also refer their friends and family to these same businesses they learned about through mystery shopping. One evaluator reported, ‘For each mystery shop where I have a great experience, I usually return at least once within 30 days and recommend at least 3-4 times to friends or family.’” Our report also finds that “79% of Mystery Shoppers try a business for the first time because they evaluated it.” This is a win-win for your business. While collecting unbiased information to benefit the operations of your business, you will also be building a loyal clientele excited about sharing your successes.
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 here.