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Difference Between Mystery Shopping and Overt Operational Audits

Mystery shopping and overt operational audits are two different approaches used by businesses to assess and improve their operations, especially in the context of customer service and retail environments.

We discussed Brand Audits in a previous blog, which is another type of overt audit. Brand audits are designed to protect brand image in the context of the physical sales environment. Auditors record location details (which may include digital photographs and embedded video) to confirm that the sales environment mirrors corporate expectations.

Operational Audits are quite different but equally important. Here are some differences and key points to consider.

Nature of Assessment

  • Mystery Shopping: Mystery shopping is a covert and often unannounced evaluation method where individuals, known as mystery shoppers or secret shoppers, visit a business or interact with its services as regular customers without the knowledge of the employees. They assess various aspects of the customer experience, such as service quality, product knowledge, and adherence to company standards.
  • Overt Operational Audits: Overt operational audits are a formal and openly conducted evaluation process. Auditors, who are typically internal or external, assess a business’s operations, policies, and procedures in a planned and systematic manner. This process is usually known to the employees being audited.

Often, retailers use profits as their main method of measuring success, but when you carry out frequent store audits, you have a lot of extra analytics that provide a broader picture of what state your business is in. 

What they both have in common is the desired outcome. Neither is designed to create a “gotcha moment” but rather to evaluate and train where needed to insure the highest of standards and customer service. When done together, it provides businesses with some powerful data.

Key Areas of Focus for Operational Audit

An operational store audit is a comprehensive assessment of a retail store’s performance and adherence to operational standards. The exact components of an operational store audit can vary depending on the specific industry, company policies, and the goals of the audit, but it typically includes the following elements:

  1. Store Appearance and Cleanliness:
    • Visual presentation: Assess the store’s layout, signage, and product displays.
    • Cleanliness: Check the overall tidiness, cleanliness, and organization of the store.
  2. Inventory Management:
    • Stock levels: Verify that inventory is adequately stocked and meets customer demand.
    • Stock accuracy: Ensure that inventory records match the actual stock in the store.
  3. Adherence to company policies: Check if employees are following established company guidelines and procedures.
    • Safety protocols: Ensure that the store complies with safety regulations and standards.
  4. Maintenance and Repairs:
    • Equipment functionality: Assess the condition and functionality of store equipment and fixtures.
    • Repair needs: Identify any repairs or maintenance that need attention.
  5. Security:
    • Loss prevention: Examine security measures in place to prevent theft or fraud.
    • Security camera functionality: Check that surveillance equipment is working properly.
  6. Compliance with Local Regulations:
    • Ensure that the store complies with all local, state, and federal regulations, including zoning and health codes.

The specific details and format of an operational store audit can vary from one organization to another, but it typically involves a combination of observations, interviews, document reviews, and data analysis to provide a comprehensive assessment of the store’s operations. The findings of the audit can help identify areas for improvement and drive strategic decisions to enhance store performance and customer satisfaction.


Gaining the Competitive Edge: Unveiling the Power of Competitive Intelligence and Mystery Shopping

Competitive intelligence and mystery shopping are two related concepts that can provide valuable insights into a company’s competitive landscape and customer experience. Let’s explore each concept in more detail:

Competitive Intelligence

Competitive intelligence (CI) involves gathering and analyzing information about competitors, their products, strategies, and market positioning. The goal is to gain a competitive edge by understanding the market dynamics and making informed decisions. CI encompasses various techniques such as market research, data analysis, and information gathering from public sources, industry reports, competitor websites, and social media.

Key benefits of competitive intelligence include:

a. Identifying market trends and opportunities: CI helps identify emerging trends, customer preferences, and market gaps, allowing companies to adapt and innovate accordingly.

b. Understanding competitor strategies: By monitoring competitors’ activities, pricing, marketing campaigns, and product launches, companies can gain insights into their strengths, weaknesses, and future plans.

c. Benchmarking performance: CI enables companies to compare their performance with that of competitors, identify areas for improvement, and set realistic goals.

d. Mitigating risks: CI helps identify potential threats, such as new market entrants, regulatory changes, or disruptive technologies, allowing companies to take proactive measures.

The Role Mystery Shopping Plays in Competitive Intelligence

Mystery shopping involves hiring individuals or agencies to pose as regular customers and assess the quality of service, compliance with standards, and overall customer experience at a company’s physical or online locations. Mystery shoppers provide detailed reports about their observations, which can help companies evaluate and improve their operations.

Key aspects of mystery shopping include:

a. Evaluation of customer experience: Mystery shoppers assess factors like employee behavior, product knowledge, store cleanliness, waiting times, and overall satisfaction. This feedback helps companies identify gaps in customer service and make improvements.

b. Performance measurement: Mystery shopping provides objective data on key performance indicators (KPIs) such as sales techniques, upselling, cross-selling, adherence to protocols, and compliance with regulations. This information helps companies assess and incentivize employee performance.

c. Competitive benchmarking: Mystery shopping can compare a company’s performance against its competitors. By conducting similar evaluations across multiple companies, businesses can identify relative strengths and weaknesses in the marketplace.

d. Training and development: Feedback from mystery shopping exercises can guide training programs to enhance employee skills, improve service delivery, and align with customer expectations.

Combining Competitive Intelligence and Mystery Shopping: Competitive intelligence and mystery shopping can be complementary techniques. Competitive intelligence provides a broader understanding of the competitive landscape, while mystery shopping offers specific insights into customer experiences. By integrating the findings from both approaches, companies can make more informed decisions, develop effective strategies, and differentiate themselves in the market.


Customer Service VS. Customer Experience

When you are in the business of evaluating customer services levels for your clients, you tend to notice the details. Walk into an ice cream store with your kids or grandkids and you are automatically in tune with the “vibe” of the store. Is there music playing? How easy/hard is it to figure out the menu options? Were you greeted when you walked in the door? How clean was the store? Were you thanked for business? All of these things play either a subconscious or conscious role in your experience.

I remember when an ice cream store chain stopped their mystery shopping service in lieu of social media reviews. Big mistake for a variety of reasons, but the lure of getting “free” customer reviews was enough for them to give it a try. They are not alone. There is actually a term for this. The “Review Economy”has created a dent in customer research. In fact many companies use it in lieu of customer satisfaction surveys.

A year later, I went in to one of the locations as a customer with my family. I witnessed a noticeable difference right away. I was never greeted. I placed my order after waiting in line and there was no upsell or cross sell at the register. Not a huge issue for an ice cream shop, right? When we found a place to sit however, I noticed how the floor beneath the table was very dirty and dusty. The table itself needed to be cleaned better from the previous guest. All things that as a major ice cream brand, it is hard to recover from. I will never go back to the store again after that visit. I will not share my findings in social media. I am the silent, unhappy customer.

Customer Service & Customer Experience: What’s the difference?

Customer service and customer experience are related but distinct concepts. Customer service refers to the support and assistance provided by a company to its customers before, during, and after a purchase. It includes the various ways in which a company interacts with its customers, such as answering questions, providing technical support, handling complaints, and resolving issues.

Customer experience, on the other hand, encompasses the entire customer journey, including all of the interactions and touchpoints a customer has with a company, from initial awareness and consideration, to purchase and post-purchase. It’s about creating a positive and seamless experience for customers across all channels and touchpoints, and ensuring that they feel valued, understood, and appreciated.

Customer Service is Part of the Customer Experience

While customer service is a critical component of the overall customer experience, it’s just one part of it. A company that provides excellent customer service can still fall short in terms of creating a positive and memorable customer experience. To truly excel in customer experience, companies need to focus on creating a customer-centric culture, understanding and anticipating customer needs, and delivering consistent and personalized experiences across all channels and touchpoints.

Forbes recently published a great article titled, “No Help is Better than Bad Help: Focusing on the Customer Experience.” They offered some great practical tips on how to provide a better customer experience. The one tip that stood out to me was to understand your customers.

Understand Your Customers

“Having a thorough understanding of the type of customers who walk through your door also aids in creating a positive customer experience. Know them, and figure out how to tailor their experiences to their needs. Being in tune with the customer goes a long way in creating an experience worth remembering.”

This for me sums up in part why a business still needs mystery shopping and customer satisfaction surveys. You can’t get this type of understanding from a social media review unless you can unmask the author behind the post. I am in favor of online reviews, but you need all of it to really understand how to develop, train and execute a good customer experience process.