Selected Article
Title Objective as You Wanna Be
Date Published 10/23/2003
Author Wendy Cuthbert
Publication QSR Magazine

Q: When does a foodcourt quick-serve boast its own parking lot?

A: When an unreliable mystery shopper rates it.

This unintentional riddle was discovered last year in a Del Taco mystery shop report. According to Ron Petty, president of the Lake Forest, California–based Mexican chain, the shopper deducted points for a messy parking lot in one of the company’s new units. There was only one problem with this rating—the unit in question was inside a mall and didn’t actually have parking. “We called them and told them that whoever did that shop had to get off our business,”says Petty.

While these mystery shop blunders don’t happen often—“We keep a tight rein on things,” says Petty—they do occur. And that’s why Del Taco doesn’t rely solely on mystery shops for its research needs. In fact, most of its performance measures come by way of focus groups, internal audits, and input from its 1-800 number. A new store opening prompts a 13-month stint of mystery shops, after which the service is only brought out for isolated issues. Petty sees value in mystery shopping. It’s just not something he subscribes to whole-hog.

“You’re being shopped by human beings,” he says, meaning that no human endeavor is error-free. “And I can basically tell by some of the shops we get that they’ve sat in their living room to do it.”

Stories abound of shady evaluators who know little about operations issues and couldn’t care less. Many shopper providers are doing their best to fight this widely held belief. A new certification system by the Mystery Shopping Providers Association (mspa), for example, is clearly an effort to weed out unreliable or downright dishonest shoppers and provide some credibility in an industry that has seen its fair share of misleading reporting (see sidebar).

But, with only 150 members out of anywhere from 600 to 1,000 providers across the U.S.—with a presumed broad range in accountability—the association needs to work hard to keep mystery shopping in the quick-serve industry’s good books. The task becomes even more arduous when pitted against pressures from companies that present interactive voice response (ivr) research as a more modern and cost-efficient alternative to mystery shopping.

IVR is indeed a less expensive proposal—a company can get feedback from, say, 50 customers for the cost of one mystery shop. But this apples-and-oranges comparison, which has surfaced in ads and company promotional material from IVR providers, has mystery shop providers crying foul.

“I love IVR but IVR doesn’t love us,” says Mike Green, MSPA president and vice president of Speedmark Information Services in The Woodlands, Texas. He says that IVR is indeed a legitimate research tool—in fact, Speedmark inked a deal last year to offer it to its own clients—but it emphatically does not offer the same measurements as mystery shopping. With the lure of an incentive, such as a free beverage or the chance to win an entire meal, IVR invites customers to provide their opinions through a telephone keypad. That makes it a good customer satisfaction tool—but nothing more, says Green. “IVR is a glorified comment card.”

Mystery shopping, on the other hand, makes every effort to avoid opinions altogether and instead offers strict evaluations of standard operating procedures, according to each company’s needs.

In other words, where IVR will suggest what customers think of a restaurant, mystery shopping’s task is to ensure that everything jives with pre-set company standards. “IVR has nothing to do with whether the food got out in three minutes or whether the person was wearing a name tag,” explains Green. The attention to detail necessary for a mystery shop takes it way beyond what the typical customer is qualified to comment on. In fact, mystery shoppers are armed with an arsenal of expectations to which most diners pay little, if any, attention.

That’s why companies often turn to mystery shopping to evaluate the training needs of personnel. Checking up on suggestive selling—the pinnacle of quick-serve profits—bodes well for mystery shopping, as does reviewing the efficacy of training for new program rollouts. If designed well, a mystery shop can uncover training gaps that can cost companies millions of dollars in lost revenue. “Our true goal is to get employees to do what they are trained to do,” says Green.

Employee motivation is very much a priority for James Coney Island of Houston, Texas. The hot dog chain has been engaged in mystery shopping research for the past seven years, conducting monthly shops in each of its 23 units, and drive-thru shops (it has 19 drive-thrus) every other month. Paul Dondlinger, director of training and human resources, is enthusiastic about the impact of mystery shopping. “Our whole culture has changed,” he says. Mystery shop scores are directly tied to the company’s performance-based manager bonus plans, says Dondlinger, and the chain encourages managers to trickle these incentives down to all employees. For example, managers can offer small hourly pay raises for outstanding scores, while the parent company enters top employees into draws for larger cash prizes.

Having mystery shops also presents the opportunity to raise the bar on employee performance, he says. By providing employees with samples of what the mystery shop will be examining, the chain raises awareness in key areas. Its focus on upselling, for example, translated into significant sales increases, he says. James Coney Island has also used the program to address specific concerns. For example, to offset liability issues resulting from the hazards of slippery condiments, it decided to focus on floor cleanliness and deducted points for any unattended spills.

It’s an expensive tool, he admits, but it works. “It’s consistently raised the bar.”

Dondlinger likes the idea of IVR as well, but if it comes down to choosing one over the other, he suspects that the chain is better served with mystery shopping. “I’m leery of making large-scale changes,” he says. “I want to be able to measure long-term progress.”

Not every company believes that mystery shopping provides the pertinent historical information necessary to improve the bottom line. Donatos Pizza had engaged in mystery shopping for many years and was happy with the results, according to Jane Abell, chief people officer for the Columbus, Ohio–based chain. But it dropped its program in favor of IVR seven years ago because it wanted a more consistent and actionable tool for its managers. “We wanted to give (managers) a sense of urgency so that they could respond to any alerts or issues,” she says. The IVR daily reports mean that managers can call dissatisfied customers and address their concerns within 24 hours—a particularly powerful tool to ward off the dreaded loss of a repeat customer. The report scores also account for part of the management bonus program, so managers are keen to improve scores and check their reports daily, weekly, and monthly, she says. “They take ownership of the program.”

There’s also little doubt that sales are directly tied to IVR feedback scores. For every one per cent jump in IVR ratings, Donatos sales increase by one-fifth of a percent, according to Abell.

She is not ready to dismiss future mystery shopping out-of-hand, however. Internal audits operate like a mystery shop, at least initially, and they are incredibly useful tools, she says. But budgets don’t allow companies to embrace every tool. In an ideal world, she admits, Donatos would conduct both types of methodologies.

“A business that can afford to invest in both services really should because they’ll get a much more well-rounded picture,” says Ron Welty, president of IntelliShop, adding that the two tools offer very distinct findings, one fact-based and the other dealing with customer feelings. The Perrysburg, Ohio–based mystery shopping company started offering IVR services two years ago—but Welty says that it hasn’t met with a lot of success. IntelliShop’s mainly mid-sized chains tend to budget for one research discipline or the other—but rarely both. To further complicate matters, separate divisions of the same company often handle the concerns addressed by each tool. “In some cases, it’s a completely different department and we’ve not been able to crack it, so to speak,” he says.

Both mystery shopping and IVR share one thing in common, however—and that’s their impact on the bottom line. Proponents of each tool say they are clear barometers of a restaurant’s success.

That’s exactly how RPM Pizza in Gulfport, Mississippi, which is the largest Domino’s Pizza franchisee, uses IVR. Tracking customer feedback at its 160 units gives a clear indication just how well each is going to do on its internal corporate audit, according to Richard Mueller, RPM chief financial officer. “The two correlate very strongly,” he says. “If you start to see a Qualistics (the IVR company RPM uses) score that’s going bad, you know with pretty high confidence that the store is going to score lower on their internal audit.”

Keeping an eye on Qualistics information—and calling dissatisfied customers—gives managers the chance to improve conditions before the audit takes place, he says. In fact, RPM has someone who goes through the daily IVRs and alerts managers to possible problems before they even reach head office. Keeping tabs on IVR and audit scores pays off in the long run, he adds. “We know if we can get those scores up, in three to six months, the sales will follow.”

Tracking customer opinion is critical, says John Potenza, founder of Qualistics in San Diego, California. “The only way you can understand what to improve is to measure it.” Further, he says that with measurement, it’s clearly a case of “the more, the merrier.” The more reliable feedback a restaurant receives from guests, the better chance a chain has at improving its operations and securing repeat visits—the key of business growth for any quick-serve chain. IVR is simply an efficient method to collect customer opinions, with safeguards built in that a tool like comment cards can’t provide, he says.

While Potenza admits that the two research tools are very different beasts, he says that the reason some IVR companies have compared their cost on a per-survey basis to mystery shopping is because some mystery shop providers have stepped out of their boundaries. “I think [mystery shopping] has been overused or misused,” he says, adding that it should only be used for objective criteria: Are the displays set up correctly? Are the washrooms clean? Is the food packaged properly? When it comes to rating opinions on actual transactions—the very experiences that will either encourage or prevent customers from returning—IVR is the stronger approach, he contends.

He’s also a big believer that the two tools are complementary, as is evidenced by the number of mystery shop providers that are now entering the IVR fray. “If anything, our system will empower mystery shopper information to be used the way it was intended,” he says.

Mystery Shopping the Mystery Shoppers

That’s exactly what the wife of a gas-and-convenience chain owner did several years ago when she secretly signed up to become a mystery shopper with the very company used by her husband’s concern. Imagine her shock when she was advised by a fellow shopper to limit her in-store visits to only a few of the required sites before sitting down to write her reports. Apparently, fabricating shops was a more efficient use of her time.

Stories such as this one, provided by Darren Magot of Pacific Research Group, have circulated for years and raised eyebrows and ire in the foodservice industry. “There’s no question that there have been chains burned by bad mystery shoppers in the past,” says Ron Welty, president of IntelliShop. “But that’s yesterday’s news.”

New entrants into the industry—the number of providers has tripled from about 300 five years ago, according to the industry association—have significantly raised the bar in terms of accountability, he says.

To further this credibility, the Mystery Shopper Providers Association (mspa) has developed a certification program for its mystery shoppers. Only a few months old, the program is still being fine-tuned daily, according to Mike Green, MSPA president.

It works like this: Shoppers are encouraged to take the online silver certification program, which details the basics of mystery shopping, provides information on the industry, and confirms the ethical stipulations of being a mystery shopper. A test, which is being upgraded regularly to ensure that all aspects of mystery shopping are understood, is also included. The cost is $15.

Once they pass the silver level, shoppers are eligible to attend a gold-level workshop, held at various locations across the U.S. The seven-hour workshops promise to take the training a bit further, offering a professional lecture and visits by chain owner/operators.

“We want to break down the perception that the shoppers don’t know what they’re doing,” says IntelliShop’s Welty. “The program also helps our members identify people who are more inclined to be better shoppers,” he adds. So far, the program boasts a little over 3,000 silver-certified shoppers, with 400 upgraded to gold.

Pacific Research Group (prg) of Costa Mesa, California, meanwhile, is offering to take the pressure off shoppers altogether by having mystery shopping reports validated with the use of digital photography. Using tiny digital cameras that can be held discreetly in hand with a set of car keys, for example, shoppers are asked to take as many photos as possible while investigating the restaurant. When inputting the restaurant information afterwards into their laptops, shoppers can download pertinent visuals.

According to Darren Magot, PRG vice president, the company began exploring a more photographic report when it asked its shoppers take outside photos from a distance to prove that they were indeed at the right site. While it may sound like something out of a Monty Python skit, there have been cases where confused mystery shoppers have reported on the wrong site, skewing results and bonus plans. Photos of a site can solve this confusion.

Once digital technology started improving, the company began asking shoppers to carry tiny hidden cameras to take clandestine shots inside the restaurant as well, in order to support the data.

“We typically submit anywhere from 16–24 pictures for each location,” says Magot. The photos can take the report so much further because they can reveal issues that aren’t adequately examined during the mystery shop. For example, a photo of a burger might indicate a number of things that written mystery reports might miss: too-tight wrapping, for example, or the wrong toppings or bun.

The company worked with McDonalds last year and, these days, is under contract with Krispy Kreme. The doughnut giant has a unique arrangement; after a mystery shop is conducted, its mystery shoppers are to throw away discretion and re-enter the stores to take even more pictures. By doing this, the company has created an internal picture library, according to Magot. It sends copies to appropriate departments, depending on the photo contents. For example, copies of signage shots would get sent to the marketing department.

Down the road, Magot expects the company will adopt video technology as it too improves and comes down in price. “I see that as an opportunity for the future.”