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Active Mystery Shopper - Balance Scorecard
Balance Scorecard and Market Research Overview
Balance Scorecard tends to be the domain of very large organizations. There’s usually several perspectives that organizations examine when compiling a Balanced Scorecard e.g.: Financial, Customer, Internal and Educational/Learning. On looking at the customer or the external perspective of this, usual metrics to facilitate better customer service and customer retention come in the form of taking market research type measures in the areas of customer satisfaction, customer experience, customer understanding and those which involve talking to customers. Other available internal customer information can be found in company databases containing details about customers e.g. a database with details of customer web-transactions or internal phone answering metrics obtained from phone system.
Mystery Shopping and Market Research
As we know Mystery Shopping tends to compliment some of these market research initiatives and is not meant to replace any other specific market research exercise (e.g. Customer Satisfaction). Mystery Shopping is a tool that can provide on-going customer service evaluation data which itself can be used to check adherence to procedures, tailor training, identify areas for improvement or be used to provide a measure of some facet of service. Using customer satisfaction to provide base lines by which initiatives identified by mystery shopping can then implemented and measured can be very effective.
The ‘third-partiness’ of Mystery Shopping means that respondent opinions, feelings and reactions are not being measured (and represented statistically) but rather a skilled shopper’s interpretational and observational skills are being employed to provide the measure. The performance measurement for the Balanced Scorecard in this case is based on the shopper and it is on this that initiatives for further improvements will be based.
Mystery Shopping and Balanced Scorecard
The inclusion of a mystery shopping score is not unusual in contributing to the “Customer” side of a Balanced Score Card. In fact, it is known that local governments, retail outlets (e.g. shops/garages) and restaurant chains use mystery shopping to contribute to the measures used on a Balanced Scorecard. The weight it receives depends on the organizations view of it and the level of usefulness, the importance they attach to the mystery shopping programme and it’s ability to deliver on the stated objectives of it. This is usually something members of the organization see the value of i.e. if the mystery shop highlights tangible areas that can be addressed then it is obviously useful.
Quite often the need to get senior management sponsorship on research based projects can be difficult but if the Mystery Shopping programme is experiencing some on-going commitment from management then its usefulness should not be underestimated. The level of agreement for inclusion of items and their associated weight on the scorecard really comes from the stakeholders’ willingness to accept this as an appropriate way to be measured. It must be endorsed at senior level and seen as something that is worth participating in. This is particularly relevant when setting the desired targets and when substantive rewards are on offer when those targets are met.
How many Mystery Shops?
Factors such as number of outlets, regions or business units and frequency of reporting can be be the deciding factors in establishing the appropriate number of Mystery Shops. Budgetary constraints can also limit the amount of mystery shops. Identifying the specific objectives of the Mystery Shopping exercise and where it exactly features in the Balanced Scorecard should also allow a good decision to be made. If facilities etc., are the main focus of the mystery shop say for a bank e.g. presence of a tidy branch, ATM or specific product advertising then periodic observational studies would suffice. If however there's more of a focus on the human interaction side of things then more shops would probably be required to give a more even picture.
There would obviously be some concern if say each specific branch needed to be measured but the measure and its contribution to the important Balanced Scorecard was attributable to just a few shops per annum. A bad experience received by a mystery shopper on a given occasion could give a skewed picture of the true overall state of affairs. To counteract this, increasing the frequency of mystery shopping at the branch level would provide a more averaged score. Similarly maintaining consistency in how mystery shoppers actually measure can be achieved by providing clear guidelines on interpretation of certain service facets e.g. Excellent 10-points, Good 8-points, 5-7 etc.,
Information/Frequency/Reporting
Depending on the frequency of mystery shopping we can report monthly at outlet, regional and national level or in-line with the overall Balanced Scorecard reporting.
With Mystery Shopping, bear in mind that its not customers whose opinions we’re trying to measure but rather a skilled mystery shoppers interpretations and observations of the branches.
Some examples of Organizations who have used Mystery Shopping scores to contribute to a Balanced Scorecard.
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Mobil USM & R (purchases made each month in each forecourt) |
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US Local Government Georgia (enquiries in person and by telephone – reported monthly) |
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Diageo - Burker King (purchases made at each outlet monthly) |
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