Mystery Shopping The Competition; Acting Before it’s Too Late
It’s the proverbial “Resting on one’s Laurel’s” scenario and every business owner’s worst nightmare. Business is great, you have the ideal location, a growing customer base and significant social media buzz. Business has not been better, so you can finally sit back and enjoy the fruits of your labor. And then just as you are about to put your feet up, a competitor moves in and slowly but surely begins to syphon off your (supposedly) loyal customers. You tell yourself, “It’s not a big deal. My store/product/service can’t be beat by some new upstart. Our customers are loyal, they won’t leave us.”
Or perhaps you are a manufacturer of a new and improved product sold at a big box retailer. You are expecting big sales. You have invested significant capital in design improvements, and you have promised your investors that this product will meet and surpass the sales goals you established. Yes, you will beat the pants off the current industry leader. And then… you can hear it a mile away…that dull thud of lackluster growth. Your sales are barely nudging up, and the competitors are just as strong as ever. What is happening?
Mystery Shopping and Competitive Intelligence
In both cases above businesses owners are asking themselves, “What has the competition done that I haven’t?” and should be asking, “What exactly can I learn from them and (perhaps) incorporate in my organization.” This is where competitive mystery shopping comes into play. You want all the competitive intelligence you can get to help you turn the ship around.
Social Media, Yelp and Google reviews may at times provide some useful data, but nothing replaces the tried-and-true mystery shopper to go into your store and provide an in-depth analysis of the competition. Mystery Shopping is the best and often the ONLY way to prove (or disprove) what you believe about your competitors. Mystery Shopping services like
Service Performance Group (SPG) can send out a trained and qualified professional shopper to be your eyes and ears. We can take your theories and either prove or disprove them as well as independently observe and test other aspects of the product or service in question.
Several years ago, SPG worked with a client who was concerned that an industry rival with a new pay- for-service phone app was cutting into their more traditional subscription service platform. We dispatched shoppers with the same request/ scenario to see what happened. Would this new method of providing service prove to be a paradigm shift? Would customers loyal over the years now simply evaporate? (The answer was no… but significant information was obtained that led to significant changes allowing our client get ahead of the curve and not behind it.)
Most frequently mystery shopping is used by an organization to gain an objective viewpoint about their own organization. Additionally, a well-designed mystery shopping program can do much more than that. Mystery shopping can give you vital and actionable data you can use to understand and compete in whatever market you find yourself in. No one wants to be left behind or be the last to know what is really driving new customers to a product or service.
Is it Just about the Price?
What can you discover in a competitive mystery shop? Often the first thing that business owners think of is price. But of equal interest is the quality and even the packaging of the product. Does your product design, packaging and/or labels help or hinder your image? How do competing product stack up against yours, not just in regard to price, but also in regards to appearance, style, color, and overall quality.
If your product is actually a service, you might be focused more on service delivery. For instance, a spa owner might be interested in the average price of a service such as a facial or massage, but they should be equally interested in how that service is provided. Is the environment soothing and relaxing? Are spa robes and towels luxurious to the touch? Do the waiting room amenities truly show interest in your guests’ comfort? Sometimes it is much these types of perceptions that lead to or away from return business as much as the service itself!
Understanding a Changing Market
Successful businesses should know their markets well, but as much as they try they can also be behind the curve in identifying new consumer trends. Many if not most of millennials and GenZ’ers center their buying decisions not just on the product itself but strongly consider factors like ecological sustainability, social justice, and a living wage. If your store or product does not advertise or promote itself in a way that promotes these ideals, and your competitor does, you may be losing out.
What or Who exactly is the Target Market?
How does your competitor target and attract customers? Why are they specifically going after this group as opposed to another? Does their market overlap with yours? And if so, how? Perhaps there is a group that neither of you is working to attract?
Croc’s, the famously ugly shoe, originally debuted at a Florida boat show. They were marketed as a boat shoe because their plastic design dried quickly. Quickly new markets for these shoes evolved as they have quickly morphed (and morphed again) from a fashion statement to an anti-fashion statement, and found markets in healthcare, in kids and teens footwear, diabetic footwear, and are surged again during the pandemic by capitalizing on the Athleisure craze. If your product or store is missing out on these opportunities at re-invention and your competitor is finding and exploiting them – you need to up your game!
Store Layout and Design
Some stores and restaurants and retail spaces simply have that “WOW” factor. The store layout and strategic use of space can direct the flow and direct customers to specific items or product lines. Perhaps your business can learn from what they are doing.
Business Owners to a one will tell you how important it is to have a well-trained staff. The need for associates who are courteous, attentive, and knowledgeable can’t be overstated. You (hopefully) have full confidence in your staff and their ability to sell or serve, but it may be the case that your standards of service have dropped ever so slightly over the years. At the same time your competitor has been able to raise the bar ever so slightly on their service. Perhaps it is something as simple as providing crayons and paper to a toddler, serving complimentary bar munchies or bringing a dog a dish of water at an outside cafe. Sometimes it is the small things that make the biggest impact. You need to ask yourself if others are slightly outdoing your efforts at going the extra mile and if there are tweaks to your service standards that will erase this deficit.
Brand Perception and Awareness
Do customers perceive your competitor’s brand the same way they perceive yours? Who is perceived as more quality driven or cutting edge? Brands want specific qualities to be specifically identified with them and they work hard through marketing, advertising and training to promote their image. A mystery shopping program can assist you in learning about how your competition uses brand awareness to drive sales and where you might be lagging behind.
It’s not just WHAT you do, it’s HOW you do it
Process does matter. In the world of instant gratification, quick online deliveries via Amazon or other on line retailers and easy App based deliverables, even the most streamlined procedures can seem mired in molasses. If your competitor is dealing with issues like complaints, returns, and warranty service in a more streamlined or (generous) manner, this word will get out and will lose sales, especially if your customers post to social media to air their frustration.
Recently Service Performance Group was employed to conduct competitive mystery shops of a warrantied product to see just how a large group of competitors honored their warranties. Some of the questions our client needed to know was how replacement was handled for possibly defective products. What type of documentation was needed, and was the original paper work required or could the sale be accessed by a point of sale employee? They needed to know if the competitors operated in a more or less, “by-the-book” manner than they themselves did, leading to a perception that others might more flexible and easier to deal with. Our customer discovered this issue by monitoring social media and was sensitive to real or perceived issues regarding after-sale service.
Using Your Results Wisely
Once you find out what the competition is doing, then what? How exactly do you use your results? Some companies make the mistake of trying to go head-to-head with the competition by simply copying what they do. This rarely is a successful strategy. What companies need to do is to first evaluate their own business side by side with the competition.
Often it is not wholesale changes that are needed but tweaks to the menu, retraining of staff, or revisions to store layout. A competitive mystery shop program should be tailored to allow you to drill down to specific aspects of your organization, such as service, quality, variety, price, etc. and identify actionable items to correct. Not everything the competition does is good or good for you, but it does provide a different way of looking at your own business. Your focus needs to be on applying what you have learned about the competition to enhance and improve your organization. You do not need to be a carbon-copy of anyone or anything else.
Studying the competition has become a necessity in this highly competitive environment. Organizations of all sizes and from all industry groups need to keep abreast of what is happening around them. There is nothing unethical or untoward about keeping an eye on your neighbors so long as it is not done in a way that would harm their business. Simply reading about the competition on a social media site or listening to random chatter will not give you the information you need to make actionable and informed decisions. If you need an insightful, comprehensive and effective approach to competitive mystery shopping hiring a mystery shopping firm is the only way to go.
Service Performance Group can give you more than a report full of yes/no answers. We know how important your business is to you and how important it is to provide data you can use to improve your bottom line. If a thorough understanding of your market and your competition is of importance to you, Service Performance Group stands ready to assist.