The world of Mystery Shopping typically focuses on evaluating how businesses perform relative to rules, regulations, and the brand standards dictated by their owners and stakeholders. Definitions of compliance can come from many different sources, including formal corporate guidelines, manuals dictating Standard Operating Procedures (SOPs), and even government-regulated mandates.
For those of you unfamiliar with Mystery Shopping and its unique niche in the pantheon of Customer Experience research / measurement, here are two brief examples of Mystery Shopping in action:
- Mystery Shoppers at a Big Box retailer might check to make sure that the employee they meet once inside the store is wearing the proper uniform and provides a friendly, welcoming greeting.
- Just down the street, Mystery Shoppers at a financial institution assess whether a bank teller provides them with the proper financial disclosures at the end of their transaction.
In both instances, measuring a location’s compliance to its brand standards has both a near- and long-term impact. In the near term, compliance means that the location and its employees are creating the look and feel of the ideal “Customer Experience.” Again, this is defined by directives from the larger organization (in their SOPs and stated business goals and objectives), and—assuming they have access to the data through a Voice of the Customer (VOC) program/survey or some other outlet for consumer feedback—brand standards can (and should) be grounded in the wants, needs, and expectations of one’s customer base.
Compliance to Brand Standards: Immediate Impact and Long-term Effects
In the Big Box retail example above, brand standards—in accordance with what consumers claim to be their “ideal experience” may include how employees look (uniform) and behave (greeting), among many other factors. The theory here is that when a company delivers the kind of Customer Experience that consumers want, there is a much greater likelihood that these individuals will become (or remain) loyal customers, generate ongoing, incremental revenue through repeat visits, and recommend the brand to others.
At the same time, compliance also has a long-term impact. In the Financial Services example, a bank that fails to properly provide its customers with the appropriate financial disclosures—or in some way does not follow prescribed government regulations and procedures—can face significant punitive repercussions, be it legal, financial, relational, etc… In the age of Social Media, who is to say what is actually more damaging to a brand—a $10M fine from the government or the potential controversy and myriad of negative press and customer stories/complaints, now made public, all because of that violation? Either way, news—as we all know—doesn’t just travel fast anymore, but instantly—and strongly influences opinions, behaviors, and buying decisions of both current and potential customers.
Regardless of how compliance is defined or assessed within a given industry or for a specific brand, the way in which compliance is measured (i.e. with a Mystery Shopping program), must be viewed by the brand as positively contributing to its larger business goals and objectives. In other words, to remain alive, it must justify its existence. Any Mystery Shop program worth its salt (and worthy of a sustained presence within an organization), must clearly demonstrate ROI (Return on Investment) to its owners and stakeholders.
Justifying Mystery Shopping: Awareness of Restroom Non-Compliance
To illustrate the power and potential of demonstrating Mystery Shopping ROI to a client/brand, consider some of MaritzCX’s recent Mystery Shopping work in the Retail Petroleum industry.
Both industry benchmarking and VOC data, as well as our own independent research, continuously supports the notion that the condition of a Restroom, anywhere—and especially for those customers actually in need of a Restroom—is a key driver of overall satisfaction with the brand/site experience, as well as a driving force behind consumers’ likelihood to return to and recommend the brand to others.
This is why our Mystery Shoppers spend a considerable amount of time evaluating C-store Restroom conditions and identifying specific areas of non-compliance. Rather than simply indicating that a Restroom was “Dirty” and therefore not compliant, MaritzCX’s Mystery Shoppers provide detailed feedback on why a Restroom did not measure up to brand standards: “Trash on the floor, Fixtures damaged, Mirror cracked, Graffiti present on walls, Hand dryer not functioning, Toilet paper not stocked, etc. etc…”
These granular findings then serve as the basis for location-level action plans which sites can train their frontline personnel on and enforce to ensure that their Restrooms return to—and maintain—the appropriate level of cleanliness and functionality that both complies with the company’s brand standards and, more importantly, meets the needs and expectations of its customers.
Just like with the two examples mentioned earlier, Restrooms—when compliant—have a clear near- and long-term impact. The near-term impact is obviously the effect it has on the Customer Experience and consumer perceptions of the brand. The long-term impact of a clean Restroom, however, is where you can really begin seeing the direct connection to revenue, which, in turn, exemplifies the power and importance of Mystery Shopping programs. It provides the ROI needed to reassurance stakeholders that sustaining the Mystery Shop program only benefits the organization.
Mystery Shop ROI Case Study: Taking the Plunge(r)—The Impact of Restroom Experiences on Purchasing Behaviors
Backed by a recent industry study conducted by NACS,* (Source) we were able to provide our Retail Petroleum clients with tangible ROI data to justify the importance of—and need for—an ongoing Mystery Shop program. Specifically, we were able to show how “Restroom Compliance” at a brand’s site links directly to its bottom line. Consider this statistic:
“1-in-5 convenience-store customers decide whether or not to make a purchase in the C-store based on their experience in the Restroom.”
In other words, for any given C-store, 20 percent of its standard foot traffic will make an in-store purchase provided they had a positive (or at the very least—not a negative) experience in the Restroom. However, this 20 percent are just as likely to leave the C-store without making a purchase if their Restroom experience was negative.
Now “1-in-5 customers” may not seem that staggering, but consider the total revenue a brand has the potential to gain or lose at each of its locations from this 20 percent customer segment in a given year:
- The most recent data estimates there are approximately 154,195 convenience stores across the United States.* (Source)
- Across all brands in the nation, the typical US convenience store conducts an average of 171,132 transactions each year.* (Source)
- The average per-transaction amount for a U.S. convenience store is $8.56.* (Source)
Taking the average amount of spend ($8.56) and multiplying it across the average number of transactions at a C-store in a given year (171,132) is roughly $1.4M in annual revenue. Now, after you factor in that 20 percent subgroup of customers (the1-in-5), every location has approximately $293,000 on the hook each year–all contingent on the quality and condition of its Restroom(s). Take a moment to let those numbers sink in. That’s nearly $300,000 in potential revenue that could be yours—but only if each every one of your customers who walk into your Restroom later walk out with a smile on their face (or at the very least, isn’t disgusted by what they just experienced).
Put Simply: Having Clean Restrooms Just Makes Financial ‘Cents’
Obviously maintaining a clean Restroom makes perfect sense—it is, after all, what the customer expects. And the experience itself, whether positive or negative, becomes a direct reflection of the brand in consumers’ minds. But once you factor in what we have learned regarding buying decisions of 1 in 5 customers to a C-store… it also starts making financial sense.
Think about it. Do you really want to be the one explaining to your boss that you missed out on $300,000 in revenue just because you never remembered to refill the soap dispenser? (Didn’t think so.)