What's the Mystery.

• Author: Lubin, Paul C.
• Position: Improving customer service through the use of mystery shoppers - Column

Evaluations acquired through mystery shopping can help your bank pinpoint service-delivery weaknesses and enhance your sales culture.

Mystery shopping is a powerful tool that banks can use for a variety of purposes, including strengthening sales culture and improving customer service.

The technique uses a professional "shopper" who contacts the bank, either in person or on the telephone, and conducts a transaction--such as asking a question, inquiring about an account or opening an account. Immediately after completing the shop, the shopper completes a questionnaire describing the service provided by the employee. The evaluation can be repeated periodically.

Bank management can use evaluation scores to identify adherence to sales and service standards, to pinpoint strengths and weaknesses and measure progress in improving problem areas.

Mystery shopping originated in the retail sector in the 1960s, making it one of the oldest market research tools used by bank professionals. Back then, mystery shopping was fairly unsophisticated and primarily used shoppers to observe retail conditions and measure how prominently a product was displayed. The banking industry began using mystery shopping in the 1970s to monitor the interaction between branch staff and customers. At first, bank professionals used shopping to evaluate the sales process, cross-selling, employee product knowledge and customer relation skills. The programs were usually conducted annually or, at best, semiannually. The evaluations served as benchmarks or diagnostic assessments of sales and service.

In the early to mid-1980s, bank professionals began to use mystery shopping as part of a program to improve employee performance. When mystery shoppers tested more frequently--as was already being done in the retail sector--bank employees learned to treat each customer more carefully. They behaved this way because they realized that almost any customer could be a mystery shopper. And branch managers received a report about the employee's performance whenever a mystery shopper visited.

Many bankers took a page from the retail marketer's handbook and began mystery shopping monthly, bimonthly or quarterly. Almost all bankers provided their branch managers with report cards describing employee performance and adherence and nonadherence to sales and service standards. Some banks integrated the results of the shopping program into their incentive programs.

Today mystery shopping plays an even...