setting-up-mystery-shopping-budget

One of the questions we hear most often about setting up a mystery shopping program is how to determine the frequency of mystery shops for a particular retail chain, but there’s no “one size fits all” approach to designing a successful mystery shopping program.

This is the problem with traditional mystery shopping programs – they typically spread the budget evenly across all the stores in a chain, shopping each store with the same frequency.

This approach ignores that all of your stores are different and produce varying profits. It also means that your program doesn’t earn the same return on your investment at every store, but that’s just the way mystery shopping works, right? Wrong.

You aren’t stuck with a mystery shopping program that shops all your stores with the same frequency and wastes your budget. Instead, you can create a program that optimizes your budget by adapting the frequency of your mystery shops to the sales contributions of individual stores.

The 80/20 Rule

You’ve probably heard of the Pareto Principle of economics, or the “80/20 Rule,” and its impact on businesses. Forbes recently explored how often this ratio is found in business; for example, how 20% of your customers generate 80% of your company’s income. In application, targeting your efforts to that top 20% of customers generates the largest impact on your business’s revenue.

The same idea can be applied to individual stores in your retail chain. A small group of stores produce a disproportionate amount of your revenue, so the bulk of your efforts should be applied to those stores to maximize the impact on your customers and profits.

The question is why traditional mystery shopping programs apply a blanket approach across retail chains without taking each store’s revenue contribution into consideration.

Doesn’t it make more sense to apply the 80/20 Rule and allocate more of the mystery shopping budget to the stores with the highest sales volumes?

These high-revenue stores are already where most of your customers shop, so it’s essential that these stores reflect the best customer service experience. Choosing the frequency and priority of mystery shopping by store volume ensures that your financial investment has the biggest possible impact on the largest number of customers, and therefore on your revenue.

In fact, the 80/20 Rule is a great place to start as you adjust your mystery shopping plan. Instead of a blanket approach, try investing roughly 80% of your budget right where it belongs – in the highest-volume stores.

Designing Your Mystery Shopping Budget

You don’t have to settle for a traditional plan that doesn’t adapt to your business’s unique needs. Instead, let us help you design an approach that prioritizes your high-revenue stores and maximizes the impact of your mystery shopping program. We’ll find the right balance of mystery shopping sampling and frequency that fits your budget and earns you the biggest return on your investment.

We’d love to talk to you about designing a plan that optimizes your budget.