C-STORE ISSUES - INDUSTRY VOICES

Jayne Keedy

JKS Inc. Market Research

Title: President

Years in the industry: 20 years

Family: Husband David, daughter Rebecca, stepdaughter Rebecca

Hobbies or Activities: Reading as many Sunday papers as possible, shopping (of course), and making the rounds of museums

First job: Clerk in toy store at Six Flags Over Texas

Dream job: Restaurant critic (actually did this once)

What's your average c-store purchase: Water or sodas (used to be cigarettes, but I quit)

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Taking the mystery out
of mystery shopping

Few busy retailers stop to think about the next day's business, much less their customer base five years down the road. So it's no surprise that hardly anyone is thinking about a lifetime of business. But think about it. If a c-store loses a customer because of bad service, poor products or an unappealing atmosphere, it might have lost a lifetime of business. (Or with today's mobile society, at least a few years worth!)

As a market research firm whose primary business is customer satisfaction surveys, we soon found that a well-planned and consistent mystery-shopping program is one of the most important strategies for keeping and attracting business. And surprisingly, it's also a great way to retain employees.

What's mystery shopping? Selected individuals portray actual customers who "shop" a store. The shopper follows a set script that details what should be observed, purchased, etc. Then, the shopper fills out a survey evaluating the c-store's atmosphere, employees and products -- everything from whether the clerk has a name tag, to whether a new product line or brand display is being used effectively.

Collecting data

The surveys -- often submitted by shoppers online -- are input into a database, and detailed reports pinpoint problem areas as well as areas where the store is excelling. The shops also play a critical role in helping c-stores avoid harsh sanctions and civil penalties from sales of alcohol and cigarettes to minors. For instance, in an alcohol "compliance" program, shoppers over age 21 and under age 25, buy beer or wine. Most stores have a policy that a clerk should ask for identification if the buyer appears to be age 27 or younger (many stores use age 30). So the shoppers record whether they were "carded," and the identity of the clerk.

The evaluation is only half the process, though. And it's the other half that often worries both management and employees alike. If you do encounter problems, you have to correct them. Unfortunately, a lot of people immediately assume that this means firing or penalizing the responsible employee.

Employers should look at it a bit differently, as if this were an opportunity to help their workers. Bad customer service or an untidy store may have underlying reasons. Not that this justifies the behavior, but it creates a framework for the management to work on improving the problems. For example, we heard of clerks who were inundated with a barrage of customers (a few of them school kids with a penchant for pocketing items without payment) every day just as their shift was nearing an end. Tired and trying to handle unruly kids, spills and other mishaps, they became abrasive to customers. The manager sat his employees down and told them that together, the three of them would find a solution to the problem, because it was unfair to take frustration out on customers. The three quickly decided to add more overlap and have another employee come in for the end of the shift, thus freeing up an employee to work in the store, cleaning, restocking and offering a deterrence to the shoplifters.

Communicate

It's also incumbent on management and ownership to relate the purpose of the mystery-shopping program to their employees, to take the mystery out of it. Openness prevents distrust and derision from employees who naturally don't appreciate being spied on. Once again, framing the programs as an opportunity to learn and keep alert usually makes enough sense to sell employees on the idea.

One clerk we talked to, Keith, actually enjoyed the prospect of facing mystery shoppers and said it made good customer service seem more natural. "I was always wondering, 'Is this a mystery shopper, is she a shopper, is he one, and so on,'" he said. "At first, it was a bit unnerving. But then I asked myself, 'Well what would any customer think if I was rude or the store was a mess?' After all, I'm a customer when I'm not working, and I know how I like to be treated."

Mystery shopping also lets you reward good employees. It boosts their esteem and helps retain them, which is especially important in an economy that makes finding and keeping quality employees increasingly difficult.

Today's laws

Additional training in alcoholic beverage and tobacco sales laws and rules (much of which is mandatory now for c-store employees) may be an option. Usually, employees that fail to card once learn the possible legal consequences if they're caught in a similar situation by law enforcement agents, and they learn to ask for identification.

Liability is another major problem. If an underage drinker is hurt or killed in an accident or injures someone else, the store that sold the alcohol to them is liable for damages. The average claim for lawsuits settled over the mark of $350,000 is a whopping $668,000, according to data from Federated Insurance Companies. Even smaller settlements in the $10,000 range can incur legal costs as high as $13,000 or more. Add to that the cost of higher insurance rates and the damage of bad publicity, and it's easy to see why training and monitoring of employees is so important.

Going forward

So the end result of a well-planned mystery shopper program is customer loyalty and lower employee turnover: profit and cost savings. There are many other evaluation techniques -- surveys, intercept interviews, focus groups -- but mystery shopping offers the closest thing to a real world experience for how to keep customers. After all, what's the point in attracting new business, if you can't keep the business you have?