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\title{"A Conceptual Study of Mystery Shopping as an Ancillary Method for Customer Surveys"}
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             \author[1]{S. Suneetha  Devi}

             \author[2]{Prof. A. Vidhyadhara  Reddy}

             \affil[1]{  Padala Rama Reddi College of Commerce and Management}

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\date{\small \em Received: 6 December 2015 Accepted: 31 December 2015 Published: 15 January 2016}

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\begin{abstract}
        


This paper specifies proposition of mystery shopping as a complimentary method along with customer surveys. It focuses on the antecedent of mystery shopping- observational methods. This paper addresses the gap in the existing research on mystery shopping. It covers customer surveys and observational methods of research. It also covers the existing academic research on mystery shopping and the application of mystery shopping by corporates. Subsequently, drawing on the existing literature, it discusses the validation of mystery shopping. It also outlines the implications of this research for future research and practice.

\end{abstract}


\keywords{mystery shopping, customer surveys, observational methods.}

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\section[{Introduction}]{Introduction}\par
or long 'Service Quality' and 'Customer Satisfaction' has been a favored area in academic as well as corporate research. However, most of the research has been done in developed economies. With rapid growth and innumerable opportunities, customer satisfaction and service quality has now become the core concern of every service institution in India. The motive can be due to apparent competition among institutions offering the same service \hyperref[b14]{(Goodsell, C. T., 1981)}.\par
It is well known that it is very difficult to evaluate service quality and customer satisfaction and most famous method of the classical approach is the inquisition which uses a questionnaire to investigate after the event \hyperref[b39]{(Yang, 2002)}. Questionnaires are simply survey instruments designed specifically to help companies measure what customers think about their services and how satisfied (or dissatisfied) customers are with their service. Nevertheless, getting customers to take the time to share their opinions isn't as easy as it sounds. Today's consumers are very busy, and they aren't necessarily going to take time out of their busy schedules to provide company with information. In one such study by \hyperref[b21]{Hesselink et al, 2003}, it was found that 45\% of customers, who experience a problem with a service, don't complain and 45\% of those never return.\par
To overcome the shortcomings of customer surveys, companies started using Mystery Shopping as a complementary method. Mystery shopping originated as a technique used by private investigators to identify and prevent employee theft and subsequently has been adapted by the marketing department to measure their customer service processes. Over a period of time, businesses stopped hiring individuals to evaluate their businesses and instead turned to market research companies for the service. Market research companies began cornering the market in terms of mystery shopping.\par
Today mystery shoppers provide customer service information for restaurants, retail stores, fast food chains, banks, gyms, movie theaters and even car dealerships. There are some instances where market research companies are hired to provide mystery shoppers to evaluate housing services, churches, as well as government-run organizations such as law enforcement facilities, park services and hospitals. Mystery shopper's research in the business field has been already broadly applied however; rarely this subject has been deliberated on the academic front.\par
Economic Times states that in India, the mystery shopping business is in its infancy but quickly picking up speed. The industry is estimated to be worth around 700 million and employs over 0.2 million people on a part-time basis. The world market of mystery shopping's service is estimated to be about 2 billion dollars.\par
This paper examines the concept of mystery shopping along with customer surveys and observational methods. While existing research has focused mostly on mystery shopping practices but nothing much has been written on the antecedents of mystery shopping. This paper addresses this gap in the existing research on mystery shopping. It first compares mystery shopping with customer surveys. It then digs into the rudiments of mystery shopping i.e. observational methods of research. Next it reviews the existing academic research on mystery shopping. It then reviews the adoption and application of mystery shopping by corporates. Subsequently, drawing on the existing literature, it discusses the validation of mystery shopping. Finally, it describes the limitations of this paper and its implications for future research and practice. 
\section[{II.}]{II.} 
\section[{Literature Review}]{Literature Review}\par
The Market Research Society ("MRS") defines mystery shopping or 'mystery customer research' as:\par
"The use of individuals trained to experience and measure any customer service process, by acting as potential customers and in some way reporting back on their experience in a detailed and objective way."\par
According to Wilson, A. M., and Gutmann.J (1998), Mystery shopping is the art of obtaining information on customer service, it is designed to capture the experience of customers and staff, and measure their satisfaction level and performance. It helps to gain insights into their experience at various points of interaction in a particular service environment.\par
According to Dawes, John G. and Byron Sharp (2000), the importance of providing acceptable levels of customer service have doubtless been appreciated by businesspeople for as long as trading has occurred. Managers can monitor the levels of service quality in several ways, by surveying customer subjective perceptions of service quality or by using trained research personnel to pose as shoppers and objectively score various aspects of the service experience as objectively as possible. This method is often referred to as "mystery shopping". \hyperref[b27]{Poisant (2002)} suggests that an approach "to analyze customer, or citizen experiences, an organization must put itself in citizens shoes and ask questions about how they are greeted, the appearance of frontline staff, and the aesthetics of the office place", is usually achieved by "Mystery Shopping". Mystery shopper, or secret shopper, is an independent contractor who visits your establishment unannounced, interacting as a customer to provide objective quantitative and qualitative feedback about the experience.\par
Activities similar to that of Mystery shopping can be found in history, famous being that of Emperor Akbar, who used to disguise as commoner and used to move around his kingdom during nights to know the real status of subjects. However, the term "Mystery Shopping" was coined in the 1940s by WilMark \hyperref[b41]{(Zikmund \& Babin, 2010)}. Mystery shopping originated as a technique used by private investigators to identify and prevent employee theft-primarily at banks and retail stores. By posing as workers, mystery employees could become part of the organization and observe the operation and employee behavior, including identifying opportunities for theft and workers that might be stealing.\par
In 70's, electronic goods manufacturers like Sony, Philips, Panasonic and Bose started using Mystery shoppers to appraise the level of sales personnel's technical and functional knowledge of the electronic products. Mystery shoppers helped the companies to identify the inadequacies and thus helped in improving the technical skills of their sales personnel. As the industry grew into the 80's and 90's, fuelled by the internet, the mystery shopping industry experienced rapid growth and acceptance. Today, there are more than one million mystery shoppers in the USA and this service is provided by more than 500 special agencies. Region associations of Mystery Shopping providers, like Europe Mystery Shopping Providers Association (MSPA Europe); North America Mystery Shopping Providers Association (MSPA North America), have been formed in Europe, Latin America, Asia and the USA. 
\section[{III.}]{III.} 
\section[{Mystery Shopping and Customer Survey}]{Mystery Shopping and Customer Survey}\par
Customer survey and mystery shopping are two methods by which a company can gather information about the way its products and services are delivered to its customers. "What gets measured gets done." A phrase heard so often these days it has almost become cliché. However, at face value, it has particular meaning to the topic of this research.\par
Mystery shopping is different from customer satisfaction surveys in that it explores the actual customer experience at a snapshot in time (rather asking customers for their views retrospectively) and records specific details of that particular experience. As such, it can be a very powerful tool for service managers and help to highlight clear action points for improving service delivery.\par
Customer feedback programs gather data in the form of recalled impression. For instance a questionnaire is designed based upon specific data points companies want to gather. After receiving the service or product, the customer is asked a number of questions, typically around satisfaction levels. When enough samples have been gathered, analyses are required to ferret out the meaning and validity of the results which will result in giving an understanding of how customers view a particular product or service. Unlike customer satisfaction research that measures what customers perceives or remembers, mystery shopping captures information at a moment in time when the employee is serving the consumer. It takes into account customers and potential customers. It profiles the customer-employee interaction and tells whether it is consistent and of a nature that adheres to standards.\par
Mystery shopping programs gather data in the form of participative observation. A questionnaire is designed based upon specific data points, and observers, trained on those specifics, pose as customers to gather the information. The parameters are tightly controlled and can include measurements such as timings, product knowledge, specific product quality, service standards, and environmental attributes (such as cleanliness or store maintenance). Typically, a shop report is given out for each visit. These reports can be used to create on-the-spot performance improvements, which are valuable in and of them. If enough visits are completed, the data can be compiled and analyzed for trends, performance drivers, regional discrepancies, and so on. In combination with other datasets, such as sales volumes, correlations can be discovered and it becomes a powerful tool for business improvement. 
\section[{a) Rudiments of Mystery Shopping}]{a) Rudiments of Mystery Shopping}\par
Technically, Mystery shopping is an observational method to collect research data. Observing usually means watching and listening, although it may entail just watching or listening. Marshall and Rossman (1989) define observation as "the systematic description of events, behaviors, and artifacts in the social setting chosen for study" (p.79). Various techniques adapted by the mystery shoppers are in fact observational research methods. \hyperref[b35]{Wilson (1998)} opines Mystery shopping as a form of participant observation in which researchers act as customers or potential customers to monitor the processes and procedures used in the delivery of a service.\par
Observational research can be classified by the nature of study undertaken i.e. qualitative studies or quantitative studies. In quantitative research (deductive, objective), the researcher is ideally an objective observer who neither participates in nor influences what is being studied. In qualitative research (inductive, subjective), however, the researcher can learn the most by participating and/or being immersed in a research situation.\par
Observational research can also be classified as structured and unstructured. The SAGE Dictionary of Social Research Methods defines structured observation as "a systematic method of data collection, where there is considerable pre-coding and the observation takes the form of recording when, how often, or for how long the preceded behaviors occur". By contrast, informal or casual observation is unstructured, and may form the basis of future structured observation. Informal or casual observation methods are sometimes seen as fewer objectives than structured observation, because the observer may be focusing on behaviours without a clear theoretical framework, and may not be coding the behaviours in a reliable, that is, repeatable way.\par
Another classification of Observational research based on researcher's participation is Participant and Direct (Non Participant) Observation. Guest et.al.  {\ref (2013)} opine that direct observation is primarily a quantitative technique in which the observer explicitly counts the frequency and/or intensity of specific behaviours or events. On the contrary, Participant observation is one type of data collection method typically done in the qualitative research. \hyperref[b23]{Macionis \& Plummer (2005)} explain Participant observation as a form of sociological research methodology in which the researcher takes on a role in the social situation under observation and the aim of the researcher is to experience events in the manner in which the subjects under study also experience these events. According to John Whiting "An observer is under the bed. A participant observer is in it."(Guest et all. 2013, p.78).\par
Observational research can also be classified based on the disclosure of the observation to the subject as Overt observation and Covert observation. \hyperref[b23]{Macionis \& Plummer (2005)} describe that Overt observation involves the researcher being open about the reason for his/her presence in the field of study and the researcher is given permission by the group to conduct his/her research whereas Covert observation involves the researcher observing the members of the social group without informing of the reasons for his/her presence and the research is carried out secretly or covertly.\par
Mystery shopping uses a trained observer posing as a client or customer to contact agency offering service. The technique focuses on "activities and procedures that do or do not occur rather than gathering opinions about the service experience". In addition to this fundamental training, the nature of mystery shopping requires shoppers who are "objective, smart, and able to think on their feet". The validity of the mystery shopper technique hinges on the employee believing that the observer is in fact a real customer, not an "undercover" evaluator. Figure  {\ref 1} shows the similarities of mystery shopping methods with that of observational methods.\par
Mystery shopping uses participant observers to monitor and report on a service experience \hyperref[b35]{(Wilson, 1998)}.\par
Mystery shopping utilizes "complete participants", with the researcher masking the true reason for the interaction and being the only participant in the interaction with knowledge of the truth  {\ref (Gold, 1958, p. 219)}. When the mystery shopper poses as a guest, they become a primary researcher, concerned with first hand involvement in the situation, "allowed to hear, to see, and to begin to experience reality" as guests do  {\ref (Marshall \& Rossman, 2006}, p. 100). Mystery shopping uses covert participant observers, deceiving the subjects as to the intention of the visit \hyperref[b36]{(Wilson, 2001)}.\par
Participant observation is a research method requiring the researcher, in this case the mystery shopper, to become an active participant in the activity being studied \hyperref[b1]{(Becker, 1958)}. Mystery shopping utilizes "complete participants", with the researcher masking the true reason for the interaction and being the only participant in the interaction with knowledge of the truth  {\ref (Gold, 1958, p. 219)}. Mystery shoppers mimic the actions of ordinary participants, normally posing as guests or customers of the organization.\par
properties. In this research a mystery shopping instrument was developed and weights were assigned to items based on the operational goals of the company under study. Individual items or need of the company were analyzed in order to determine exactly where training was needed in each of the categories, providing a highly specific and targeted analysis. Finally, items were put into SERVQUAL categories and analyzed in order to determine in which dimensions the company were performing well and where improvements could be made.\par
According to (Finn A \& Kayande U 1999), mystery shopping is best suited when assessing objective characteristics of outlet operations, such as the store environment (e.g. were the aisles kept clear? Were all point-of-purchase signs in place?). At the same time, it can act as a supplementary source for subjective quality ratings on services.\par
Hudson et al. (  {\ref 2001}) used mystery shopper to test travel agent recommendations. Thirty six actual visits and one hundred twenty telephone calls were used to get an insight into what happens when potential holiday makers call or walk into a travel agent to book a holiday.\par
In the study conducted by Adam Finn, 2001, mystery shopping is quiet cost effective in benchmarking the store environment of individual retail stores. It is also a reasonable approach for benchmarking the personal selling experienced at retail stores, although the number of visits necessary for a reliable result is about twice as many as it is for the store environment. The results of the study clearly confirmed that mystery shoppers can provide viable alternative to consumer survey methods for benchmarking retail performance.  {\ref Chen et al. (2007)} in their research used a Semi-Mystery shopper to observe and reflex the quality of frontline clinical staff's performance. In their research, they could not let the mystery shopper pose as a patient due to fear of being detected by the medical staff. Hence the mystery shopper posed as the patient's family and they termed him semi-mystery shopper.\par
Morgan \& McCabe (2012) used experiential project for their consumer behaviour course. Students were charged with designing their own research including observational research (mystery shopping), evaluate a retailer and deliver a written and oral report which included results and recommendations for the retailer.\par
Adam Finn, 2007, conducted a study that uses test-retest mystery shopping data to investigate the variance due to the main and interaction effects of test occasions and the consequences of ignoring them for different managerial decisions.\par
Steve Charters et, al., 2008, used a modified mystery shopping approach which consisted of a short open ended questionnaire on the SERVPERF technique of measuring service performance and a trained focus group that revisited the questions covered in the questionnaire in more detail.\par
The purpose of mystery shopper is to understand the frontline staff's personal performance, a diagnosis tool to confirm lose efficacy and fall point of organization in service process \hyperref[b8]{[Dawson \& Hillier, 1995]}. It is also a reward measure tool which can encourage employee and provide the organization with the service to value the competition to others .\par
Mystery Shopping has become increasingly popular to companies for addressing today's business issues. The early programs had, as their goal, to evaluate retail conditions-what products were available, whether one product was recommended over others, or how prominently a product was displayed and where. These early programs were deemed "observational" because the program objective was to have the shopper observe and record what he or she saw.\par
Mystery shopping became much more useful when mystery shoppers posing as customers or potential customers-based their evaluations not only on observations but also upon actual retail transactions-for example, purchasing a product from a sales clerk at a department store, opening an account at a bank or buying gas.\par
Mystery shopping is used for a variety of purposes, including the monitoring of an organisation's own customer service, the levels of service offered by competitors, and evaluating if and how resellers are promoting a supplier's goods  {\ref (Wilson, 1998a} {\ref (Wilson, , 1998b))}. Mystery shopping is widely used both in the private sector, as well as the public sector. Even institutions such as hospitals use mystery shopping, sending researchers into the facility posing as a patient requiring treatment  {\ref (Millstead, 1999)}. 
\section[{c) Mystery Shopping In India}]{c) Mystery Shopping In India}\par
Mystery shopping adds value and mystery shopping is emerging as an important tool for retailers to get an 'outside-in' view of their stores. Fashion retailers and department stores state they conduct mystery shopping studies at least half-yearly. This is done both store-wise and region-wise.\par
The mystery shoppers supplement the 'Voice of Customers' gathered through feedback in-store, online or SMS, visitor book comments and through social networks like Facebook and Twitter. A measure that most retailers are planning to institutionalise these days is mystery shopping which is evident by the fact that 88\% of retailers have created and formalized processes to obtain feedback on their stores via these initiatives (TCS study on retail, 2013 report).\par
Fabindia has Mystery Shopper Program to gauge the customer satisfaction level. Mystery shoppers posing as normal customers perform specific tasks such as purchasing a product, asking questions, registering complaints and then provide detailed reports or feedback on their shopping experiences to the management. Marico's Kaya Skin Clinic gets mystery shoppers to visit its 43 clinics once a month, and depending on the reports of these shoppers, employees either get a bonus or suffer salary cuts. Pramod Kulkarni, group general manager at The Fern Hotels \& Resorts, says mystery shoppers have helped his group identify flaws and improve service standards. Chief operating officer at PVR Cinemas, says the theatre conducts at least 12 mystery audits per cinema per year. The audits have helped improve upon the standards of maintenance of the washrooms. Ford India Pvt. Ltd, Samsung Electronics Co. Ltd and Citibank NA, businesses are using mystery audits across different points of sales to track consumer experience. Ford claims to have got tangible results from mystery shopping audits in the last two years. Global ecommerce company Amazon.com Inc. is said to be engaged in a mystery audit for an intensive market survey to study the e-commerce market in the country. TOI reported that many brands such as Titan, Arrow, McDonalds, Reliance, Tata, Blue dart, Kimaya Fashions, Samsung, Shoppers Stop, ICICI and Axis Bank among a mounting list of other Indian brands that are hiring mystery shopping services as a feedback and strategy development mechanism.\par
Apart from large companies that recruit mystery shoppers directly, there are several service providers like Shaw, Red quanta, Channel Play, We mark India, MRSS India, Floor walk, RAMMS, HS Brands, SGS India, IMRB and many more who recruit mystery shoppers and send them to various clients. Apart from hotels, airlines, retail companies, banks and even educational institutions have begun to conduct mystery audits. 
\section[{IV.}]{IV.} 
\section[{Discussion}]{Discussion}\par
This paper has covered four aspects of mystery shopping i.e. comparison of mystery shopping method with customer survey method, foundations of mystery shopping method being from observational method, academic research on mystery shopping and existing practices of mystery shopping in India.\par
First, the paper focused on the short comings of customer surveys and found that mystery shopping can help in overcoming those shortfalls. The shortcomings being that customer surveys rely on the respondent's memory of previous service encounters and customer perceptions are by definition subjective i.e. two customers can perceive the experience of the same level of service in different ways. Second, the paper concentrated on relationship between mystery shopping and observational method of research. The study found that the foundations of mystery shopping lie with observational methods of research, thus validating the mystery shopping method. Third, the paper discussed the existing academic research on mystery shopping. The study found that even though some research has been done on mystery shopping but hardly anyone has concentrated on the reliability and validity of mystery shopping method except for the research by Finn and Kayande. Finally, the paper covered the adoption and application of mystery shopping by Indian corporates. The study found that many corporates have institutionalized mystery shopping and there are many companies who are providing mystery shopping services. However the study found that the corporates have not disclosed the procedures of mystery shopping.\par
The discussion in this paper suggests certain directions for future research. First, future research can carry out empirical studies to examine empirical support for the propositions specified in this paper. For instance an empirical study can be done for comparison between mystery shopping data and customer survey data. Similarly, studies can be done on the performance of mystery shopping audits i.e. whether there is any change in footfalls or sales after implementation of mystery shopping audits. Further empirical studies can be done to assess the reliability and validity of mystery shopping method.\par
Proposition specified in this paper also have some implications for practice. The propositions specified in this paper, if proven in empirically, can provide guidelines on how to improve service quality and customer satisfaction. This implication for practice highlights the possibility of predicting and controlling customer defection.\par
V. 
\section[{Conclusions}]{Conclusions}\par
The Indian retail scenario is witnessing a noticeable shift with modern retails formats slowly replacing traditional forms of retailing. Competition is increasing with various Indian and International marketers fighting for a share of wallet of the Indian shopper. With growth in retail, the concept of Mystery Shopping is growing in India and very little has been written on how mystery shopping is undertaken and the steps taken by users and providers to ensure that a true measure of service performance is obtained. This paper points out propositions which may provide a comprehensive solution for understanding consumer behavior.			\footnote{"A Conceptual Study of Mystery Shopping as an Ancillary Method for Customer Surveys" © 2016 Global Journals Inc. (US) 1} 			\footnote{"A Conceptual Study of Mystery Shopping as an Ancillary Method for Customer Surveys" © 2016 Global Journals Inc. (US)} 			\footnote{© 2016 Global Journals Inc. (US)} 			\footnote{"A Conceptual Study of Mystery Shopping as an Ancillary Method for Customer Surveys"} 			\footnote{© 2016 Global Journals Inc. (US) 1} 		 		\backmatter  			  				\begin{bibitemlist}{1}
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