The Weekender, July 18, 2004. Carrie Brunet

Service, products the focus of firm called in by business owners to see how they stack up

David Lipton loves his job, and chances are you would too. Imagine getting paid to eat out, to be entertained or to shop.

“I always say ‘if you love what you do, you'll never work another day in your life,'” Lipton said from his office on Don Mills Road.

Lipton is the president of Sensors Quality Management Inc., a mystery shopping corporation.

Just as the title indicates, mystery shoppers shop in stores, dine in restaurants, stay in hotels and, unbeknownst to the business in question, fill out a quality control survey in the end.

It's a job shrouded in, well, mystery. Pardon the cliché.

“Most people are interested in it because it sounds like a fun way to make money,” Lipton said.

And it is.

“I don't particularly like shopping, but I like eating out and traveling,” Lipton said. “Many of our clients are in the hospitality industry.”

There is some light reading required, some online modules to complete (the more knowledgeable you are, the better your assignments) and you may have to do a bit of role-playing.

“You have to be comfortable playing different roles or scenarios,” Lipton said.

Male mystery shoppers could be sent into a lingerie store to buy a gift, or women could be sent to a mechanic to see if they get fair treatment.

In most cases, shoppers have to foot the bill and are reimbursed later.

Reliability is also key. “We need someone who can get it done in a certain time frame,” Lipton said.

Mystery shopping is for all age groups, from 18 to 65. Basic computer and Internet skills are required for filling out forms after the shopping experience.

It's a job that many people would want, but few people do, because it's all contract work. And, unfortunately, it's not a vocation that you would want to rely on to make your monthly bills.

“It's not a full-time job, it's not even a part-time job,” he said. “It's more like occasional work.”

And sometimes the perks are worth more than the monetary compensation.

“There are times when you get goods and no money,” Lipton said. “Other times you get just money, or sometimes it's a combination of both.”

It's a fun time, with its odd moments.

“We've had everything from a fly in soup, or salad, to employees who tell us their entire life problems, like their wife leaving them,” Lipton said. “My partner had some guy try to pick him up in the washroom.”

He got into the industry when in the early 1990s he was “downsized.”

“I worked in the hotel industry,” he said. “People used to mystery shop me over the phone.”

He had a vague sense of mystery shopping, but did research to find out more.

Then he and his partner “threw $100 each into the kitty” for incidentals (business cards and such) and started their own business at home.

“Here we are 11 years later,” Lipton said. “We have 50, 000 inspectors around the world and work in 40 to 50 different countries.”

Their clients vary from bars and nightclubs to retail shops, automotive dealerships, banks, hotels and restaurants.

“They do it for different reasons,” Lipton said.

Sometimes a manager wants to find out why customer complaints are on the rise, while at other times, it's more a quality and service control issue.

Little details, such as how a nametag is displayed (right or left side of the jacket), how the customer is greeted, or how many times a phone rings before it is answered are often recorded by mystery shoppers.

“We don't tell anyone how to run their business,” Lipton said. “It's an unbiased evaluation.”

When Lipton got into the business, there weren't many Canadian companies offering the same service.

As Canadians, our standards are somewhat lax, Lipton noted.

“When Americans come here, we find them demanding,” Lipton said.

“They expect a certain level of service, and we are a little too laid back.”

Meanwhile, international trade is booming, making international standards more prevalent than ever.

“It's a global market,” said Lipton.

To find out more about mystery shopping you can visit www.sqm.ca.

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Financial Post, Tuesday, May 25, 2004. Mitch Moxley

For Craig Henry, there is no such thing as a leisurely dinner out. When Mr. Henry sits down at a restaurant, he is focused. He takes mental notes of everything, from the greeting at the door to wobbly tables to filthy washrooms, all of which he will later document in a report. And he does it without anyone noticing.

“You have to blend in,” he says. “You have to wear the right stuff and act the right way. You’re very focused.”

Mr. Henry, 41, is a “mystery shopper,” hired by companies for objective customer service evaluations.

Eleven years ago, Mr. Henry left the hotel business to co-found Sensors Quality Management Inc., a mystery shopping provider, with his business partner, David Lipton.

SQM started in an 80-square-foot room in Mr. Henry’s basement. Today, the business occupies a 15,000 square-foot office in suburban Toronto, employs 33 people and contracts from a pool of about 7,000 mystery shoppers around the world.

SQM is a shining example of a burgeoning business, now worth as much as $50 million in Canada and $500 million in North America. Restaurants, retailers, hotels, travel agencies, government services, doctors, airports, and airlines all use mystery shoppers to evaluate customer service.

“I think you’d be hard-pressed to find a major retailer in this country or in the U.S. that does not have a mystery shopping program, or has not had one, or is not considering one,” says Sean Cavanagh, president of Tenox Appraisal Systems Inc., the pioneer of mystery shopping in Canada, first providing the service twenty years ago.

Shoeless Joe’s restaurants, a client of SQM, use mystery shoppers for over 300 visits annually at its 35 Ontario locations, each visit costing between $70 and $100, plus meal costs. Customer service is a way to stand apart amid stiff competition in the casual dining industry, says Joel Sisson, vice-president of operations for the sports-themed restaurant.

Mystery shopping “gives us an unbiased opinion of what’s going on,” Mr. Sisson says.
It’s probably the most important thing in our industry right now, ensuring that you have a very high level of customer service.”

Ten years ago, businesses such as Shoeless Joe’s had about five mystery shopping providers in Canada to choose from, Mr. Cavanagh figures. Five years ago there were ten. Today, there are about forty companies in Canada, ranging from local providers to international competitors, such as Service Intelligence of Calgary, Canada’s largest mystery shopping provider who contracts roughly 50,000 shoppers in North America.

“Is there growing competition? Absolutely,” says Mike Green, vice-president of the Texas-based Speedmark Information Services.

“Prices have come down a lot- defiantly in the last two years. Again, it’s more competition. A year ago I was bidding against three companies, now I’m bidding against five or six companies.”

Lower prices have led to underbidding as mystery shopping providers scramble for clients, forcing providers to adopt new strategies.

Companies now aggressively pursue clients by attending trade shows on a rgular basis and boosting advertising, says Mr. Green, who doubles as president of the 150-member Mystery Shopping Providers Association.

Both Tennox and SQM try to set themselves apart by using an experienced network of mystery shoppers.
SQM, for example, uses a nine-step training program: a step one shopper can evaluate a fast food restaurant and make about $10 and a free meal, while a step nine shopper can earn $150 for staying overnight at a hotel.

Byron McCann, president and chief executive of Service Intelligence, whose clients include large retailers and telecommunications firms, have shifted from simply providing objective information to analyzing the data to help his clients improve customer service.

“To compete we have to go up a food chain and provide a new service to our clients,” Mr. McCann says.
Mystery shopping providers have also implemented systems and new staff to meet growing technological demands. Five years ago, Mr. Cavanagh was delivering hard copy reports to his clients. Now he delivers them through e-mail.

“You better have some very, very technically capable staff designing these reports, designing these systems,” says Mr. Cavanagh, whose clients include 25 large Canadian retailers.
“Today it’s real time. They want reports delivered in 24 or 48 hours.”

Although technology has created a barrier to entry, Mr. Henry of SQM says business will keep blossoming. Customer service, he says, is the only way people can differentiate one company from the next when the product and prices are so similar.

“What’s the only thing that sets you apart from your competitor? It’s service,” he says. “It’s the final frontier.”

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