Giving business away to competitors is not what any business desires. You may be losing revenue to your competitors if your pricing and customer service does not meet customer expectations.
Charles Stiles and Carl Phillips, Mystery Shopper Services executives, have helped companies fine-tune customer service for over forty years. They both believe that competitive shops are a valuable piece of an effective mystery shopping strategy. We interviewed them to learn more about the why and how of competitive shops.
Why is shopping your competitors so important?
Competitive shops should be done on a periodic basis for as long as you are in business because it’s the most cost-effective and accurate way to evaluate how your prices and services stack up against the competition, regardless of industry.
The data is analyzed and converted to information in simple formats that you can turn into actions.
What can I expect to learn from competitive shops?
There are three key areas every business needs to understand:
1. How your customer service compares to your competitors
2. What your competitors are saying about your business
3. How your prices compare to your competition
Charlies Stiles says, “Many companies don’t even realize they are giving away up to 30% of their business to competitors simply by not meeting customer expectations. The data we gather through competitive shops makes it clear where improvement is needed.”
Mystery Shopper Services works as a partner to ensure you understand what consumers are demanding within your industry and how to create best practices.
Next, primary competitors are shopped. This information reveals where you may be falling short and where opportunities lie to gain a competitive advantage. Additionally, this information will help you guide your employees in meeting the guest’s expectations.
“What we often find is that once management is able to compare and contrast their business to direct competitors, it’s pretty easy to reclaim the revenue they’ve been unknowingly giving to competitors,” notes Charles Stiles.
Does pricing really influence consumer spending?
“Many big box stores and/or franchise businesses will regularly conduct competitive price audits to ensure their pricing is in line with the local market. Quite often this is done before ever breaking ground on a new location. This is how these companies ensure they stay ahead of the curve,” says Charles Stiles.
According to him, even smaller companies can head off price related business losses by regularly tracking the pricing strategies of competitors.
Mystery Shopper Services has the most robust price audit system in the industry. We enable you to collect pricing on hundreds or even thousands of SKUs seamlessly. We analyze your products and pricing real-time, so you’ll know how to price your products for a competitive advantage.
What industries should use competitive shops?
The value gathered from competitive shops is beneficial to virtually any industry, from standalone single locations to major chains.
Regardless of industry and whether you rely on brick-and-mortar locations, in-home representatives, or some other approach, competition shopping offers the quickest, least expensive way to understand competitor perceptions of your business and how they approach the same services you provide.
“Sometimes businesses get so focused on whether they are winning contracts or not, they fail to see how they are competing in the marketplace. Knowing what your competition is doing will increase your chances of winning more business,” according to Carl Phillips.
What types of competitive shops are available?
Competitive shops fall into four categories:
1. Comparison to competitors on service standards
2. Learning what competitors say about you
3. Price audits
4. Overall market studies
“Whether comparing hundreds of SKUs on price or how their service compares to yours, initiating competitive shops with unbiased shoppers creates extremely valuable insight into your unique competitive environment,” notes Carl Phillips.
What do service competitive shops look like?
Customer service is an important aspect of remaining competitive. You can learn a lot about how your customers want to be served through the shops. The benefits come from taking that information and training your staff to consistently not only meet those expectations but strive to exceed them.
“What we have found is that when a store provides poor service, it is not typically the fault of the sales staff but a lack of leadership and training,” says Carl Phillips.
Like when building a home, a contractor needs a set of blueprints to know exactly how you want your home built.
From a service perspective, employees need continuous coaching, training, and support from management. If they are not given a blueprint for how you want them to serve your customers, they will most likely serve your customers based on their perceptions rather than how you would like them to be served.
Charles Stiles says, “Shopping the service side of a business can be as detailed as you want. We recommend shopping your competitors with the exact same criteria and forms used for your locations. We also suggest not letting shoppers know they are doing a competitive shop to eliminate potential bias.”
The bottom line is that whatever is important to you should be compared side-by-side with your competitors. Afterward, you can analyze the data and compare each area of service, products, and/or pricing to determine what opportunities may exist for improvements or changes. It’s also advantageous to look at your competitors best practices. You may find some new ideas.
Common competitive shop parameters include the following:
• Sales representative friendliness and ease with customers
• Presentation of quotes and follow-up protocols
• A checklist of service standards
• Friction points with customers
• Website usability
Whether auditing prices or comparing customer service, Mystery Shopper Services customizes each program to ensure you are receiving the information you need to make actionable decisions.