1-Overview

Contents

1. Mystery Shopping?
2. Terminology
3. Ways To Go
4. Advantages
5. Disadvantages
6. Personal Requirements
7. Equipment Requirements
8. Financial Requirements
9. Part Time or Full Time?

1. Mystery Shopping?

The Mystery Shopping work means getting paid to shop, dine out, stay in hotels and resorts, fly across the world, take cruises, and get your everyday errands such as banking, auto services and more done for free - even better, you can get paid for it!

Why Mystery Shopping?

We live in a very competitive world - and businesses cannot afford to keep spending hundred of thousands of dollars every year to bring in new customers, only to have them leave in disgust due to poor customer service.

Employing a Mystery Shopping Company assists business owners to:

• Ensure employees are performing tasks in accordance with required procedures;
• Check on customer experience to make sure it is pleasing;
• Monitor for safety violations;
• Get a fresh outside perspective on their operation;
• Identify specific areas for improvement;
• Garner feedback on a new campaign or decorating idea;
• Detect theft;
• Get outside supporting evidence for solving a dispute within the company;
• Identify employees for credit, raises and promotions
• Determine how people of different appearances are treated to prevent discrimination;
• and much more!
  

The best way to get the input of a customer is to be one. Obviously, an owner, manager, or other inside employee cannot be his or her own customer because of recognition. Customer comment cards are quite ineffective - they will only gather the opinions of those who are on extreme ends of the continuum. You will either hear from those who are extremely satisfied or those who seem to enjoy spending their time making complaints. These people only comprise about 10% of customers. Studies show that for every one- customer complaint received, are 25 others that you did not hear about, but their circle of influence did.

WHAT IS MYSTERY SHOPPING

Have you ever had a bad customer service experience? Did you make a big deal of it and talk to the owners? Most don't.

Mystery Shopping Companies hire Independent Mystery Shoppers to work on an as-needed/on-call basis as independent contractors. These Independents are assigned to a particular Shop, and told what they are to observe while there. Mystery Shoppers visit a specific business location and pretend to be a typical, everyday customer. During their visit, Mystery Shoppers concentrate on details that they will later report in the customized evaluation (immediately upon exiting the location, while the information is still fresh in their mind). The Mystery Shoppers visit is unannounced so they can see things as they are in the everyday environment.

Mystery Shopping is not market research, although that may be one of the additional services a Mystery Shopping Company can provide. Businesses who contract with Mystery Shopping Companies can use the information obtained to make specific improvements where necessary, revise the training of staff, change product positioning and/or delivery, and maximize their quality of service.

There seems to be a large unmet need for Mystery Shopping Companies. Although Mystery Shopping Companies have been around for nearly 40 years, only about 10 percent of businesses are currently using this service, mainly because they don't know this type of company exists. Many of the large national businesses have been using this type of company for years, but there are still many businesses out there that are in serious need of Mystery Shopping services.

Imagine how many businesses could be helped if encouraged to employ Mystery Shopping Companies. More exciting, imagine the opportunities for you!

This up-and-coming business is already estimated to be a $500-million industry. In fact, Entrepreneur magazine lists Mystery Shopping as one of the Top Eighty Home-Based Businesses to start today.

ARE YOU CUT OUT FOR THIS BUSINESS?

If you expect to receive good service when you go shopping and you love to shop, you will probably be a good Mystery Shopper. To expect good service, you have to know what it is, and if you know what it is, you can usually communicate suggestions to improve unsatisfactory service. If you love to shop, then you won't mind traveling from business to business as a Mystery Shopper. Good Mystery Shoppers are honest, detail-oriented, fair, objective, and patient. They can report what they see accurately and without bias.

HOW MUCH CAN I EARN?
HOW MUCH DO I NEED TO START?

One of the advantages of a Mystery Shopping Business is that it can be started part-time and gradually be worked into a full-time organization. What you earn as an Independent Mystery Shopper or as an Mystery Shopping Company owner depends largely upon your own marketing, initiative and perseverance. Part-time Mystery Shopping Companies can make up to $40,000 or more a year; full time much more, with very little out-of-pocket money. The potential is unlimited! While you're building your business, save money and conduct most of your own mystery shops.

By conducting your own mystery shop evaluations, you can start making money immediately, from your first client! Start-up costs are extremely low, especially if you already have a computer, printer, and a fax machine (or fax program). With the mentioned equipment, you can start with almost nothing, and add on as you build your business.

BENEFITS OF THE BUSINESS?

By now, you should be getting an idea of the benefits of the Mystery Shopping Business.

1. Low start-up costs; you can begin with very little money.

2. Low operating costs.

3. Work from home. Increased time spent with family. No more fighting rush-hour traffic!

4. Start part-time, keeping your full-time job for insurance and security reasons until your business becomes large enough to provide a comfortable living.

5. If you choose to start full-time, you can begin realizing profits right away by performing your own Mystery Shop evaluations.

6. The base of clients to choose from is immense. Every business that deals in some sort of service or has a competitor (which is almost every business) can use an evaluation from a Mystery Shopper to determine how their business is run when they are not looking.

7. Get paid for shopping, eating, traveling. You stay in a client's hotel free and rate the service you received, plus get paid! You eat at a client's restaurant, rate the service, and eat for free. You get the oil changed in your car, rate the service, and receive the maintenance free. The perks are endless!

8. Significant tax savings are available to the home-based business owner in the form of deductions, credits, and depreciation allowances (refer to an accountant for details).

2. Terminology

It can be confusing when you are talking about the Mystery Shopping business, because of the many layers. One company may hire you on behalf of another company to perform shopping at an individual company or franchised shop and include the requirement that you observe the way people are shopping.

For the purposes of this manual,

Shop is an individual assignment to perform a Mystery Shopping evaluation on one particular Store. Also known as an Assignment.

Client is the one who is paying to have the Shops done.

Customer is somebody (other than the Mystery Shopper) who is frequenting the Store.

Store is the location that the Shop is to be performed in (although it could be an amusement park, brake service garage, etc rather than a retail store).

Independent Mystery Shopper is an individual who actually performs the Shop for a Mystery Shopping Company. Sometimes shortened to Independent.

Mystery Shopping Company contracts with the Client to get the Shops done in the Stores the Client wishes.

3. Ways To Go

There are three ways to work in the Mystery Shopping field.

First, you can be a company employee. Company A may employ their own Mystery Shoppers, and send them all around the country to their outlets to do the Shops. This will usually be a high-travel career, since you can't do the local outlet too many times or they'll catch on to you. You get this job like any other, by scanning the job banks, reading the classified ads, and the luck of knowing somebody at the firm. We won't be dealing with this option much in the Manual, although the technique used in the 'The Shop' section apply.

Second, you can set up your own Mystery Shopping Company. You are starting up a business, and you will be contracting with individual Clients to do their Stores. You may do them yourself (and probably will in the beginning) or assign them to the Independent Mystery Shoppers who've signed up with you and who are available.

Third, you can become an Independent Mystery Shopper. You apply to as many Mystery Shopping Companies as you can handle, and are then given Shop assignments to complete. You are acting as an Independent Contractor (so no benefits) and each Mystery Shopping Company will have their own set procedures, rules and reporting requirements.

If you have no interest in setting up your own Mystery Shopping Company, you can skip the next few sections that deal with the business side of things and go directly to the 'The Shop' section. A list of over 250 Mystery Shopping Companies you can apply to is given in the Directory.

4. Advantages

This is the perfect business for the "shopaholic." You get to indulge your passion for the retail experience, your love of eating out, the fun of discovering new places. Now you can get paid for it!

There are other advantages as well:

Mobility

Sense of Intrigue

Flexibility

Mental Challenge

Independence

Income

You can in fact get rich being a Mystery Shopping Company, though it is definitely NOT a get-rich-quick type of business. Your income will depend on your marketing and the number of Shops you and your Independent Shoppers can complete for the Client.

Freebies

Adventure

You can of course also have all the trappings of wealth that tend to be status symbols among those who are impressed by such things. You can have the Jaguar or Rolls, the Rolex watch, the hand tailored clothes. Personally, those things mean nothing to me, but there is no doubt that having them would impress some.

5. Disadvantages

Shopping

Conscience

I certainly cannot tell you what is right or wrong for you. I'd just point out that in almost all cases, you really are a customer as well as a Mystery Shopper, since you will need to purchase something while in the Store. Secondly, your intent is not to 'catch somebody doing something wrong' - in fact, get rid of that idea right from the start - but to just be an impartial observer. You are just as strongly encouraged to report the positive as the negative. Your positive report about how a particular employee was going 'above the all of duty' may very well earn that employee a promotion, raise or at least recognition.

Low rate of pay

This is not necessarily a low rate of pay. In most cases, a Shop can be done in 10 minutes or so. If you get $20 for the shop, that's $120 per hour! Of course, there is transit time to and from the store, time spent completing the report, etc, but even if you figure half the amount, $60 per hour is not bad!

If you are going to be an Independent Mystery Shopper, your income all boils down to numbers. If you are going to make $15 a Shop, and you need to earn 150 dollars per day then you'll need 10 Shops a day. Most Mystery Shopping Companies won't have anywhere near that volume for you to do, so you sign up with many Mystery Shopping Companies - they represent different Clients, and together you may be able to get more than work than you can handle.

If you are a Mystery Shopping Company yourself, then you will generally get double what the Independent Mystery Shopper would get - although this will depend on your negotiation skills. In some cases or if you aren't the best negotiator, the amount you get will be a much smaller percentage over what the Independent would make. In either case, if you then do the Shop yourself, you can pocket the extra money. If you assign it to an Independent Mystery Shopper, then you will pay them your agreed Shop fee and you get to keep the rest.

Lets say a Client will pay $40 for a particular shop. Would you rather have one $20 check earned during a 15 minute period where you do all the work, or ten $10 checks earned in that same 15 minutes by 10 other people doing the work?

Location

6. Personal Requirements

Observation

You are being paid to be an observer. Most of us aren't very good at this. Think of the Sherlock Holmes character, who could guess a person's occupation by the type of grit under their fingernail. You'll need to develop a very keen sense of observation.

Organization

You may be working for dozens of clients, each with any number of things that have to be done a particular way. Each task has a time frame for completion, and each has its own requirements. You have to have some way of keeping track of these details.

Fortunately, organized does not necessarily mean neat. I don't care a smidgen about how your office looks. Your contact with clients will almost invariably be at their place of business or their home. They won't see how neat or messy you are. But you must have a system of organization.

Dependability

The tasks your clients entrust you with have one primary requirement - they must be done as directed, on time, without any excuses. If it takes working all night, if it takes effort far above what you thought it would, you must make sure it is done. Your reputation as an Mystery Shopper depends on it, and a good part of your marketing will depend on your reputation.

Confidentiality

Some of the things you are going to do for clients are of a sensitive nature. You may be asked to find out information that can cause great embarrassment or financial harm if it is leaked to the wrong people. You may be asked not to shop a Client's own Store, but that of the competition. The competition of course would love to know what you are being commissioned for, and what you report.

You won't last long in this business if you get a reputation for being a blabbermouth. Maybe you can work as a gossip columnist instead? Or do your 'information' gathering for the tabloids?

Sense of Timing

If your client says that they need the information by 2 PM on Friday, getting it to them at 2:15 is unacceptable. It doesn't matter that the traffic was bad, or that you had car trouble, or whatever. Those are excuses. Your client may say they understand, but all they will remember is that you were late.

With experience, you'll learn how long it takes you to do each task. You'll be constantly looking for ways you can streamline things, to get your tasks done more quickly and more efficiently. As you do this, be very careful about tightening your times. Don't promise your client and be late.

Something can always come up to throw things off track, and the more cushions you can build in the more likely you are to build a reputation for dependability.

Sales Focus

If you are going to be an Independent Mystery Shopper, sales means simply getting the assignments, which means you want to sign up with every Mystery Shopping Company you can find. For Mystery Shopping Companies, you'll want to carefully read our section on Marketing.

Drive

Don't expect to get rich right away. While there is good money to be made in this business, it will take time to get off the ground and your clientele built up. Time to get some income coming in, and longer to make the whole thing create any substantial income.

As Executive Director of the Olympic Home Based Business Association, I have seen the same pattern in many people who start their own business. When they start, they are happy, excited, eager. They tell everybody about their business, pass around business cards like crazy, and are full of optimism. As the months go by, they get more and more subdued and quiet. Usually about the six month point, they are downright discouraged. Their bills are bigger than their income. They are beginning to think that starting their own business is the stupidest thing they could do.

Some bail out. Those that do persevere though generally find that things start turning around for them. But you will need the drive to keep going when everything looks black. Remember, the only way to fail in business is to quit. Many entrepreneurs even go bankrupt and otherwise fail at their business not once, not twice, but several times before they finally become successful. The key is that they never quit.

Press On. Nothing in the World Can Take The Place of Persistence.
Talent Will Not;
Nothing Is More Common Than Unsuccessful Men With Talent.
Genius Will Not;
Unrewarded Genius Is Almost A Proverb.
Education, Will Not;
The World Is Full Of Educated Derelicts.
Persistence and Determination Alone Are Omnipotent.
      -Calvin Coolidge

If you have that drive, or have somebody who will be your coach and "prodder," then there is no reason why you won't succeed.

7. Equipment Requirements

There are certain items that make mystery shopping a lot easier. None of these are *required* although you'll find they can make you much more efficient.If you purchase equipment for your mystery shopping business, it is tax deductible!

• Computer with internet access, preferably high-speed
• Printer - to print out the evaluation forms with companies who do not have online submission sites and to make backup copies of online submissions
• Fax Machine - Many companies will want to fax you the Shop requirements, and some require you to fax your receipts to them upon completion of the shop. If you do not have one, there are many companies who will allow you to fax items for a fee, such as your local library, an office supply store or a copy store (such as Kinko's).

  An alternative is to use one of the online fax services,such as J2.com or efax.com - these offer the advantages of avoiding the expense of a fax machine, not having to tie up a phone line, and of being able to get your faxes anywhere you can get your email. If you are going to be using the service for sending, it's not free but certainly less expensive than Kinko's. You will need a scanner to feed in any documents such as receipts - get a flatbed one or you'll have to tape the little receipt on a regular size sheet of paper to feed it through a sheet-fed style.

• Copy Machine - for making copies of your receipts if you need to send them in. You should never mail an original receipt unless you have a legible copy. If the original gets lost in the mail and you don't have a copy, you don't get paid.
• Answering Machine or Voice Mail - to catch your missed calls. There are still a lot of schedulers who prefer to call to recruit their shoppers, and if you don't have a machine, chances are that they won't call again regarding that specific assignment. If you have a machine, they can leave a message and you can call them back.
• Thesaurus - to spice up your reports! You don't want to call every place 'nice' and every salesperson 'friendly'
• Personal Tape Recorder - to assist you in providing accurate information. Make sure that you review the laws in your state, as some states prohibit the use of recorders when all parties are not aware they are being taped. Many shoppers use these to take notes on in the bathroom during their shop. I personally do not use one, but many shoppers find it extremely useful.
• Cell phone - again, like the personal recorder, many shoppers use it to take notes with. Most cell phones offer a "memo" feature where you can record short memos. Another option if you have an answering machine at home is to call home and leave your notes on the machine.
• Calendar - for scheduling in all of your Shops. Oftentimes you'll have several shops to do in a day, and these might be assigned weeks in advance. You can't afford to get the reputation of someone who forgets to do a Shop.
• PDA - another great alternative to trying to remember things - both Shops and people's names are two categories. Many people now use their PDA's for keeping all sorts of notes, and so it isn't unusual to see people checking their shopping lists on one in the store. That means you won't attract too much attention as you quickly jot down a name.
• Bookkeeping software - this is not necessary, but you should have something to keep track of your assignments.
• Contact management software - something to keep track of your contacts, of course! More than just an address book though, this type software reminds you to get in touch with someone on a scheduled basis.
  

8. Financial Requirements

You will need some money. Not a lot, but there are of course some expenses involved in starting any kind of business.

Permitting Expense

You will need to get a business license. Typically, that will be a state or provincial license. You may also need a local city or county license. As an Independent Mystery Shopper, it may not technically be required, but you have to be in business if you are going to take business deductions.

Marketing Expense It takes money to print up business cards, to make flyers, even for the postage to send your application to those Mystery Shopping Companies which lack an online form. Plan on putting at least $100 per month into your marketing budget - more if you can afford it.

Insurance
At some point you'll want to think about insurance. The old saying is true - anybody can sue anybody for any reason. You don't want to be spending time in court that you should be spending on your business, and you don't want a huge lawsuit award to wipe you out.

The main insurance you'll need is general business liability. This is to protect you against lawsuits that arise from performance in your business.

You'll also want to amend your auto insurance - it probably says "not for business use" now, which means they won't cover you in an accident if they find out your trip was for business.

You should consider also amending your homeowner's or renter's insurance. While you may or may not have business visitors to your home office (in which case if they slip and fall or are otherwise hurt you are covered), you will want theft and fire coverage for your office and its equipment.

Of course, you'll also want to protect your most important asset - you! As a self-employed person, you are not generally eligible for government or corporate health insurance benefits. You'll want your own health insurance (including dental and optical), life insurance and insurance to cover your family.

Umbrella policies may save you quite a bit of money. Depending on how broad the "umbrella" is, one policy may cover most or all of your insurance needs. That is usually quite cheaper than the total cost of many individual one-purpose policies.

Another cost-saving tip is to shop the insurance around vigorously. You will find widely varying rates from different insurers - even different offices of the same insurer. Most offices are independently owned and operated, and how they rate and write up the policies will vary from one to another. One group that helps self-employed people with health and other insurance is the National Association of the Self Employed. How to contact them is included in the resources section of this manual.

Another type of insurance that you might want to investigate is a pre-paid legal plan. Under these plans, you pay a monthly or quarterly premium. In return, you have access to legal assistance for no additional charge for many legal needs, and at greatly reduced rates for others.

9. Part Time or Full Time?

Can you do this business part-time?

For Independent Mystery Shoppers, almost certainly you will be doing this part-time. It takes quite a while to build up enough assignments for it to become a full-time business.

For Mystery Shopping Companies, maybe. There are many reasons why I encourage you to go full-time. Still many will not be ready to make that big step. It is possible to do the business part-time IF your potential clients will be comfortable with the hours that you can put in. If your client wants to consult with you during office hours, you are going to have to be available during office hours. On the other hand, much of the research can be done at your leisure, from your home computer in your pajamas/

Still, you should consider full time, for the following reasons:

Income

If you can't put full-time effort into it, you are not likely to make very much money. Let's assume you get $40 an hour. If you only put in 3 hours a day, you'll only be making $120 per day. An eight hour day however can get you $320. The danger is that if you are part-time, you'll look at how much you are making and think that the business doesn't make much money, so you don't dare quit your other job. What is holding the income down is not the business, but the hours you put into it.

Commitment

It's very easy to "play" at being self employed. You can get a business license very easily, and send out a few flyers or put your card on a few bulletin boards. It's also easy to quit a part-time business. Remember what we said before about drive and perserverence? You're likely to put a lot more effort and commitment into the business if you are depending on it to pay your bills and put food on the table.

Marketing

You will find it harder to get good long-term customers if it's clear this is a part-time thing. Your customers are naturally going to be worried that if they start depending on you, that you'll be around to do it a month from now, two months from now, a year from now. Your lack of full-time commitment will hurt your marketing.

Serendipity

This may sound metaphysical, and I suppose it is. But there is a truth in business that many have discovered. Once you commit to something wholeheartedly, mysterious things start to happen.

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This may sound too simple, but is great in consequence. Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, the providence moves too. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents, meetings and material assistance, which no man could have dreamt would have come his way. I learned a deep respect for one of Goethe's couplets:

Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it!"

W. H. Murray in The Scottish Himalaya Expedition, 1951

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