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Mystery Shopping vs. Direct Customer Feedback: Which Is Right for Your Bank?

August 1st, 2019
Mystery Shopping vs. Direct Customer Feedback: Which Is Right for Your Bank?

If you’ve recognized that your financial institution needs a reliable way to gauge customer satisfaction, you’re probably on a deep dive to gather information on how you can do just that.

There are a variety of ways to gain a view of what your customers experience. Let’s look at two particularly common methods of gauging customer satisfaction: mystery shopping and direct customer feedback. We’ve put together some information on the pros and cons of each, so that you can be better informed when deciding what kind of customer service survey or program is best for your bank. 

Mystery Shopping

Mystery shopping (also known as “secret shopping” or “shadow shopping”) allows businesses to collect feedback on the components of their employee interactions with customers. Mystery shoppers are typically employed by a third-party company and can be conducted in-person or over the phone. If you want to evaluate whether a customer’s name is used by your tellers, for example, your mystery shoppers might be instructed to visit the branch and then report back on their experiences. 

One benefit of this approach is that your mystery shoppers can confirm that detailed training was carried out. If you have an inkling that something may be going wrong in regards to compliance, for example, you can utilize mystery shoppers who can specifically report on the receipt of a disclosure brochure. If you want to ensure a CD special is mentioned, a telephone mystery shop is a perfect vehicle to test protocol.

The Downside

Mystery shopping may be more accurate at measuring concrete employee behaviors, such as whether or not an employee uses the customer’s name, stands to greet the customer, or smiles. But this method falls short when it comes to soft skills like likelihood to recommend, overall satisfaction, and likelihood to repurchase. And those soft skills are what drives customer loyalty and revenue.  

Here’s another pitfall: the number of mystery shops that banks can collect will never approach statistical relevance, and therefore the mystery shop is more of a “one-off”—it doesn’t represent reality reliably. If your aim is to confirm customers are more motivated to refer your bank after an encounter in one of your branches, the mystery shop doesn’t answer your question.    

Price is another key element that may knock mystery shopping out of the running. The costs of a mystery shopping program vary depending on factors like the complexity of the desired actions, requirements for shoppers, and any reimbursements needed. Ultimately, there is no inherent, clear cost justification for this form of research. 

Additionally, mystery shoppers are often easily identified, leading to employee responses that are not normal and not natural. As a result, data becomes inaccurate. Employees are tipped off to out-perform as a certain account is accessed, or an individual wearing red glasses enters, or any number of other identifying situations. In contrast, utilizing direct customer feedback means that every customer has the potential to be asked about his or her experience. 

Direct Customer Feedback

Direct customer feedback originated from a desire to worry less about whether something was being done and focus on how the action impacted the customer. This approach helps financial institutions understand exactly what is important to the customer. Feedback is typically aggregated, combining customer comments after key touchpoints and feedback speaking to their overall experience. A good program contains focused outreach to both high-value customers who have been with a bank for years and first-time millennial customers who have just opened an account.  

The most resounding benefit of direct customer feedback is the clear return on investment that comes from listening to some of your customers each and every day. Returns are measured in attrition catches and opportunities to expand your relationship with current customers—not to mention decision-making based on your customer’s voice. After all, there is significantly more power in paying attention to your customer’s voice than there is in following a consultant’s voice.

From a staff management perspective, direct customer feedback triumphs over mystery shopping in that employees can’t argue with the customer’s feelings like they can with a third-party evaluation.    

Another benefit is the wide variety of available methods for collecting feedback, some of which are very cost-efficient, allowing your bank to reach statistical relevance quickly. While mystery shopping typically relies on written reports from shoppers, customers can be surveyed directly over the phone, through email, and even through social media. At Avannis, we make it simple to customize your survey questions or utilize our ready-made questionnaires to collect the most valuable feedback from your customers. As your business and research needs evolve, we can also leave room for flex questions that will address new trends and sales objectives. 

Potential Pitfalls

Like any method of customer loyalty measurement, direct feedback can be as helpful as you make it. Some banks make the mistake of gathering the data and never using it. Possibly, the bank isn’t quite sure what to ask, and the research uncovered doesn’t prove to be actionable. 

Another significant consequence of direct feedback is that it requires an increased level of accountability on your part. When your customers take the time to provide feedback, they expect you to take their thoughts into account. If a customer tells you that you need to have more pens in your lobby, for example, he or she is going to look for those pens on a subsequent visit to see whether or not you’ve listened to them. Best in class banks are born when financial institutions actually deliver on that feedback. 

Other pitfalls include attempting to run studies independently, and, without intending to, oversampling your customer base.

Measure Satisfaction and Improve Loyalty with Avannis

When it comes to understanding how to deliver superior service in the eyes of your customer, Avannis is the right partner. We offer every method to gather customer experience under one umbrella of unified reporting, with no contracts. We’ll not only collect the data; we’ll show you what to do with it. 

We make it a point to offer our expertise and guidance every step of the way, from collecting relevant data to providing industry benchmarks. Our closed loop feedback utilities allow you to take full advantage of that valuable customer feedback, helping you identify sales opportunities, retention risks, and action items. Give us a call today to learn more about how we can guide your financial institution to a better customer experience.