PAMELA MONTPELIER
‘A good edge’

Integrating a “mystery shopper” into a bank’s customer queue is increasingly being used as a way for banks to gauge customer service performance levels without the bank employee knowing they are being watched and graded.

Mystery shopping is common in the retail and fast-food industries. A fake shopper is hired to enter the store and take inventory of the responsiveness and attitudes of sales associates, corporate culture, cleanliness and organization of the store, and judge the ease and flexibility in the overall shopping experience. The goal is to identify areas of strength and areas that need improvement to ensure overall customer satisfaction, help define corporate culture and gain a competitive advantage in the marketplace.

Although not widely discussed, mystery shopping programs are also becoming prevalent in the Bay State banking industry.

“Banks secretly shop themselves and, sometimes, their competitors. It’s an accepted retail principle and banks are in the retail business, so there is a lot banks can learn. Chief among them is the level of customer service,” said Bruce Spitzer, director of communications at the Massachusetts Bankers Association. “It’s quite prevalent in the industry, and in the end it benefits customers because it services customers.”

In one example, a “shopper” is given money to open a checking account. The customer secretly takes notes on the friendliness and knowledge of the customer service representative and reports the findings to bank executives. Those findings are then shared with bank staff and management.

At larger banks like Citizens Bank of Massachusetts, the mystery shop program is done to better understand what the customer wants and needs from their bank.

“The shop program that we’ve instituted is our way of understanding what the customer experience is when they are in the branches,” said Maria Todesco, executive vice president and director of retail banking at Citizens Bank. “It is an opportunity for us to get consistency and quality control around the customer experience and it’s a wonderful development tool for assisting our folks to be the best they can be. It allows the branches to see what they look like from a customer’s perspective.”

The project is relatively new to Citizens, as the bank is just entering its second year of mystery shopping, but Tedesco said the results have helped shape management technique and coaching tools for other employees.

“This is a way to identify behaviors that are controlled by the branch. This is not a negative experience for the branch folks and it’s positioned and used to improve their talents and skills,” said Tedesco.

Defining and maintaining a good rapport with customers is essential to bank survival, said one banking executive. Regardless of the bank size, the mystery shop program is a good way to identify whether employees are following bank service policies.

“We like to say ‘welcome to Strata Bank’ and we wanted to make sure our customers are hearing that,” said Pamela Montpelier, president and chief executive officer of $300 million-asset Medway-based Strata Bank, which recently instituted a mystery shop program at the bank. “Did the banker talk to you about the home equity loan you came in for, and also remind you about a checking account? How easy is it to open an account? I always want to make sure we aren’t transferring the calls from person to person … if someone calls and transfers the customers three or four times, that employee doesn’t own the customer. You use [a mystery shopper] as a tool to do better … deep down, everyone wants to win,” she said.

Montpelier said that the employees do not know the mystery shopper standing in front of them or talking to them on the phone is different from any other customer.

A Little Surprise

Cambridge Savings Bank President Kevin Fitzgerald, who has used a mystery shop program since 1998, said customers have seen a change in the overall bank atmosphere at his bank since a mystery shop programs were put in place.

“One of the things we always felt is that we had good service, but it was inward-looking and we felt that if we were going to grow and have a consistent level of service with our customers we had to improve the service,” said Fitzgerald. “I think the customers have seen the improvement and [it’s noted on] customer comment cards, calls to customer service reps, and the like. Our service has improved substantially since we’ve started the program, and we continue to shop all aspects of our service from call centers, to tellers, branches, faxes, and email communication … on an anonymous basis.”

Both Strata and Cambridge Savings use Andover-based ath Power Consulting Corp., a $3 million consulting firm that provides strategic cultural direction for service-based companies through research, planning and training systems, for their mystery shop programs. According to ath Power executives, the service helps develop corporate culture initiatives by analyzing the environment customers experience while banking.

The mystery shops are conducted on an ongoing basis. Each branch, as well as other departments throughout the bank, are “shopped” at least once a month by a fake customer and results are tabulated and reported on a quarterly basis.

As part of a larger “customer focus” program, the results are used to evaluate the customer service performance of frontline tellers and customer service representatives, as well as bank mortgage, small business, and customer service call center areas. In addition, the shops are used to identify holes or gaps in a bank’s overall service plan.

“The shop program creates a corporate culture and, to me, that is the lion’s share of why you would do a program like this … it creates a great amount of internal communication,” said Frank Aloi, president of ath Power. “What happens inside the bank [after the analysis] is much better coaching and general management practices. Realistically, the day-to-day supervisors are really the people who make or break corporate culture initiatives, so if they understand why the program is the place, it makes the bank work.”

Aloi said the mystery shop program is customized for each different bank, depending on the goals the bank sets. “If the goal is to open X more checking accounts this year, your shop program should be focused on achieving that goal,” he said.

Banks use the mystery shop program when they want to increase the consistency of service provision and in the way banks actually sell to a customer, but Aloi maintains that mystery shop scores are not the “end all and be all.”

“It just provides consistency,” Aloi said.

Aloi said the shops are also used to identify employees who meet the current benchmark requirements of a shop. Employees who score a perfect 100 percent when providing services to a mystery shopper are rewarded with a gift basket and recognized at their branch by management for their customer service savvy and attitude.

“This is a nice surprise for the employee, as they generally have no idea they have been ‘shopped,'” said Aloi.

While there are disadvantages to the mystery shop program, bankers say the advantages of better understanding the customer outweighs the shortcomings of the overall program by building a better team who better understands the customer.

“There are different types of customers, those that complain loudly and those that are silent and walk out the door frustrated. Unless you have a good handle on the customer community, it’s definitely a good edge to have the [mystery shop program]. But the downside of mystery shopping is that if you don’t do it properly it would be bad for employee morale,” said Montpelier. “We use it as an opportunity to help employees do their jobs. The most important thing for the company is that it helps you view values and build culture. You pick specific standards that are important to you. It’s the unconscious first impression that can really make a difference.”