Industry Case Studies
Restaurant
Client uses Mystery Shopping to Motivate Staff & Increase Profits
By the summer of 1998, this SQM restaurant client owned and franchised
more than 100 full-service casual dining restaurants across Canada.
Similar to any company attempting to grow in a supersaturated business
environment, the client faced the challenge of capturing market
share from its competitors.
A number of strategies were set into motion to attain this goal
- one being the maximization of the customer experience through
superior customer service. To accomplish this objective, the client
sourced a Mystery Shopping and Customer Service Solutions supplier
that could measure the present customer experience and set benchmarks
for a future improvement process.
In September of 1998, the client contracted Sensors Quality Management
Inc. (SQM) to provide these services. SQM worked closely with the client's top
management to create a Mystery Shopping Program that
was customized to their specific requirements and goals. It was
important to have a program that was scalable and that could be
easily modified to match the evolving needs of the client.
Identifying Missed Profit Opportunities:
As the Mystery Shopping Program began to generate feedback, the
client used the information to monitor customer service at the frontline
level. Evaluation criteria were based on the client's customer service
training initiatives and the company's policies and procedures.
This information gave restaurant managers a coaching and mentoring
tool and allowed the client head office to benchmark the results
for future performance goals.
It was evident that up-selling and suggestive selling behaviours
were not being consistently executed by frontline staff, which resulted
in hundreds of thousands of dollars in missed profit opportunities.
The question then became: "How do we communicate the importance
of this to franchisees, managers and frontline staff?"
The next step was to implement a "Profit Building" program
component that would impact up-selling and suggestive selling activities,
thus increasing sales and profits.
Motivating Franchisees, Managers, and Frontline Staff
SQM created a Profit Building tool that demonstrated missed profit
opportunities at each restaurant location. The first step was to
define the key behaviours that had a direct impact on profitability
(i.e. up-selling and suggestive selling). Mystery Shopping was then
used to obtain the numerical basis for these calculations.
Accurate assumptions were made regarding customer traffic and the
average purchase per transaction. As a result, the client could
calculate total estimated missed profit opportunities at each location,
in each region and across the entire client network. This information
was continually updated to show up-to-date figures.
The Profit Building tool became an instant success with client
head office, franchisees and managers. Now the challenge became
getting frontline staff on board. Since the Mystery Shopping Program
primarily evaluated employees that rely on customer tips as a source
of income, an additional element was added to demonstrate lost tip
opportunities associated with missed profit building behaviors (see
Exhibit 1).

*sample analysis report
Trackable Results and Immediate Impact
The impact was large and immediate. The client found that presenting
franchisees, mangers and frontline staff with "black and white
evidence" to demonstrate real dollar values increased their
buy-in to the Mystery Shopping Program and to new client customer
service initiatives.
Increased Sales and Profitability
Between 1998 and 2001 (the period during which the client initiated
its Mystery Shopping Program with SQM), the client has grown its
network by over 33% and now has over 180 franchisees across Canada,
the United States and Mexico. As a result: sales increased by 67%.
The President understood that the chain's phenomenal growth reaffirms
its position as the number one casual dining restaurant in Canada.
The Financial Post and Arthur Andersen LLP and CIBC named the client
one of Canada's 50 Best Managed Companies for three consecutive
terms.
Maintaining Desired Frontline Behaviours
SQM's Profit Building tool allowed the client to demonstrate trackable,
positive results to head office, franchisees, restaurant managers
and frontline staff. Now the challenge became maintaining the frontline
behaviours and management systems that support this success.
SQM's results-based collaboration with the client has led to a
110% increase in its Mystery Shopping and Customer Feedback budget.
As of December 2002, the client has committed to continue the SQM
relationship into 2003, which will include expansion into the United
States, Mexico and China.
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