Every business has competitors of one sort or another, and in many industries, it’s crucial to know what your competition is offering their customers. The good news is you can often find out what your competition is up to, and this is where mystery shoppers come into play.

A mystery shopper is a person who is hired to visit and shop your competitors for the purposes of sharing information about their experience. Mystery shopping is one way to collect input so you can complete a Competitive Analysis – a report on who your competitors are and what they are doing. This report should be part of your marketing plan and will help you spend your marketing dollars wisely.

Let’s say you own a fabric store, and you want to know what other stores in your area are doing. You can make a list of the four or five fabric stores in the three zip codes around you. You would then provide that list to your mystery shopper, who would visit each of the stores. You might also provide your mystery shopper with a list of questions or a checklist of things to observe and/or purchase. The mystery shopper will take detailed notes about their experiences at each place and report their findings back to you.

From your mystery shopper’s notes, you can find out many things:

• How does their storefront look? What is their curb appeal?

• Was it easy to find parking or was it congested?

• What are their opening hours and do they open on time? Are there people waiting to get into the store at opening time? Or do you need an appointment or reservation to use their services?

• Did employees provide a greeting when entering the business? How friendly or approachable are the employees?

• How does the store look? Is it crammed full with items or sparse?

• What kind of displays do they have and how attractive are they?

• Is their inventory broad or deep or both? What type of items and brands do they carry compared to our store? Are there brands, items, or product lines I should be carrying that they do that I don’t?

• If a service firm, what does their waiting area look like? What do their service areas look like?

• Were there a lot of customers in the store? How long are the checkout lines?

• How clean is the store? Do you feel comfortable with the level of cleanliness?

• Taking a sample of items and checking price, how do my prices compare with theirs?

• What was the purchase experience like? Were you offered an upsell or a coupon? What does the checkout area look like? Were customers offered a bag for the items?

• What was it like to return an item? How strict is the return policy, and was the service friendly or hesitant?

• Was there follow-up, such as with email promotions or a thank-you note?

You can also find quite a bit online to supplement your competitor research, but the focus here is on the face-to-face experience.

Mystery shopping is not just for retail; you can use it for professional and personal services, health care, some real estate services, restaurants, trades, and nonprofits. You can also adapt the idea to other industries, such as construction and manufacturing.

Once you have compiled the information on your competitors, you can look for ideas to improve your business that are in line with your own business brand and culture. These improvements are often in the area of customer service, but can also include adding inventory, changing hours, adding store features or events, and more. You may even be able to find ideas to implement at a lower cost than your competitors, giving you an edge on profits.

Where do you find a mystery shopper? You can hire individuals or a company that specializes in providing mystery shoppers. Many people consider a friend for this role to save money, but we don’t recommend it unless they are trained observers with significant customer service experience. You’ll need a budget to pay the shoppers for their time as well as what they will be purchasing on your behalf.

Hiring mystery shoppers provides easy access to your competition and is very often well worth the time and money spent.