Getting a chief executive to operate a till or make tea for staff might seem like a bit of fun, but having senior management experience their own brands on the frontline is a serious business strategy.
This mystery shopping approach has been made famous by Channel 4 TV series Undercover Boss. Senior executives spend two weeks working with frontline staff, doing everything from making burgers to stacking shelves, often finding out startling facts about their own companies.
Going undercover on the Channel 4 show made Vanessa Gold, the deputy managing director of Ann Summers, realise how much her staff knew about what the shop sells. After spending time on the shopfloor serving customers, Gold recognised just how valuable her staff members were.
She explains: “You can pay a lot of money for customer insight and we had it relatively free, on our doorstep.”
Apart from potentially saving costs on research, the time spent in store enabled Gold to understand how shop staff can feed into what the brand does at the top level. She says: “There is a very close relationship between our store teams and our customers. But we were failing to tap into what our teams know and using that information in some of our decision-making.” (See Q&A, below)
Using staff knowledge is also something that Brian Scudamore, chief executive of Vancouver-based waste disposal firm 1-800-Got-Junk, says he will do more of, having appeared on the Canadian version of Undercover Boss last month.
He explains: “One opportunity we saw was the potential to grow this business outside of urban centres. I realised that the small towns have junk too.
“One of the franchisees I visited was in a very rural market and he was driving up to 700km a day to pick up rubbish from houses, but he still found a way to make that model work.”
Scudamore also identified the company’s star performers during the show. Big rewards have been handed out to help keep hard-working staff motivated, with one truck team member being rewarded with a flight to Las Vegas for the company’s annual conference and entry into a poker tournament.
If you are not out there on the shopfloor, you can’t understand the customers
“He loves to play poker and had never been on a plane,” says Scudamore. “It is about taking the learnings from the show and recognising people who go above and beyond.”
Nikki King, who also appeared on Undercover Boss, has introduced management training for staff at Isuzu Truck UK as a result (see Case Study, below).
Identifying people for promotion is something that Martyn Birks, marketing director at discounter Poundworld, says he will do following his appearance on the Channel 4 show.
After gaining an understanding of what it is like for shop staff to work for the company, Birks introduced a programme to refurbish staff break rooms and canteens. He adds that he now spends more time meeting shoppers. “If you are not out there on the shopfloor, you can’t understand the customers,” he says.
The company has also changed its policy of docking wages when tills at its 170 shops do not balance up and when staff members are late.
But going back to the floor does not always have to be done in secret or undercover to reap benefits. Travel company TUI’s senior staff visit shops throughout the year, and the business now runs an annual scheme where 200 managers work in a Thomson or First Choice shop on the third Saturday in January, which is traditionally the busiest day of the year.
The benefits of doing this include getting direct feedback from customers and staff, and discovering why customers might go into a store rather than booking online, explains Nick Longman, distribution director at TUI.
This year’s back-to-the-floor day was Longman’s fifth, and he was struck by how hard the staff work to sell holidays in the economic downturn and the fact that they need as much information about the destination as possible.
“What really hit home to me was if we are going to sell holidays, we need to know a lot about those holidays; we really need our people to be experts in the products that we sell.”
As a result of this insight, TUI will increase the number of overseas familiarisation trips it sends staff on this year.
This year’s back-to-the-floor day has also shown how much customers want to interact with a person rather than a website. Longman makes sure he talks to the retail director once he’s back at head office to make sure the time spent in the travel agent isn’t wasted.
He says: “It’s all well and good everyone going back to have a nice chat with staff but unless it leads to action, you have lost part of the benefit of doing it.”
After all, it is customers who have the money to make brands grow and, as 1-800-Got-Junk’s Scudamore points out, it can be easy to forget the value of mystery shopping. “Sometimes you get caught in building a business and forget just why you are doing this. There are about 100 people in my head office, all working and busy, and it is easy to forget why we are here.
“I recommend other chief executives do it as a form of connecting with the reason they are in business.”
Vanessa Gold, deputy managing director, Ann Summers
Marketing Week (MW): Why did you go on Channel 4’s Undercover Boss? Did you want to learn more about the business or were there publicity reasons too?
Vanessa Gold (VG): I’m not going to deny that having an hour’s show on our brand on Channel 4 wasn’t a pull, but you really have to want to do it for business reasons as well.
I went on the show with my agenda of what I wanted to find out – things that you don’t necessarily get feedback on when you use a mystery shopper.
Mystery shopping looks at whether people are being greeted when they go in, for example, but it doesn’t get under the skin of what people truly think about the business.
MW: What did going undercover reveal?
VG: I visit many of our shops and they tell me what they think and what could change. But this was truly an opportunity to get to know the teams and customers.
The first thing I found was that we were not being sexy enough. The customers and staff were saying that we’d lost our mojo – that other brands were catching us up on the high street. They told me that we used to be daring, but we’re not any more.
It was great to be able to go back to head office and say: “We’ve got permission, from stores and from customers, to be sexy in the way we talk to our customer, plan our windows and in our product.”
I also found that our staff didn’t feel part of the family. Technology meant they were being emailed rather than called. It really made us think about how we can communicate with our teams in a way that they really feel part of a family.
MW: Have you changed your management style as a result of going undercover?
VG: Yes, without question. I have learned to be very honest and straight talking. I take a straightforward approach and encourage my senior team and staff colleagues to be open and honest with me.
The stores now have a dedicated email address for me, they can call me whenever they want and that communication has been fantastic. I love to have that sort of feedback.
MW: Has it changed your view of customer insight?
VG: It gave us the strength and courage to say that at a time when most businesses should be reining in costs, this is a time to invest in market or customer research.
We have invested in research to find out from consumers how they want us to talk to them. One insight was that our lingerie photography was seen as being for men, not women. This then fed into our “real women” campaign and we shouldn’t be surprised that our customers voted for voluptuous, curvy Lucy to front the brand.
Nikki King, managing director, Isuzu Truck UK
Nikki King spent two weeks working in Isuzu dealerships as part of the Channel 4 series Undercover Boss. The chief executive of Isuzu Truck UK admits that part of the reason for appearing on the programme was to make the company better known, but also that she wanted to check whether its mantra of caring for customers was working.
“Our whole ethos is about customer service, so I wanted to make sure we had got this customer care ethos throughout the business.”
King spends much of her time visiting dealerships and is well known in the business, so had to choose new branches where she hadn’t yet been and postpone the induction she normally gives.
She is known for running her firm as a family. Children can come to work with a parent if they are slightly unwell and off school, and King’s dog comes to the office. Going undercover reinforced the fact that this approach was right for the company.
By focusing on women in a male-dominated industry, many of her managers are female, which has benefited Isuzu Truck UK because it has had a staff turnover of just 2% in the past 16 years.
She was generally happy with what she found in terms of the service provided and found that a big benefit was seeing the potential staff had.
“We had never done any formal management training, our people are home grown. I committed to starting the Isuzu academy as a result of seeing women with huge potential, but who had never really been trained.”
King says going back to the floor as part of mystery shopping would benefit many firms, but managers must be committed to it.
“Most bosses know they have an issue somewhere. They might not want to face it but they should get down and dirty and find out what’s going on.”
Top trends: 2012 predictions
Vanessa Gold, deputy managing director, Ann Summers
The brands that will make it through this tough economic period will be those that invest in and listen to their customers. Brands are back on that trend now. I’d be stunned if retailers and brands aren’t already taking their mystery shopping and customer insight very seriously.
Brian Scudamore, chief executive, 1-800-Got-Junk
I think going back to the floor is a trend. It is good for morale, connecting with customers and understanding what’s working and what’s not. I think leaders are realising that’s the way to do business.
Nick Longman, distribution director, TUI
Customer engagement is not just particular to travel – if you are in any selling environment it is key. You have to almost be on the shopfloor to appreciate whether we are giving customers what they really need right at the sharp end.
Martyn Birks, marketing director, Poundworld
I think every retailer should do it, it is an amazing exercise, it is priceless. Since the Undercover Boss programme aired, we have paid mystery shoppers to go round the shops and I see that continuing.