By Marc Ciagne and Julie Strasberg, Person to Person Quality
Most auto dealers are familiar with the concept of Mystery Shopping – the practice of using trained evaluators posing as would-be customers to engage dealership employees for the purposes of making detailed observations about the people, facilities, and customer experience.
Mystery shopping companies work with the client to custom-design scenarios that replicate the typical customer experience, then use their network of field agents to carry out the assignments. A typical sales department mystery shop scenario might begin with an internet or phone new vehicle inquiry, followed by a scheduled appointment and a visit to the showroom for a test drive and trade-in appraisal. Within that standard framework, the mystery shop can be customized to meet specific client goals.
For example, a client may want the mystery shopper to try to negotiate a lower price to see how the sales staff responds. Or, the client may want the mystery shopper to mention a competitor and see how the salesperson handles that. The mystery shoppers receive training on which scenario to follow and what to look for during each step of the interaction so they can file a detailed written report afterwards.
Many OEMs use mystery shoppers to evaluate how effectively their dealer networks are presenting their products in the showroom, and then pass these reports on to dealership management. Dealer groups also use mystery shopping companies to collect valuable feedback on their salespeople and service departments.
Mystery shopping can also play a very useful role in the dealership acquisition process, helping assess an acquisition target’s intangible value, including its people, culture, processes, and customer experience. Mystery shopping is a valuable tool for collecting the intelligence needed to identify the strengths and weaknesses of the possible acquisition. This intelligence helps the buyer to either develop the right strategy for post-acquisition success, or decide that the target dealership is not a good strategic fit.
John Altman, the COO of Beyer Auto Group, owns 9 franchises at 6 stores in Northern Virginia, and is a longtime Person to Person Quality client. Mystery shopping helps him assess a dealership’s upside potential and how much he will need to invest to achieve that potential.
“Knowing if processes are in place, or if everyone is just doing their own thing, is very important in estimating how much effort will be needed to get everyone singing from the same sheet of music,” he says.
Altman believes mystery shopping can help identify training needs and inefficient processes so the buyer can unlock value post-acquisition. And if the mystery shops raise enough red flags during the due diligence process, it might even help the buyer avoid making a bad purchase.
Randy Hoffman is the VP of Sales and Finance for Ed Morse Automotive Group, a Florida-based dealer group with 17 franchises. Ed Morse gets both sales and service mystery shop reports each month from Person to Person Quality.
“Usually, when acquiring another store, we’d want to install our own processes and procedures. Mystery shopping can help us identify how our processes differ from theirs, so we know what needs to be done from a training standpoint during the transition,” says Hoffman.
He sends mystery shoppers into the service department to chat up customers about their service experience and check out the property’s general upkeep. Assessing if it has been regularly maintained is especially important if Morse is buying the real estate, which is often the case, says Hoffman.
Mystery shopping programs can be used to collect intelligence on response times, manager interactions, test drives, trade-in appraisals, product presentations, and closing skills. Mystery shop reports can also inform staffing decisions that must be made during the transition. Beyer Auto Group’s Altman says mystery shops can help answer the question, “Who are the performers and who are the duds?”
Marc Ciagne is managing director of Person to Person Quality, and Julie Strasberg is with the Person to Person Quality division of ADI Consulting. Marc and Julie can be reached at 703-836-1517 x2 or by emailing Julie at email@example.com.