Get a Clue

Targeting The Market

Because virtually any company that has contact with the public is a potential client for a mystery-shopping firm, the phenomenon has spread to include almost every industry. Matt Wozniak, president and CEO of National Shopping Service, a mystery-shopping firm in Los Angeles, has more than 10,000 shoppers based in almost every major U.S. city. They check out fast-food restaurants, mail order companies, service stations, car rental agencies, home improvement companies, golf courses, hotels and even race tracks. His business grosses close to $5 million a year.

William J. Nowell, 41-year-old president of ServiceTRAC Inc. in Scottsdale, Arizona, is a former marketing director of retirement communities who turned his knowledge of the retirement housing industry into a $1 million mystery-shopping, sales-training and consulting business.

"In 1990, I wanted to know what the people who visited our retirement communities thought about them," he explains. Nowell looked for a mystery shopper with expertise in the area of retirement communities and found none. Three years later, with $40,000 in start-up capital ($30,000 of his own funds and $10,000 from his former employer), Nowell left his job to start ServiceTRAC. Nowell now offers his services to the retail, home-building and credit union industries as well.

With a roster of 77,000 mystery shoppers and annual revenues of more than $2 million, Feedback Plus has become one of the industry's heavy hitters. "We're not on a witch hunt," Henry, 53, says of her service. "Our shoppers are looking for people who do a good job as well as [those who perform poorly]. Our reports can help managers run their companies by providing pats on the back."

Entrepreneurs say indifference to the customer is the most common fault they find. "The staff just ignores you," say Csordos, "or continues talking about [the latest movie] while they wait on you."

In other cases, the service may be fine, but the staff isn't aggressively selling the products or services. As Henry points out, "Waiters who don't ask whether customers want dessert can take tens of thousands of dollars off the bottom line."

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Get a Clue.

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