Although a store may spend $10,000 a month on rent, it seems incredulous that a $100 per month spend on mystery shopping (1% of the rent) needs to be justified with ROI. If salaries and running expenses are taken into account (roughly to equal the monthly rent), then $100 per month equates to 0.5% of the operating expense of a site.
However, if ROI needs to be justified, it can be done as follows. Note, the resultant ROI number is so high that it seems unbelievable. There are few (if any) investments that can return a 3,600% ROI.
Imagine a store with:
- 5,000 people walking through per month
- 80% of people buy
- Average price of $60
The store also has the following statistics found from the mystery shops:
- Greeting customers 68% of the time
- Commitment to purchase is asked 32% of the time
- Up-selling 34% of the time
Let’s do the math to calculate the ROI:
5,000 customers x 80% who buy x $60 = $240,000 sales per month.
Here’s what happens if the store increases each of the three mystery shopping categories by 10% and 10% of the customers now buy (e.g., customers who were asked for a commitment to purchase increases 10% from 32% to 42%, and conservatively, only 10% of that 10% who asked to commit to a purchase actually made a purchase).
3 categories x 10% x 10% = 3% increase in sales
Old sales of $240,000 is improved 3%, being $7,200 increase in sales.
If the mystery shop expense was $100 per month ($1,200 for one year) and it took 6 months to get the 10% improvement, then there are 6 months of the $7,200 increase in sales ($43,200), then there is a return of $43,200 for a $1,200 expense, an ROI of 3,600%.
There is perhaps no greater opportunity for an investment with 3,600% return. It’s an investment worthy of the front page of every newspaper, yet it remains hidden in plain view.
