Our Services
Mystery Shopping Studies
Mystery shopping studies are widely used in the financial services industry to evaluate the sales skills, service quality and compliance practices of an organization’s sales force. Most major banks conduct in-person and telephone mystery shopping studies of their retail banking centers on a regular basis. Some organizations even incorporate mystery shop results into their incentive and compensation plans.
Since the publication of the Interagency Guidelines in the Spring of 1994, mystery shopping studies have also been widely used to monitor and evaluate the "oral disclosure of risk" and other point-of-sale sales and compliance practices of registered representatives and licensed branch employees who sell annuities, mutual funds and general securities in the bank lobby. According to Dr. Kenneth Kehrer of Kehrer-LIMRA, 90% of the largest banks in the country have conducted in-person mystery shops of their investment sales programs and over 60% do so regularly. Mystery shopping studies are also commonly used by the consumer and mortgage lending areas of banks to test for service quality, as well as possible discrimination in lending practices.
Sales Quality Group has extensive experience in the area of mystery shopping and has conducted well over 70,000 shops for over sixty regional and national banks and credit unions over the past decade. In addition, Sales Quality Group has created a large database of normative data, giving the client the added value of being able to compare areas of strength and weakness against national averages.
Investment Shops: In our view, in-person mystery shops are the single best way to evaluate a registered representative’s or licensed branch employee’s overall compliance, sales and service quality skills. We typically recommend shopping each full-time broker twice in order to better determine the broker’s performance if he or she has a "bad hair" day. Conducting two shops also tends to reduce or eliminate the defensive behavior we often see if a rep is only shopped once and does poorly on that single shop. A popular alternative to the two-shop approach is to shop all brokers once, then reshop those who score considerably below average. We typically end up re-shopping between 20% and 40% of the brokers.
Our approach is a little different with Licensed Branch Employees. Instead of trying to shop all LBEs, we usually recommend shopping a statistically valid sample of the group – generally 20% to 40%, depending on the size of the sales force. We further recommend targeting the LBEs and branches that produce the greatest volume of sales. If we were to conduct 50 walk-in shops targeting 50 top-selling LBEs, for example, our shoppers would typically end up meeting with the targeted LBE in about 75% of the shops and non-targeted LBEs in the remaining interviews. This approach gives us a good read on the behavior and skill level of both groups.
Retail Bank Shops: Retail bank shops come in all shapes and sizes, from in-person new account shops, to teller shops, to call center and even email shops. In contrast to investment shops, retail bank and credit union shops typically focus primarily on service quality and selling skills.
While some banks and credit unions use extremely simple and low cost shops to monitor only rudimentary service quality skills, a growing number of financial institutions are expanding the scope of their mystery shopping studies to include more advanced needs assessment, product presentation and closing skills, similar to those tested in investment shops. Organizations such as Bank of America have invested heavily in advanced training and mystery shopping programs in order to take service quality and selling skills at the branch level to new levels. The banking industry today is more focused than ever on the concepts of exceeding their customer's expectation and establishing a brand loyalty in all customer interaction. The concept of mystery shopping is an integral part of all such long-term initiatives.
Pricing: Pricing of mystery shopping studies varies significantly based on the complexity of the study, the amount of shopper training required, geographic factors, and the volume of shops. Retail branch shops typically range in cost from $70 to $125 per shop, depending on the complexity of the study, the number of questions and the extent of narratives required, plus the cost of the project design and management reports. Investment shops are somewhat more expensive, with unit costs typically ranging from $175 to $250 each, plus project management and reporting fees.
If you would like additional information on Sales Quality Group’s in-person and telephone mystery shopping studies, please contact Jim Rensel or Bill Gutkowski at (480) 967-7500.
Customer Call Back Studies
Sales Quality Group has experience conducting both retail banking and investment program customer satisfaction studies. One of our most popular studies is designed specifically for the bank's investment and insurance sales program. Here is a detailed description of this type of study:
During the Fall of 1994, Sales Quality Group solicited input from its Investment Program Design Group members in the development of a Post-Sale Customer Call Back Study. The concept was to design a study that would address regulatory concern over establishing a viable customer callback program and, at the same time, generate valuable customer attitude and opinion data on the performance of the investment sales representative and program.
Based on input from Design Group members, Sales Quality Group drafted a “model” post-sale telephone customer survey and then tested it with several bank investment sales programs. Further refinements were made based on beta-test results, and the survey methodology has now been distributed to Design Group members for their use. Sales Quality Group believes that this new methodology provides a good balance between customer comprehension, customer satisfaction, compliance, and marketing elements.
This survey was conceived as an initial study designed to provide the bank investment program with valuable baseline data on their customer’s understanding of what they bought, why they bought, and their satisfaction with the service they received. Upon completion of an initial study, the script can be modified for use as an on-going call back program through script revisions and the addition of questions like, “Did you receive a confirmation of your trade?” The model post-sale customer survey contains 16 closed-ended questions, 3 open-ended questions, 4 open-ended comment areas, and 5 data elements to be provided by the client institution. The telephone script can, of course, be customized to the client institution’s specifications. Sales Quality Group’s management report provides a detailed correlation and analysis of all survey elements. Survey results are sorted by product type, by customer demographics (age, sex, prior experience, etc.) and by sales representative in order to give management insight into both customer attitudes and opinions, as well as individual representative performance. Sales Quality Group’s normative data will also allow the program to compare customer responses to those of its peers. In addition, Sales Quality Group can generate report cards for each registered representative, summarizing their customers’ individual and aggregate comprehension and satisfaction scores.
In order to obtain statistically valid results, Sales Quality Group generally recommends a minimum sample size of no less than 100 completed calls to recent investment product buyers. Clients will be asked to provide Sales Quality Group with at least three, and preferably four, times as many names as the requested sample size (i.e., 900 - 1,200 names needed to complete 300 survey calls). The study can generally be completed within 6 weeks from receipt of the required customer data from the client. Interest in this type of study is on the rise because of the high information-to-expense ratio – you can conduct 5 to 7 complete telephone interview shops for the cost of a single in-person mystery shop. For further information on Sales Quality Group market research methodology and pricing, please contact Jim Rensel or Bill Gutkowski at (480) 967-7500.
Branch Referral Studies
While bank investment sales programs can receive leads from many sources, branch referrals remain the single most important source of referrals for most programs. According to research conducted by Kenneth Kehrer, investment sales programs that consistently rank in the top quartile in terms of sales and revenues typically receive five to ten times the number of referrals from the bank per registered representative and per branch as bottom quartile programs. In 2004, for example, banks supporting top quartile programs typically generated over 100 referrals per branch and over 390 referrals per broker during the year.
Sales Quality Group has developed an extremely cost-effective way to measure your branch employees’ service quality skills, propensity to refer and compliance with referral do’s and don’ts. By identifying opportunities for improvement and impediments to the referral process, the results of a branch referral study can assist you in substantially increasing the number and quality of referrals generated each month by your bank’s retail branches.
How the Study Works: Sales Quality Group’s shoppers will call each branch several times posing as prospective customers who are interested in current CD rates. The shoppers are instructed to inquire about CD rates, then to report whether, and under what circumstances, the branch employee mentioned the availability of non-deposit investment products and/or referred them to a Financial Consultant or Licensed Branch Employee.
When calling a branch, the shopper will first monitor the level of service they receive when they call, including such things as the number of rings, wait time, whether the customer service representative introduced himself/herself and whether or not he/she thanked the shopper for calling. Next, the shopper will state the purpose of their call and begin monitoring the branch employee’s “propensity to refer.” Ideally, the branch employee will ask several questions of the shopper and then spontaneously refer him/her to the appropriate Financial Consultant. If the branch employee does not spontaneously refer, however, the shoppers will then give one “needs” clue, such as commenting about low rates or asking if they could get a higher rate for a longer term. If the branch employee still does not suggest non-deposit investment products, the shopper will attempt to prompt a discussion by asking if the bank “offers any other investment options?” Once the issue of non-deposit investments comes up, the shopper will report what was said and to note any possible violation of the Bank’s referral “do’s and don’ts.”
The Management Report: The results of your study will then be compiled and presented to you in a formal Management Report wherein the branches’ sales, service and compliance quality skills are noted and compared to normative data from several dozen similar studies conducted by Sales Quality Group over the past few years. The Management Report will contain a number of charts and graphs clearly depicting the results of the study.
Copies of all completed shopper evaluation forms will also be provided to the client. The evaluation form includes results from all evaluation criteria measured, the shopper’s narrative and a numerical rating of both service and sales quality, plus the shopper’s overall satisfaction with the call. The shopper evaluation forms can be used as report cards to help coach the branch employees who were shopped during the study.
The Management Report, of course, helps draw attention to the issue of referrals, and in many cases, will help spur bank management to allow more training and to encourage more referrals. But the Management Report can also spur even more activity on the referral front, such as the creation of a special referral incentive program. Combining a branch referral testing study with a referral incentive program creates an ideal environment to foster substantial increases in the number of referrals to your investment sales program. Several of Sales Quality Group’s clients have reported substantial increases in referrals and program revenues immediately following such studies.
Branch referral studies tend to be extremely inexpensive, with unit costs as low a $35 to $45 per completed call. For further information on Sales Quality Group market research methodology and pricing, please contact Jim Rensel or Bill Gutkowski at (480) 967-7500.
Focus Groups
Sales Quality Group has conducted focus groups for both retail banks and investment sales programs, plus an occasional insurance company or brokerage firm. Focus groups can provide critical qualitative data on a whole host of products and services.
How a Focus Group Works: Focus groups are the classic qualitative research tool. Typically, a group of about 10-12 participants gather in a conference room setting to participate in a discussion led by a professional moderator. The participants are selected based on predetermined demographic or other criteria. The moderator has been thoroughly briefed by the client and works from a fairly detailed discussion outline prepared in conjunction with the client. Retail consumers are typically paid $50 to $75 for participating in a two hour session, while business or professional people may receive as much as $100-$200 or more. In focus groups, participants talk about their attitudes, opinions and impressions of the information and materials presented for their review. Focus group sessions are often held in a facility with a one-way mirror, allowing client observers to watch. The observers not only learn from watching these sessions, but they can also participate indirectly by providing input and direction to the moderator during pre-planned breaks. Audio and video recordings are made of each group to provide a record of the discussion. These recordings are used primarily by the moderator to prepare a report on the session. Video recordings can be edited into a brief overview of the highlights of the session, which would then be distributed to interested parties who were not able to attend the focus group session.
The principal limitation of a focus group is that it only deals with the attitudes and opinions of a small group of people. While the interaction among the group participants can provide the sponsor with a great deal of insight into consumer behavior, it is important to note that group consensus is not the way that real life purchasing decisions are made. Many times quantitative research is conducted to follow up on the information collected during focus group sessions. Focus group research tends to be relatively expensive on a per participant basis, but provides the client with unique insight into the consumer’s awareness of a product or service, as well as their attitude toward, opinion of, and expectations about the product or service. Many financial services industry executives consider focus groups to be the single best way to test the design of a new product or service before its launch (or to revise a current product or service).
Focus group research could be used in several important areas, including new product development, general and specific customer satisfaction studies, as well as branch employee referral research. The turn-around time from concept development to the final written report for a series of focus groups is typically 4 to 6 weeks. Costs vary based on a number of factors, but generally run in the $5,500 to $7,500 range, depending on logistics and the number of sessions desired. For further information on Focus Groups and Sales Quality Group market research methodology and pricing, please contact Jim Rensel or Bill Gutkowski at (480) 967-7500.