Mystery Shopping Reveals Unhealthy Secrets That Could Be Damaging Your Business

Mystery Shopping Reveals Unhealthy Secrets That Could Be Damaging Your Business

Jurek Leon - Tuesday, February 13, 2007

by Jurek Leon

In his best seller “Freakonomics,” renegade economist Steven Levitt describes the power of revealing difficult-to-obtain information.  Levitt says that when one party to a transaction uses information the other does not have, a condition of “information asymmetry” exists. 

Sounds complicated, doesn’t it?  And how does it have relevance to mystery shopping and the health of your business?  Stay with me, while Steven Levitt explains a bit more....with the help of the Klu Klux Klan.  Well, he cites the Klu Klux Klan as an example.  Here goes:

Undercover Agent Reveals Secret
Safe in a shroud of secrecy the Klan, which was on the rise after World War II, had the power to do pretty much as it liked.  American society was deeply worried, but because of the dearth of actionable information, could do little or nothing about it. 

However the Klan did not reckon on the courage of Stetson Kennedy, son of the famous Stetson hat family.  Kennedy bravely joined the Klan as an undercover agent in order to obtain hard information about the Klan's activities.

Kennedy understood the raw power of information he obtained, but failed to get the authorities to act.  Then, in a stroke of genius he handed the Klan's secrets to the producers of the popular Superman radio show.  The outcome was dramatic.  As America's children recreated each episode in play (as kids do), Klan members were horrified by the sight of their own children rushing about in capes or hoods shouting once-secret passwords.  Attendance at Klan events went into rapid decline and the post-war rise of the Klan stopped dead in weeks.  And it happened because the information asymmetry enjoyed by the KKK was re-balanced in favour of society.

Customers Have Secret Information
Information asymmetry also exists in business, notably between customers and management.   Like the Klan, customers have “secret” information.  This is why mystery shopping and other forms of customer experience research are so powerful. 

In the same way that Kennedy's undercover Klan operation revealed information that proved beneficial to the stability of American society, mystery shopping reveals information that is beneficial to the health of business.  Mystery shopping shines a bright light on customer transactions.  Management therefore has a better chance of influencing the customer experience, of protecting the brand, of targeting training needs and ensuring that policies and procedures are followed.

So the question, “Why do mystery shopping?” has a very good answer.  Essentially it re-balances information asymmetry between customers and management and empowers managers like yourself to make changes that benefit you both.

Prepared by Peter Rogers, Managing Director, Mystery Shopping International.  Phone: 02 9911 6694.

Jurek Leon is a storyteller, trainer and coach who presents courses and addresses seminars on word of mouth marketing, motivation, customer focussed selling and managing the customer experience. Subscribe to Jurek's FREE monthly ‘Terrific Tips’ e-newsletter at Alternatively, email

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Jurek Leon is a storyteller, speaker and trainer. Subscribe to Jurek's FREE monthly 'Terrific Tips' e-newsletter at Alternatively, email