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How To Cut $50,000+ In Operational Costs From Retail Districts By Cutting Out The Middle Man(ager)

  • Written by  Lisa van Kesteren, SeeLevel HX

0aaLisa Van Kesteren SeelevelWith the new year ahead, many smart executives are thinking beyond trimming waistlines and instead focusing on trimming bloated budgets. E-Commerce is putting the squeeze on traditional retail and retailers need to find an edge to keep their stores profitable. Well, just as calories can hide anywhere, so can unnecessary expenses, and this year is the perfect time to make a resolution to target underperforming retail budgets and inject new life into tired operating models.

A great place to start is the district manager. This is the middle man in retail, and there’s a way to reduce the number of district managers needed, while dramatically improving the performance of the tighter management roster that remains. The answer starts with an honest evaluation of the roles and responsibilities of the district manager.

District Managers: Old Versus New Thinking

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With an average annual salary of $65,000, the job of the district manager is to ensure each store within the district runs smoothly. This can encompass everything from cleanliness and proper inventory stocking to adherence with corporate brand standards and the latest marketing and sales efforts. But what many retail chains don't realize is that they can shrink the number of district managers required with a much more cost effective and efficient tool for monitoring each local store environment — the mystery shopper.

Mystery shoppers see your stores through the eyes of the consumer, and very little escapes their watchful gaze. They collect critical information on what’s happening both inside and outside of a store and have the advantage of a neutral perspective that’s missing from an internal district manager. Mystery shoppers can visit a location at a much higher frequency than a single district manager could ever hope to achieve, and they do it at a much lower cost.

Consider this: The cost of a mystery shopper visit to a store location is $45. For an annual spend of $8,400 per district, store performance can be improved and validated, versus the $65,000 annual salary of the district manager. The cost advantages of a mystery shopper over a district manager enable a company to not only reduce the total number of district managers required, they also empower the company to retain only the best managers and liberate them from the repetitive task of simply capturing store data. Instead of dealing with confrontational surprise store visits, district managers can now focus their energy on more productive efforts, such as training store managers.

Mystery Shoppers Open An Honest Window Into Store Performance

With an objective perspective outside of the organization’s structure, you can really know what’s happening at your stores. You can discover exactly what your customers see/hear/touch/smell with every interaction from the physical environment, to store associates, to what’s happening in the parking lot. When obtaining this critical data through a mystery shopper, you gain the benefit of an impartial arbiter. Store managers can no longer call each other to warn of a district manager that’s reviewing stores on their circuit, because the mystery shopper follows no circuit. You get an evaluation of true store performance without the agenda or politics. And a store assessment can be repeated at any time to ensure that improvements and changes have been successfully put into place.

How To Capitalize On The Power Of Mystery Shoppers

The essential ingredient in getting the most out of mystery shoppers is that the data collected must be actionable. Triggers should be set that send a notification to the levers of power within an organization. Think about it: If a mystery shoppers witness a safety issue within a store, the shopper cannot take action to resolve the issue independently. But what can happen is that when shopper reports an issue, it can automatically trigger alerts to the store manager, the manager’s supervisor and the company’s legal department to ensure that the necessary level of focus to resolve the issue is applied. An action item can be created for the store manager that can only be resolved when the manager submits proof that the issue in question is resolved both effectively and permanently.

How do you put such as system in place? That’s where an experienced partner comes into play. You need to work with someone that is intimately familiar with managing the mystery shopper relationship. This partner can help source the right mystery shopper talent, set up the proper frequency of visits, put a process into place to pull actionable triggers and resolve issues, and develop a follow-up process to ensure necessary improvements are made and the resolution loop is closed. And this can all be done for a fraction of the cost that you’re probably paying for your district managers right now. With the right partner and process in place, the operational and cost effectiveness of mystery shoppers will shine far brighter than the old store management models of the past.


 

Lisa van Kesteren is the CEO and founder of leading mystery shopping agency, SeeLevel HX, with more than 600,000 mystery shoppers, covering QSR, retail, financial services and more, nationally. Under van Kesteren’s leadership, SeeLevel HX has grown from a niche player in the mystery shopping space to a business intelligence industry leader that puts business leaders in control of their brand’s customer experience delivery.

                  

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