Financial Times: November 2007

As an actress and writer, Emily Stott knows better than most how to play a part. Even so, she admits to feeling nervous when, once a month, she steps through the elegant entrance of a Jimmy Choo store in Central London to try on dozens of pairs of shoes. She will debate all of them animatedly with the sales staff but, sadly, never buy.

Ms Stott, 35, combines acting and writing with a day job at the head office of the shirt company Thomas Pink. She is also a mystery shopper for no fewer than seven agencies. With more assignments than she has hours in the day (her favourites are expensive hair-cuts because when she walks out of the salon the service leaves with her), Ms Stott is a perfect example of a style-conscious consumer who integrates mystery shopping into her lifestyle. "It's pretty much tailor-made for me, because I love to shop anyway."

Her activities also illustrate the extent to which the twilight world of mystery shopping has lately been firing up the world of business.

The current appetite for mystery shopping, which the Mystery Shopping Providers Association values at almost $1.5bn (£720m)worldwide, stems from companies realising that as much as product quality, it is the service that surrounds purchasing that tempts consumers to try out brands and make glowing reports to their friends.

Companies that serve the public directly, such as hoteliers and retailers, are among the industry's biggest users. But other businesses call upon mystery shoppers too. Brand owners want to know that their products are being properly merchandised and venture capitalists hire shoppers to find out whether the customer skills of companies in which they might invest are as good as their owners make out. The mystery shoppers, too, often have a professional interest - many are entrepreneurs and business people keen to see how others run their operations.

Jeremy Michael is commercial director of Retail Eyes, a mystery shopping company. Historically, he says, mystery shoppers reported narrowly on whether things had, or had not, happened - whether an order was taken promptly and all the choices were available. But this focus on operational targets missed the human side of making customers happy, which arguably matters more. "With traditional mystery shopping it is possible to score 100 per cent by doing the right things, but in a manner that makes it unlikely that the customer will return."

To try to capture the spirit in which service is offered, businesses have begun searching for alternatives to the conventional tick-box approach to mystery shopping. One possibility is to use a scoring system that seeks to differentiate between, for example, a greeting that is "cold and mechanical" and one that is "warm and genuine." Another is to ask mystery shoppers to describe, in their words, how it felt to be a customer.

Tim Mills, UK operations manager at Paul, a Paris-based French patisserie and bakery business, has had good and bad experiences of mystery shopping. Often he has had to pull up a mystery shopper for cutting corners in the comments section. Now, when he runs a programme, he makes a point of using at least two agencies so that he can compare the quality of their shoppers' reports. "As well as answers to the questions that we've asked, we want people's opinion," he says.

Widening the focus of mystery shopping from policing operational standards to soliciting ideas for service innovation has consequences for shopper recruitment. Once, the only skills that a mystery shopper needed were a good memory and an ability to work from a checklist. Now, the emphasis is on finding individuals who have an instinct for the things that matter to customers, because they are part of the target market.

Mr & Mrs Smith, the hotel and travel specialist, personifies this way of working. The company's core business is publishing guides on boutique and luxury hotels. After an initial vetting, a candidate hotel is visited by a husband and wife couple posing as guests. "We look for people with a good sense of style, who have an eye for critical detail but who also know how to enjoy themselves," says James Lohan, Mr & Mrs Smith co-founder. "The idea is to come at it from the consumer's point of view."

Mr Lohan's network, which includes designers, entrepreneurs, writers and some minority celebrities, parts company with classic mystery shopping because the mystery guests' reviews are read by the public. But his insistence on working with people who think like a husband and wife on a weekend away, rather than hired researchers with a more regimented approach, is indicative of an emerging trend.

Retail Eyes promises to supply clients with shoppers who accurately replicate the make-up of their trade at different times of the day or days of the week. Finding mainstream consumers happy to shop in return for a small fee (typically about £5-£10), with some freebies thrown in, is rarely a problem, says co-founder Tim Ogle. But supplying shoppers to fit an up-market specification demands ingenuity.

One possible strategy is to target people on limited budgets who nevertheless share the tastes and high service expectations of the firm's core customers. Ms Stott, who takes friends out to dinner and has her hair cut and coloured at a top London salon every six weeks courtesy of mystery shopping, is a classic example of such a shopper. But not all the mystery shoppers in Retail Eyes' network, which includes directors of companies, City professionals and self-employed business people, are enticed by the lure of an expenses-paid lifestyle. For some, the motivation is professional.

Pauline Skinner, 36, runs Aulcon International, an IT and professional services company, with her partner. Originally from New Zealand, Ms Skinner was so depressed by the service that she encountered on moving to Britain in the 1990s that she took up mystery shopping in the hope of making things better.

As someone who has clients herself, Ms Skinner believes mystery shopping has taught her valuable lessons. Witnessing the customer handling skills of companies as diverse as Harrods Food Hall and Subway, the sandwich chain, has, she says, crystallised for her the extent to which good service is always about the quality of "the human interaction" between the customer and the sales assistant.

"There is a fine line between being professional and, perhaps, being perceived as slightly aloof or withdrawn," says Ms Skinner, who admits to sometimes having erred on the side of too much reserve. "Mystery shopping has taught me that I can allow myself to be a bit more informal and show my clients more of my personality."