Hello,

I have a very good friend who is looking to expand his retail chain into a few MD/DC/VA areas as a franchise. I told him that mystery shopping companies probably charge $100 per location per visit for the works and that I could help as a favor. Could I run a one man show - scheduling, editing, and paying through paypal? I imagine reachout through jobslinger and MSPA would be easy. The costs would be in very small digits (<$500/year) this way and that it would be too small to have to incorporate or go crazy. I could pay $10-15 a location for a quick stop and ultra short questionnaire and charge whatever extra the sassie system costs per shop. I would do the scheduling/editing for free.

Would anyone advise me against doing this on the small scale, for such things as legal squabbles and unforeseen headaches?

First you need to contact SASSIE, and find out what their prices and requirements are. You then should get pricing from few MSCs. You would then get a good idea if a single client makes it a worth while exercise as compared to hiring a company. Even if you started, you would need data base of shoppers or you would have to hire a scheduling company. Payment via Paypal might be relatively easy to set up.

Edited 1 time(s). Last edit at 04/08/2012 03:07AM by anakin.

I say go for it! I would bet that is how the big MSCs started out. Just please pay your shoppers at least $20!

rlclarkindy Wrote:
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> I say go for it! I would bet that is how the big
> MSCs started out. Just please pay your shoppers at
> least $20!

Wow! $20 is a lot. Lately I'm seeing even dealership shops for $14, apartments and mattress shops are still in the 25-35 range. These shops usually take 30-60 minutes and a lot of reporting. I'm going to be offering a 5 minute coffee shop type shop.

I wish I could but instead I designed the report to be ridiculously easy. I do a grocery and fast food shop around here often, with over 60 questions for $10-$14. My survey isn't even going to have 30 questions. It's a cafe type chain... free coffee, so I'm pretty sure there will be demand for it too... In the end the market will speak to me! If I need to give out bonuses and such, we'll see. I think $15 is overly generous for this shop.

If your friend has never been signed up as a mystery shopper himself/herself then there would be no problems with the 'non-compete'clauses of the ICAs if he/she opened an MSC, but there could readily be issues if YOU opened an MSC. Most of those ICAs indicate that you may not be an owner or employee of an MSC for two years following termination with them.

On the other hand, some MSCs do pay a finders fee for bringing clients to them.

Warning: RANT alert and assumption heavy post:


Wow the sassie system is robbery!!

$1000 one time set up fee!!

$50 per shop, lowering in cost until you reach about 100 shops a month it is pointless.


2) Shop fees are determined via the following tiered pricing matrix

# of Shops Shop price AutoScheduling Shop price
1 $50 $3
10 $40 $3
21 $25 $3
30 $17 $3
50 $10 $3
100 $5.00 $3
150 $3.33 $3
250 $2.50 $3
500 $2.00 $3 < - -- - median pricing level
1500 $1.75 $3
2500 $1.50 $3
5000 $1.25 $3
10000 $1.00 $3

Example:

A mystery shopping company that performs between 500 and 1499 shops in a a month would pay $2 per shop and an additional $3 per autoscheduled shop

Also:
- $40 system fee for your company
- $15 for each of your clients

These are all monthly fees.
OUCH!
much respect to companies out there. Had no idea it cost that much for small fries.



So built up, a job might look like this:

$5 fee
$10 reimbursement
$5 sassie fee
$3 scheduling report /editing

If the client has a few locations they are probably charged $75-$150/location. I still see a lot of money going straight to the MSC.

Lets say I capture A small burger chain of 100 stores. One shop per month per location. Over one year:

Net revenue ($75/location): $90,000
$6,960 Sassie fees:
$18,000 shopper fees and reimbursements
$5,000 bonus pool
$3,600 scheduler fees

gross = $56,4000

I mean, no one is getting filthy rich here, but it looks like the schedulers take the biggest hit.

To get even a few employees on payroll, you either need to be charging clients well over $100 a location visit, OR you need 1000's of mystery shops per month!!


Let's say you are CORI, and you have a large client that will be unnamed. Actually, approximate this client times 10 because they have many. The client has 10,000 stores, but only half are shopped (select markets). These shops pay on average $15 a location. This is $15 * 5,000 stores * 10 clients * 12 months = $9 million. This is a great estimate because CORI specifically stated they paid out about 7 million in shopper fees last year.

Back calculating now, they have listed on Manta they are 100-250 employees. Say 150 employees at $60,000 includes a good average overhead and location adjustment. This means they pay 9 million in salaries to employees internally for things like attracting clients, trade shoes, editing, scheduling, etc. Based on an industry average, salaries are usually 30% of total revenues. That means the CORI breakdown might look like this:


$45 / shop fee to the client = 27 million in total revenues.
9 million in salaries
7 million in shopper fees.
11 million remaining for operations and profit. Not bad!

According to [www.privco.com], and assiming a 22% yearly growth rate in revenues, CORI made about 22 million in 2011. This matches my numbers.

So how the heck is mystery shopping a 1 B dollar industry? Low concentration - lots of small guys, sassies. Well sometimes people like me see money and think everyone is getting rich. Doesn't look so clear anymore.

Actually the one person getting rich IS sassie.
If 20% of all mystery shops are done through sassie, assuming a 1 B /year market, this is 200M in revenues. Assume 20% of the revenues go to paying shopper fees and an average fee of $25. This would mean there are 1.6 Million shops done through sassie a year.

At the auto-scheduling rate $3 + average fee of $2, that is a cool $8M for sassie. Knowing what I know about sassie, it could have been a one man show or even a few people, probably cost less than a million to make. No one person is getting rich, except the systems developers! Cool.

Edited 2 time(s). Last edit at 04/08/2012 03:07PM by marmani.

Yea, Sassie is well known to be the most expensive systems out there. There is at least one large MSC that is an investor in Sassie, so they are making money off it too. There ARE significantly cheaper systems out there.

You won't be able to recruit through Jobslinger without being a Sassie user of course. MSPA is off limits unless you are a company member (which I think is $600 per year). You would probably be limited to recruiting through job boards and forums like this one.

That said - if it is super small project, why use Sassie or a reporting software at all? Why not just have the forms done in Excel or Word? Also, why the heck would you do the scheduling/editing for free? I think you underestimate how much time that would take and you should be paid.

The ICA point that Flash has is a good one. A lawyer friend of mine told me that ones that prohibit carte blanch from working as a MSC for any client is not enforcible, (that it is more an issue of ensuring you are not working for any existing MSC client that you shopped for through them previously - i.e. stealing clients away) but again - it might be worth it to check it out via a lawyer that you trust who you can show specific ICAs to.

Even if the noncompete clauses turned out to be unenforeable, you could end up defending a bunch of law suits AND blackballed by the MSCs concerned (or even others).

However, many MSCs will pay you a finder's fee for bringing in a new client....typically a percentage of the MSC's gross from that client for one or more years.

marmani Wrote:
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> Actually the one person getting rich IS sassie.


Ding!....a little light goes on. No physical product. Very low operating cost.

The main challenge is marketing, so if there was some way to ensure schedulers using your product.....ding....another light goes on!

If this is going to end up being a one shot deal to help your friend, why bother with using one of the reporting platforms. Set up the survey on Excel or something. Assuming you don't want to deal with non-compete issues you still might be better off being a paid consultant for your friend. It's doubtful a finder's fee from any of the MSCs would be very generous

SteveSoCal Wrote:
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> marmani Wrote:
> --------------------------------------------------
> -----
>
> > Actually the one person getting rich IS sassie.
>
>
> Ding!....a little light goes on. No physical
> product. Very low operating cost.
>
> The main challenge is marketing, so if there was
> some way to ensure schedulers using your
> product.....ding....another light goes on!

Ding! You know Mr Sassie is actually married to Ms Kern, right?

marmani Wrote:
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> So how the heck is mystery shopping a 1 B dollar
> industry?


Marketforce is now $50 million and going for $100 million in revenues in 2-3 yrs. Their average contract is $250000, and more than 80% of MF's revenue is recurring with 1- to 3-year contracts.

a. the friend can do what ever he wants.
b. why does it have to be sassie?
c. if the friend has any programming skills, he/she can probably come up with something even better.
d. the point isn't to pay $20 (or any other particular shop fee) but to pay what is fair and respectful.

The first assumption on this thread that I saw that was incorrect was that companies are charged $100 per shop (and then later $75 per shop). It's nowhere NEAR that in the real MS world.

Gill Scheduling Wrote:
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> The first assumption on this thread that I saw
> that was incorrect was that companies are charged
> $100 per shop (and then later $75 per shop). It's
> nowhere NEAR that in the real MS world.


I think it's well understood that the fees move on a sliding scale, depending on the amount of work involved.

While $75 may be out of line for a simple retail visit with a few questions and limited narrative, there are plenty of shops that pay that amount or higher.

I'd hire a freelance coder; it would save a @#$%&-ton of $. Software similar to the Sassie system could be written and debugged within a couple of days.

Sassie is making out like a bandit with that per-shop fee. Maybe my time would be better spent writing and marketing my own software, in lieu of mystery shopping. There are indeed a select few getting rich in this business, and it sure as hell isn't we shoppers.

Mantis Do you have programming skills? I do not. I took a free course, offered on line by a couple of guys from Stanford and UVA (I think). The first couple of lessons were fun for me. Then I got hopelessly lost. I admire anyone who can do it. But, I look at it this way, too. I can do some algebra in my sleep. People are amazed, as if I was able to conjure spells or something. Certainly, there is lots more money and LOTS MORE RESPECT in programming. If you can, I say go for it.

jersey, I could write something similar to Sassie, but it would take me quite a while. Seeing how much money Sassie is skimming tempts me. I still think hiring a freelance coder would be the way to go. They'll work for close to peanuts, especially if they're located in the third world.

Google Docs has a form you can set up for use with their spreadsheets. There's also sites like Zoomerang.

Edited 1 time(s). Last edit at 10/10/2013 02:20AM by CAscotch.

CAscotch Wrote:
-------------------------------------------------------
> Summit Scheduling Wrote:
> --------------------------------------------------
> -----
> > The first assumption on this thread that I saw
> > that was incorrect was that companies are
> charged
> > $100 per shop (and then later $75 per shop).
> It's
> > nowhere NEAR that in the real MS world.
>
> Does this mean that the companies are typically
> charging more or less than $100 per shop?


LESS! Less, less, less! If he said $50 for a $15 per shopper fee, he'd STILL be out of the ballpark with what he's charging. I just got through saying this on a different thread but MOST MSCs and scheduling companies are NOT getting rich in this business. SASSIE, Kern, Marketforce, and a few others are certainly the exceptions. Mr. SASSIE marrying Ms. Kern does help keep the dollars coming, I'm sure.

My first comment was going to be to tell you to stay away from SASSIE as it IS the most expensive platform. I trained on it for editing and scheduling and while it is easy enough to use, so is Shopmetrics. It's one reason ACE went with Shopmetrics after switching from Prophet (another reasonable but limited at the time platform). Personally, I'd say stay away from ClientSmart as it is clunky to use.

You can use an Excel or Word spreadsheet but be prepared for MANY shoppers to screw it up because you can't freeze certain aspects of the documents and allow changes to others. At least, not that I know of. Recently for ACE, we had auditors using Excel until we convinced the client to put the audit online. It was an awful nightmare some of the things auditors would do to the Excel forms. Like seriously people? It's highlighted where to answer! Please stop messing with everything else before I sob uncontrollably.

Which leads me to my next point, you will be a sorry, sorry, SERIOUSLY SORRY fool if you do not charge for scheduling and editing. Those are two of the toughest jobs in the industry and you are undervaluing the work needed. You don't realize the volume of emails, of shop requests, of reschedules, of flakes, of terribly written reports, of unusable reports, of shoppers yelling at you because they submitted something that is not client worthy. Great reports are the exception and lower your expectation of what an "average" report is. They still take time to edit. Minimum 15 minutes easy for an "average" report. That's being kind. Even the excellent reports of an average length will take you minimum five minutes to read and verify the scores are correct. So sure, don't charge for that. You'll be crying like a baby within a month and regretting your decision not to charge. I promise you that.

I am not trying to dissuade you from starting your own MSC but I am telling you to research it and think it through. You will have plenty of expenses and want to charge for your services. But if you think you can charge even $50 for a $15 shop, then be forewarned that there are MANY MSCs out there that can and WILL underbid you. There are reasons I'd NEVER be a MSC owner, despite my best friend's insistence we start our own company. HELL NO! You crazy woman? Welcome to the reality of being a MSC. Enjoy.

Edited 1 time(s). Last edit at 08/08/2012 05:47AM by AlwaysAngie.

Oh, really? That's why during one of my revealed shops today I was asked "So do I pay you the $95.00 fee or does X client pay for it?" You don't know how hard it was to not tell her what I was getting paid.

or we can go to an even more egregious disparity between shopper pay and what the MSC charges... Citgo..


Or taking from Citgos Trimark of Excellence

Source: [www.cspnet.com]

"Cost per shop will be $350, 50% of which is covered by CITGO's co-op fund. CITGO will waive the bill entirely for high-scoring sites."

So, unless Citgo is pocketing $100+ of that "half" amount, let's be nice and assume they are writing off that other half for the "co-op" fund.

So.. where again is the money going? I know how much shoppers are paid per shop on citgo and it is nowhere near the dollar amounts posted.

Thanks.


Summit Scheduling Wrote:
-------------------------------------------------------
> The first assumption on this thread that I saw
> that was incorrect was that companies are charged
> $100 per shop (and then later $75 per shop). It's
> nowhere NEAR that in the real MS world.

starblazr Wrote:
-------------------------------------------------------
> Oh, really? That's why during one of my revealed
> shops today I was asked "So do I pay you the
> $95.00 fee or does X client pay for it?" You
> don't know how hard it was to not tell her what I
> was getting paid.


That happened to me once with MarketForce before they were the big conglomerate they are now using the old Shop'n Chek portal. I was shocked when I mistakenly found out what the client paid per job. Jaw-drop shocked.

However, there are always exceptions to the rule (yours and mine are two) but most companies are not making that type of money. A few big-wigs are, I'm sure, but it's not commonplace. I've seen the fees. I've talked with others (i.e. schedulers in the know) who've confirmed this. So don't think Summit Scheduling was blowing smoke up your arse. It's NOT the norm. If it was, we'd ALL be happier in this business. Lord, I'm getting a goofy grin thinking about making even $5 more per edit. One can dream...

Edited for typo because I'm OCD like that.

Edited 1 time(s). Last edit at 08/08/2012 05:48AM by AlwaysAngie.

We are not the 1%

cynb Wrote:
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> We are not the 1%


Not even close. LOL?

As a client (i.e. someone that contracted with a MSC to purchase mystery shopping services) I paid $75 per in-person visit and $15 for a telephone visit. I also happen to know (cause I saw the job postings, not because the MSC told me) that the shopper was paid $25 per shop (it was a fairly narrative intensive shop with a few special scenarios - while maybe slightly on the high end, it is in the range - albeit a bit high - that a mystery shopper would expect for this type of shop). The other "$50" went towards programming of the form, editing, scheduling, sales (someone had to "sell" me as the client) reporting and sheer overhead.

ETA: We were getting reports as word attachments. The MSC we used eventually went to the Sassie system, and then they left the Sassie system due to expense; however, when I was a client - it was all word/excel attachment based. As a client I did not have to deal with the weird shopper screw ups in excel/word that Angie describes. Obviously what I got was clean.

Edited 1 time(s). Last edit at 08/08/2012 07:05AM by MickeyB.

Mickey, you didn't have to deal with the weird screw-ups because the editors would have to fix them! LOL Let's just say be happy for that. The places people would write things or they'd change the fonts, size of the columns, make things bold or italicized, delete entire comment or instruction boxes, and all kinds of things that give them more work than just typing in the correct comment box.

I was so grateful when the client decided to accept the online form, though it gave poor Jamie a TON of work to get it ready for the client. Thankfully, I didn't know enough about building forms then to do it myself. Lucky me. LOL

From your example of a $25 shopper fee, I've seen and heard of client fees ranging from $50 to $75. So a $10 shopper fee would range from $20 to $30 for the MSC. Always exceptions to the rule, though.

In the summer of 2007, I had an appointment to meet the owner of a small MSC in a local cafeteria to discuss a route. I arrived early and was asked to wait while he finished a phone call. I overheard him state a quote for video shops @ $295 each; I later learned he paid his shoppers a fee of $50.

My jaw literally dropped. I'm so shocked that I had to go dig up this guy:

Well...there is the price quoted and the price finally agreed upon.

I think many smart business negotiators will pad quotes and then come down on the price as needed. They may sell some shops at $295 but if the client starts to shop around, they will quickly move elsewhere.

Regarding the post about Citgo; That's what they charge their franchisers for the shops. I'm sure they are building in extra to cover the free shops they give the high scoring outlets, offset the gift cards and probably keeping a bit for themselves as well.

I would be shocked if they were paying $75 for those shops. There's just way too much competition amongst MSCs for that to go on very long.