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Mystery shopping companies need to charge their clients the correct amount to succeed.
Too little, you don't make any money. Too much, you discourage prospective clients. I have helped to launch many mystery shopping businesses. In that process, the question I receive the most is how to figure out how much to charge per report. Rather than provide a specific dollar range to charge, this article will give you a formula so that you can come up with a dollar amount that will fit your situation.
Start by figuring out how much to pay shoppers.
If you enlist mystery shoppers, your first expense would be to pay them any fees out of what you charge. How much should you expect to pay for different types of shopping jobs? What is the going rate? Here's a tip to help you determine that:
- Go to ShadowShopper.com. On the bottom, it says available jobs. Click on that. Next page will have a box for a zip code. You can put in your zip code or you can use the zip code of any large city. Jobs will then come up with shopper fees.
- Do the same with jobslinger. Put a zip code in the "search near" box at the top.
Now for the type of shop you are looking at, example retail store, you will have the amount of fee to pay the shopper on top of any reimbursement for their expenses.
How do you figure out the rest of the expenses?
- Take the total ongoing expenses; example, phone bill, office rent, web site fees, etc. These are expenses that continually occur. We will call these "fixed expenses." Add these up, say for a period of three months. Divide this figure by the number of mystery shops you've had over the same three months. As an example, say your total expenses for three months was $1000 (if you work at home, this amount will be minimal). In that same period of time your company did 200 shops. $1,000 divided by 200 equals $5/shop.
- Add to that; the shoppers fee, an editing fee (example, $5), if applicable, and any automation service per report fee (example, $3). In this case, your total expenses would be $5 fixed expenses, editing fee $5, automation fee $3/report and shopper fee $5. So using this example, your total expenses for one report would be $18.
Now you can figure out how much to charge.
You decided you want to make $20/report. So you would charge $38/report ($18 expenses + $20 profit).
Another consideration.
Some shops might take a very long time to perform (such as a hotel stay) and require a long narrative, whereas other shops, such as a fast food restaurant, would require much less time and have a quick yes/no type questionnaire. Additional expenses to do time-consuming shops and long narratives would have to be taken into consideration.
What about charging a bargain rate to entice a new client?
Now you might be tempted to want to charge a bargain rate just to get your foot in the door, thinking you can later raise your rate when the client is happy with you. Resist the temptation to do this. Clients won't like it when you turn around and raise your fees. Right from the start, you have to charge a rate you will be comfortable with long term.
Mystery shopping companies can make very good money if they correctly figure out how much to charge. Though this is important, it is just one piece of the puzzle to create and maintain a highly lucrative company.
Copyright 2010 S. Joseph
About this Author
For more information on how to operate a financially successful mystery shopping company, please visit mystery-shopper-business.com
The author, Shari Joseph, has been in the business since 1985, as a mystery shopping company owner, then author, consultant, and workshop leader. She has helped people all over the world to start and operate their own mystery shopping company, and was instrumental in introducing this industry to several countries.
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