Setting trap: When companies want to to plug leakage of leads, mystery shoppers step in

A German luxury car maker recently sent a decoy customer to its Gurgaon showroom. The motive? To assess its service standards and snoop in on what's going on at various operational levels. Posing as a potential customer, the decoy carried out a sting operation of sorts, as instructed by the company, to detail his experience. As soon as he stepped out of the showroom, he got a sales call from a rival company.

Clearly, a salesman at the showroom has leaked out the info to the rival -- a process mystery shopping companies call `leakage'. The German company duly investigates the matter, identifies the errant staff and fires him.

In a similar attempt at self-evaluation, a private bank recently used a decoy to investigate a branch. The decoy had to inquire about insurance products and make observations. The help desk staff, supposed to guide customers to the right desk/person, asked the decoy for his contact details and assured him that he would get a call back. Next day, the decoy received a call from an agent of a rival finance company.

As it goes, domestic companies -- mostly banks, insurance companies and other service providers -- are increasingly checking their own showrooms and branches, and of course, their own employees to plug leakages. Such leakages, company executives agree, are all-pervasive and entrenched in corporate culture. They whisk away clients and siphon off all businesses – from bars to bankers, service providers and retailers to new-age home-service aggregators. Mystery shopping firms, which specialise in carrying out covert audits, have tools to track and control leakages.

Bare Associates International, global industry leader, said that leakages could be of two types -- of leads and of goods and services. They gave an example of a mystery shopper who went to a builder's sales office to inquire about flats. He told the staff that his budget was a little lower than what they were offering, and he couldn't afford the property. Two days later, he got a call from a competitor with details of affordable housing.

In dim-lit bars, fat tips can get you lower bills, if you are a regular. Mystery shoppers routinely conduct 'integrity checks' to plug the leakage of products. Similarly, if a salon staff makes home visits without informing his superiors, it becomes leakage of services.

Pankaj Guglani, CEO and founder of mystery shopping firm Red Quanta, tells that leakage of leads is common where ticket size of the purchase is high. "There can be several examples, starting from luxury cars, financial services and real estate, among others. It is prevalent where shortcuts to make quick bucks are plenty or is difficult to track inventory." He cites an example from the retail industry. Pilferage is a bane when there are loopholes in the supply chain. The staff can shift the blame by saying that the products got stolen before they reached.

So, how can mystery shopping help? Guglani says the main problem for staff members face is the disposal of stolen goods.

Leakage is also very common among service aggregators and multi-level marketing companies such as Amway and Oriflame. Some agents tap the uncovered markets by selling online. A big concern here is that consumers are not educated about the correct usage of certain products.

But are leakages common across the world?

Praveen Sinha, MD & co-founder, Jabong.com, finds it difficult to compare the leakage in India with the rest of the world. "Here, we do face an enormous window of leakage across various sectors and firms. Despite extensive adoption of technology to build global business models, corporate India continues to face challenges in mitigating leakage threat. The threat is majorly towards cyber security. It has become more prominent with increments in marketing calls related to loans, credit cards etc."

Anubhab Goel, co-founder & CEO of home service marketplace Zimmber, believes it is more prominent in India. "We are an economy where demand-supply is highly misaligned. We have a few areas where supply is in abundance and a few where it's not there at all. Hence, different shades of leakages."

"Leakages are common in white-collar job aggregators. They are smart people and always look for easier ways of getting things done directly. Blue-collar issues are very small," he adds.

Sonul Verdia, GM & MD – India, ME & Africa, Bare Associates International, says: "One could refer to the global retail theft barometer report for India. In a 2009 survey, India topped it. Shrink cost globally is 1.3% of global retail sales and 30% of this is constituted by employee pilferage."

Guglani says leakages are prevalent in India. "Newer companies don't generally have any tool to track leakages. They focus on expanding and later realise the problem. Companies like Housejoy and Timesaver might face such concerns where service providers might try to establish a direct relationship with the customers," he says.

Can losses occurring through leakages be quantified?

"Good statistics are very hard to get. Figures available will never represent the actual situation as many leaks and data breaches go unreported. There is no single repository for incident tracking. These statistics only include incidents that reach the media or are self-reported by companies," explains Sinha of Jabong.

Goel agrees that it is difficult to measure the losses, but provides a rough estimate. "My assumption is that for a white-collar job, this could be as high as 33% of the cases and around 5-7% for blue-collar jobs," he says.

According to Guglani, leakages could range from 10-25%, depending on the industry and the nature of the company.

So, what are companies doing to plug the leakages?

"Mystery shopping is one of the good bets here. However, even bigger step we take is being ruthless about it. We just fire them in case we get to know. Mostly at Zimmber, we use the maximum time to look at the inventory of the service providers which helps in plugging leakage," states Goel.

Explaining some steps to prevent data leakage, Sinha says, "Establish tools and processes to track your data movement, protect systems by using only authorised application and access methods, maintain security software, understand the consequences of agreeing to or negating Security Agent pop-up actions, prepare for spams, malware, phishing, and other attack methods."

Guglani says that leakage is an integrity issue, where training the staff does not help. Sometimes companies also fire entire teams to set an example for the rest.