CRM lessons from Ikea

We restricted ourselves to two potential article of furniture suppliers a UK-based caller, home ground, with what appears to be a fairly effected traffic model, which provides fairly stylish, relatively dearly-won furniture, and kea, a Swedish furniture retailer with a slight conventional business model, with much less expensive furniture, perhaps less stylish. I thought that we would credibly end up purchasing nearly either our furniture from Habitat, whereas actually kea was our main supplier.Whilst buying this furniture, a number of interesting points just about Kikes business model became app bent o Most of Kikes products are provideed as flat-pack self-assembly kits. Habitat also supply goods in that format, primarily it seems, to ease shipment (and reduce associated costs). However, Kikes products had been radiation diagramed not only to reduce shipment costs, just now also to minimize toil assembly costs. liable(p) design had been white plagued to produce goods w hich tramp be assembled by the purchaser with minimal skill (use of a screwdriver and spanner only), from parts manufactured by spring with little human effort in the production plant.The design also ensured a robust, stylish element of furniture despite the limited skills of the assembler. Much of the work involved in manufacturing the piece of furniture had been travel from the factory, to the client. The reduction in cost had also been passed onto the customer. For at least this customer, there was also a large feeling of achievement in assembling the remand or chair. The result a high pure tone piece of furniture at low-cost, but with a lot more work for the customer, but breast a resulting sense of achievement. There are differences in the retail outlet model as well. Habitat provides a conventional Main Street retail outlet, with room to display the goods, and attentive sales ply to discuss the furniture. Kikes out-of- town, large-scale outlet had the space to flack something different. The products were displayed in a number of room mock-ups so that pieces could be seen in relation to other products, with design stations to help the customer to build their own design. kea staff were on hand, but not as sales assistants, more to advise on sign, go bad whether stock was available, etc.This approach helps with the interior design fits of selecting furniture, once again for this customer at least, a difficult aspect of buying furniture. O Distribution It is here that the close to obvious differences with a conventional retail instal occur You have to pick the goods from the warehouse yourself deliver (though there is a 3rd-party delivery servicing at a cost). All this may appear to be poor customer service, but again, it takes out a lot of cost from the distribution process, and this is passed on to the customer. client Direct Transactions If you specify about it for a minute, because Kea wont take orders, it is key that customers can fi nd out if Kea has a fact percentage point in stock. (You dont want to go to an distant entrepot, to be told that what youve come for isnt in stock and the store doesnt take orders. ) Kea have recognized this and so provide an automated phone service to kick you to check whether the item you want is in stock. That item is number 1 in the automated service menu first plus mark.There are a large number of stores I use which I wish provided a similar service. Next, Id like you to think what ATA youd ask a customer for if you were designing a check-in-stock doing. Well, its obvious isnt it you ask for the stock code. Well Kea dont think its obvious to a customer and when you use their service you recognize that theyre right. Instead, they ask you for a catalog page number, and then the price of the item youre interest in. They then tell you the items on that page at that price and you confirm which one you want.A pretty weird transaction by IT standards, but customer-friendly. If youre a customer interested in stock levels, youre very promising to have the catalogue open. The page number is purposeful to you, is short and easy to enter on a phone keypad (all digits). The price is also meaningful, again short and easy to enter (all numeric). No company Ive ever worked for has simple stock-codes. Someone has designed this transaction with the end-user (the customer) in mind. What, if anything has this to do with CRMIn my view, a lot o Kea have chosen to tilt from a conventional business model to reduce prices significantly, by placing a lot of burden onto the customer. CRM is not inescapably about better customer service, but about giving the customer a better survey reposition, or increased value for money. O Their change in business model leads to a take on for a new transaction for the customer. That transaction is designed to be simple and fast for the customer to use. In Kens words (nearly) in this week newsletter theyve listened to their custom ers.