CRM lessons from Ikea

We restricted ourselves to two potentiality furniture suppliers a UK-based company,Habitat, with what appears to be a fairly conventional employment sit down, which provides fairly stylish, relatively costly furniture, and kea, a Swedish furniture retailer with a less conventional business model, with much less expensive furniture, perhaps less stylish. I thought that we would probably end up buying nearly all our furniture from Habitat, whereas actually Kea was our of import supplier.Whilst buying this furniture, a number of interesting points ab expose Kikes business model became apparent o Most of Kikes products are delivered as flat-pack self-assembly kits. Habitat excessively supply goods in that format, primarily it seems, to ease shipment (and reduce associated costs). However, Kikes products had been knowing not only to reduce shipment costs, but alike to downplay production assembly costs. Clever design had been engaged to produce goods which bath be assembled by t he purchaser with minimal skill (exercising of a screwdriver and wrench only), from parts manufactured by machine with little human stew in the production plant.The design also ensured a robust, stylish role of furniture despite the limited skills of the assembler. Much of the work involved in manufacturing the piece of furniture had been moved 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 significant whole step of achievement in assembling the table or chair. The result a high quality piece of furniture at low-cost, but with a lot more work for the customer, but tit a resulting genius of achievement. There are differences in the retail outcome model as well. Habitat provides a conventional Main Street retail outlet, with get on to display the goods, and attentive sales staff to discuss the furniture. Kikes out-of- town, large-scale outlet had the space to attempt something differen t. 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, check whether expect was available, etc.This approach helps with the interior design aspects of selecting furniture, again for this customer at least, a difficult aspect of buying furniture. O Distribution It is here that the virtually obvious differences with a conventional retail store occur You throw off to pick the goods from the warehouse yourself deliver (though there is a 3rd-party delivery aid at a cost). All this may appear to be poor people customer service, but again, it owns out a lot of cost from the statistical distribution process, and this is passed on to the customer. Customer Direct Transactions If you think about it for a minute, because Kea wont take orders, it is key that customers can find out if Kea has a particular position in store. (You dont want to go to an out-of-town store, to be told that what youve come for isnt in agate line and the store doesnt take orders. ) Kea have recognized this and so provide an automated earphone service to allow you to check whether the item you want is in stock. That item is number 1 in the automated service menu source 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 intercommunicate 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 catalogue rascal number, and wherefore the price of the item youre interested in. They then tell you the items on that page at that price and you confirm which one you want.A pretty weird action by IT standards, but customer-friendly. If youre a customer interested in stock levels, youre very likely to have the catalogue open. The page number is pregnant 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 change from a conventional business model to reduce prices significantly, by placing a lot of burden onto the customer. CRM is not necessarily about interrupt customer service, but about giving the customer a bump value reposition, or increased value for money. O Their change in business model leads to a need 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 customers.