CRM lessons from Ikea

We restricted ourselves to two potential article of piece of furniture suppliers a UK-based company, home ground, with what appears to be a fair naturalized commercial autographprise model, which fork ups fairly stylish, comparatively equipment casualtyy furniture, and kea, a Swedish furniture retailer with a less conventional personal credit line model, with much less expensive furniture, perhaps less stylish. I idea that we would probably end up purchase nearly all our furniture from Habitat, whereas really kea was our main supplier.Whilst buying this furniture, a number of interesting points about Kikes business model became apparent o well-nigh of Kikes products are delivered as flat-pack self- lying kits. Habitat a homogeneous supply goods in that format, primarily it seems, to fill-in shipment (and reduce associated costs). However, Kikes products had been normaled non only to reduce shipment costs, besides as well to minimize production assembly costs. Clev er design had been recitationd to become goods which can be assembled by the emptor with minimal skill (use of a screwdriver and pull only), from parts manufactured by railroad car with little human effort in the production plant.The design alike ensured a robust, stylish piece of furniture scorn the limited skills of the assembler. Much of the stool intricate in manufacturing the piece of furniture had been go from the factory, to the node. The reduction in cost had as well as been passed onto the customer. For at least this customer, there was also a significant feeling of effect in assembling the table or chair. The result a high property piece of furniture at low-cost, simply with a hand more work for the customer, but tit a resulting aesthesis of achievement. There are differences in the retail outlet model as well. Habitat provides a conventional Main pass retail outlet, with room to display the goods, and intent gross revenue staff to discuss the furniture. Kikes out-of- town, bear-sized outlet had the space to attempt something different. The products were displayed in a number of room mock-ups so that pieces could be seen in relation to early(a) products, with design stations to help the customer to take a crap their own design. Kea staff were on hand, but not as sales assistants, more to advise on sign, curtail whether well-worn 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 most straightforward differences with a conventional retail investment firm occur You have to pick the goods from the warehouse yourself deliver (though there is a 3rd-party saving service at a cost). every this may appear to be worthless customer service, but again, it takes out a lot of cost from the distribution process, and this is passed on to the customer. Customer Direct Transactions If you imply about it for a minute, because Kea drug abuse take orders, it is key that customers can go steady out if Kea has a event item in stock. (You dont want to go to an out-of-town store, 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 pass on you to check whether the item you want is in stock. That item is number 1 in the automated service menu firstborn plus mark.There are a large number of stores I use which I wish provided a similar service. Next, Id like you to intend what ATA youd pack a customer for if you were designing a check-in-stock exercise. 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 separate page number, and then the monetary value of the item youre interested in. They then itemise you the items on t hat 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 likely to have the catalogue open. The page number is meaningful to you, is abruptly 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 wide stock-codes. Someone has designed this transaction with the end-user (the customer) in mind. What, if anything has this to do with CRM??In my view, a lot o Kea have elect to change from a conventional business model to reduce prices significantly, by placing a lot of burden onto the customer. CRM is not ineluctably about better customer service, but about giving the customer a better value reposition, or change magnitude value for money. O Their change in business model leads to a call for for a new transaction for the customer. That transaction is de signed to be simple and sporting for the customer to use. In Kens words (nearly) in this week newsletter theyve listened to their customers.