Discussion with IKEA

The Capgemini Research Institute spoke to Aaron Mitchell, Global VP, Customer Engagement and Loyalty, IKEA about the future of customer engagement and loyalty and how IKEA creates and nurtures an emotional connection with customers.

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IKEA’S CUSTOMER DATA PROMISE 

How do you identify where and how to improve customer engagement?

We want to give people help when they need it from us. We try to reach people in their homes, where they’re relaxed and open to ideas and inspiration.

The data tells us where customers are on their journey and, from this, we can judge what help they are likely to need. But it is not always straightforward: we run into challenges in building deeper customers relationships.

Customers ask us: “Why should I share my data? What’s in it for me as a customer and you as a brand?” We need to address this question to the customer’s satisfaction to generate quality data.

They may also say, “If I share my data, you’re not making me feel special” or “I don’t receive enough value.” Brands need to engage with people’s home lives.

From IKEA’s perspective, how do we continue to engage people after they have left the store? It’s not just about trying to sell more products. It could be simple things that maintain that personal connection, like tips and ideas on extending the life of your product, or how to use the products in different or better ways.

How do we make our loyalty program adaptable to customers’ needs? We need to adapt our offering to the circumstances of the customer, whether they are about to start a family, move house, or build a home office. The membership program should be fluid.

Marketing is essentially front-of-house for businesses. We draw people in, make them feel valued and special through personalization and offers, and persuade them to share personal data for mutual benefit.

How do you convince customers to share their data?

Almost half of our turnover is generated by IKEA family members. However, another 20% of our members that buy don’t identify themselves (either as members or otherwise). This means we are missing out on valuable data to improve customer experience.

To address this, we created a Customer Data Promise that gives customers control over their data, and guarantees transparency in how we use that data and offers value in exchange for access to it. We also created a data-ethics policy that goes beyond just being GDPR-compliant.

We designed and launched a new program that rewards customers for interactions, not just transactions. Customers are rewarded for creating an account, downloading one of our planning tools, participating in an event, or reviewing one of our products or services. Each customer builds up an engagement score based on these interactions.

ALIGNING LOYALTY WITH PURPOSE

How does your loyalty program resonate with IKEA’s vision of improving people’s everyday lives?

We are driving purpose-led engagement and loyalty. You will never be done wanting to have a better life at home. We aim to build long-lasting relationships with customers, helping them make better choices.

It’s about pitching at moments where IKEA can solve more of those ‘Life at Home’ problems. This way, we become part of our customers’ lives and they remember us when other important life moments arise.

Customers’ lives at home underwent major changes recently with the pandemic: flexible working, lockdowns, and home schooling. We’re trying to use our program to help people adapt.

EARNING LOYALTY IN UNCERTAIN TIMES

How do you modify your approach to customer loyalty during uncertain times?

We keep our messaging personal and empathetic, rather than getting too tactical, in a commercial sense.

During the pandemic, the home became the focal point for most people, which gave us a wonderful opportunity to share our knowledge. A lot of people wanted to remodel their existing furniture for home schooling or working, rather than replacing everything. We aimed at adding value for people, even if it wasn’t about driving a purchase. We live-streamed digital events, shared home-furnishing knowledge, and organized a lot of social-media interactions.

How did the new loyalty program for small businesses [the IKEA Business Network] come into being?

We wanted to create a rewards concept that addressed the problems of business owners. We conducted over 1,000 interviews, polls and questionnaires and launched pilots in Asia, Europe, and North America.

We smashed our customer-recruitment goal by over 75% because it was such a compelling proposition. We are in the process of launching in eight countries this year and another 10 next year. The scheme focuses on helping small businesses grow. We offer IKEA expertise to help them create affordable spaces that meet their individual needs and help them to look after employee wellbeing.

Membership benefits include workshops with IKEA interior designers to improve space usage; online training by IKEA experts and business leaders from around the world; and colleague discounts, including gym memberships and health insurance.

CONNECTING WITH CUSTOMERS

How do you create and nurture an emotional bond with customers?

I think of it as expressing our brand through digital, to enhance the customer experience. As many as 80% of our customers start their home-furnishing journeys on our website. So we need to start inspiring them there.

We consider digital as a medium for making personal recommendations, not just another sales channel. We try to inspire, create a sense of excitement, rather than just push products at the customer. We have tried to make it more of a shared experience, too: we started a digital clubhouse for IKEA family members, where people can share ideas and ask for help from the community.

We have also developed Geomagical Labs, which provide 3D and visual AI solutions for interactive home-furnishing planning. We make live broadcasts, a 24-hour digital and in-store festival based on the Life at Home concept. We also expanded into Life at Home services, such as offering home insurance or clean-energy services.

The key is to infuse our digital touchpoints with our brand purpose, making it more personal, more curated. That leads to stronger emotional connections with the customer.

FUTURE OF LOYALTY AND CUSTOMER ENGAGEMENT

How do you see your customer-loyalty program evolving?

We’re shifting from just driving the currency of loyalty from transactional to purpose-and-experience-led. It means creating propositions that give customers unique experiences, choice and flexibility, better access to the brand’s offering. We want to add value beyond just the monetary.

People join IKEA family because they love the brand. That knowledge comes with a lot of responsibility; we have to keep working to ensure they keep loving it. Future loyalty programs will be more about giving you more access than before – access to support, inspiration, a service, or a community.

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