The IKEA mission is to produce quality furniture at affordable price.
After my 2006 article, IKEA’s Branded Experience came out, I heard from readers in different part of the world who had similar emotions. I wrote how I hate the IKEA in-store shopping experience and yet have continued returning to IKEA over the past 20 years. Others don’t like (or even hate) the long queue, the crowded in-store environment and the DIY service, but they love IKEA.
An Israeli reader said IKEA is sometimes called the third temple. Another, from England, lets his wife shop without him.
Even though not every single aspect of the in-store experience is great and some aspects even induce pain in customers; it remains effective in generating positive memories and delivering the brand values of IKEA—the natural outcome of a branded experience. A branded experience is not necessarily a great experience at all touch-points. On the contrary, a branded experience requires you to allocate your limited resources to create significant pleasure peaks (those that perform way above the average, such as product and price) and limit “pain” to an acceptable level.
It’s not hard to understand the philosophy behind IKEA. To get quality products at a price level you can afford, you have to “do it yourself” more. IKEA’s primary target is the general masses, and its strategy is to select some, but definitely not all, of the critical needs of this target group and focus its resources on performing superbly well on fulfilling the select critical needs.
‘IKEA’s primary target is the general masses.’
As a business executive or owner, you may think you well understand the concept and appreciate that. But I would argue that you don’t. Let me just ask you one simple question: Are you and your company being customer-centric?
We all talk about customer-centricity. To be customer-centric, you have to listen to the voice of the customer. If you have ever conducted any kind of customer satisfaction survey, you should probably know what the “importance-performance quadrant” is.
Figure 1 illustrates IKEA’s importance-performance quadrant. The chart indicates the attributes or drivers located on the dimension of importance (to the customer) and performance or satisfaction of the IKEA in-store experience. It’s easy to interpret it as showing that you should reduce or minimize the spending on those attributes with low importance to the customers; maintain the investment on those of high importance and high performance; and focus your resources on enhancing those with high importance and low performance.
Figure 1: Importance-performance quadrant of IKEA in-store experience
For IKEA to follow the voice of the customer as illustrated, the company has to enhance the bulleted attributes in red, namely the car park, staff service, choosing stock, searching stock, check-out, delivery and installation (these are part of the subprocesses during the in-store experience; we can actually link all the subprocesses in a natural time sequence to form an emotion curve) because they are important to the customers but poorly performed. However, if IKEA really did all that, we wouldn’t have the great IKEA brand we have. Simply put, there will be no pleasure peaks during the whole in-store experience because the company’s resources would be spread too thin among the various attributes without any focus.
There’s nothing wrong with listening to the voice of the customer, and it’s necessary. But, basing your follow-up actions or even your entire strategy wholly on the voice of the customer could be both dangerous and wrong.
Strategy is about making choices. Designing an effective customer strategy—and the corresponding branded experience—means making choices on resources allocation, too. No matter how big your company is, you can never fulfill all of the customer needs. For one thing, customer needs can be never-ending, and for another, it is not an effective way to manage customer experience.
To deliver a differentiated, branded experience, you have to select and focus. You must factor in the brand element while you listen to the voice of the customer. Subprocesses that are important to your customers may not be important to the brand. That means you should focus your resources on those subprocesses that are important both to the customers and to the brand, as long as other subprocesses don’t fall below what you deem to be an acceptable level. The blue stars in Figure 2 represent IKEA’s subprocesses of product quality, price, display setting, product trial and the canteen.
You need to deliver your brand values and satisfy the critical needs of your target customers at the peak and end experiences because those represent the only points that customers recall.
Figure 2: Importance level to brand and customer of IKEA in-store experience
An experience is not effective unless it is both remembered and branded. No matter how many resources you expend on creating a positive experience, they are all wasted if your customers cannot remember the experience. Similarly, if your customers remember the positive experience, but they don’t connect the experience to your brand, it is though you did charity work. An unbranded experience will have no impact on building brand loyalty.
In addition to discovering the voice of the customer, you may want to measure the effectiveness of customer experience. The experience-centric voice of the customer (the x-VOC) measures your customers’ emotions in a specific experience process, from start to finish. Your survey sampling size must have relevant statistical significance, and you need to segment your customers. Different segments may have different emotion curves, and their critical needs are different and so will affect the effectiveness of the experience differently.
Customer-centric could be wrong if you don’t take a paradigm shift from measuring efficiency to effectiveness of experience; if you don’t build in brand values into the experience; and if you don’t have guts to select the critical few to focus on and limit “pain” to an acceptable level.
Sampson, IKEA has three categories of customers — people who buy what IKEA sells, people who work for IKEA and Stockholders/owners of IKEA. Their model, if one looks at it from a shopping experience point of vies, tries to satisfy only two of them — the staff and the stockholders. Interesting, they paid less attention to those that keep their doors open and provide the funds for salaries and dividends, their retail customers.
The complaint, and this goes for not just IKEA but also most of the big box retailers and web sites, and here is where I differ from you when you say that businesses should listen to the voice of their customers. It is that they should be, and this goes for all retailers and web sites (all web sites are store whether one see them as such)through the eyes of the first time visitor. If there is pain at that visit, the chances of a return visit will be less even though they offer good design and low prices.
All retailing is theater. Like going to a play, concert or movie, one says to themself or others ans they leave, “How did you like it?” It is this answer that makes for a positive or negative brand.
As to listening to customers, it should be that they listen to complaints such as yours and, if the same complaint comes up often enough, changes should be made. However, your article and what I’ve heard from others, very likely those who experienced pain in shopping at IKEA never told IKEA. So how can they listen if there is no one saying anything but accolades? . . . which, of course, they listen to.
Alan
Alan J. Zell, Ambassador Of Selling
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Awarded the 1992 Murray Award for Marketing Excellence
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Dick Lee – Sampson, I take issue with your statement that a great customer experience must be “branded.” I have many great customer experiences unaccompanied by brand presence. In fact, I’m more likely to enjoy a non-branded experience because for most sellers, brand = puffery, and like so many of today’s customers, I hate puffery.
I could create many alternative explanations for Ikea’s success without mentioning brand. And when David Mangen, PfD. and I did our customer buying trigger study last year, customers downgraded the importance of brand in buying decisions. In fact, Ikea is a customer-centric company. They meet the #1 criteria for buying decisions – combining quality product with quality service (in Ikea’s case, helping customers envision how products will look in their homes). They meet the #2 criteria, having empowered, well-trained employees. They meet other top criteria such as honest and respectful communication. No, Ikea doesn’t offer much in the way of warm fuzzies. But warm fuzzies are in no way synonymous with customer-centricity. And sure, I get frustrated by the amount of walking I have to do to get in and out of there with what I want. But they have what I want in a big way. And that totally eclipses the importance of brand.
Dear Dick and Alan,
The worst companies make customers feel bad with BAD experiences. The average companies make customers feel good with GOOD experiences but neither are they remembered or branded, they’re just wasting resource. The best companies never forget about deliver their target brand values at the same time when they make customers feel good with EFFECTIVE experiences.
An experience is not effective unless it is both remembered and branded.
Sampson
Many articles have been written about IKEA but this is the first time that I have ever seen IKEA’s focus and non focus areas so clearly identified. To me the charts in this article are by far the most important and original component. Thank you Sampson for explaining so clearly what to many observers has been difficult to understand.
Malcolm
Dick Lee – Sampson – your terminology “target brand values” is telling. If you take “target brand” out it makes just as much sense, perhaps more. Companies have values. Brands don’t. Brands are just an abstract construct used to justify huge expenditures on media advertising. I’m well aware of that because I was CEO of an ad agency when the whole “branding” concept was introduced. We used to laugh about how much more agencies were charging for a set of services they related to brand than for those same services they didn’t try to relate to brand (a practice we refused to adopt).
Dick, I take issue with your comment that brands are abstractions used to justify huge expenditures on media advertising. Study after study indicate that comfort with aspects of products and brands develops in part unconsciously through repeated exposure. Add to this the reality that a customer’s feeling and opinion of a company and/or it’s products determine their propensity to pay more (or not), and you can only conclude that the power of a brand — which is ultimately ONLY defined by the customer — is abetted by the customer’s comfort level with the brand, so advertising can really pay off.
Effective experiences support the character of the brand that the company wants to communicate.
I DO agree with you that agencies — and the companies addicted to them — talk a lot about “brand” when they really don’t get it, or want to daze and confuse each other. It’s not a healthy way to run a company. But ultimately the company and the customer are in a conversation with each other (and with competitors) about what is meaningful and memorable about the “brand”. A memory, a disposition, a propensity to act — they are all “abstractions” that make a difference in the marketplace.
I also do agree with you that there may be explanations for IKEA’s success separate from what IKEA defines as its brand. But that success is driven by repeat purchases, and new purchases, from people who want a shortcut to remember why IKEA is a good choice. That shortcut … I think this is what really constitutes the brand.
This is clearly a very confusing area.
WHAT IS A BRAND?
Perhaps the best current definition of a brand is Tom Asacker’s. He defines a brand as the combination of feelings, thoughts and intentions that a product invokes within you. The heart of a brand is thus the expectations it creates. If you see an IKEA advert on a billboard, the real brand is what you expect your next experience with IKEA will be like. The biggest driver of expectations (in terms of both influence and usage) is your own experiences, followed by those of others with company communications trailing far behind.
HOW EXPERIENCE RELATES TO BRAND
If a brand is defined by a customer’s experiences with a product, then those experiences clearly extend much further than just the shopping experience. In IKEA’s case, it extends to the lugging your flatpack furniture home (always in inconvenient shapes), building it, using it over a number of years and then disposing of it later. Value from the customer’s perspective is delivered during longer-term consumption much more than during the initial shopping experience. And it is in the pre, during and post-shopping experience that IKEA increasingly needs to focus on to maintain its advantage.
BRINGING THEM TOGETHER
If experiential brands like IKEA exist in the mind of the customer, rather than in the mind of the marketer, the obvious chalenge for IKEA is to align the two so that what gets communicated, is the same as what gets delivered over the consumption lifecycle, is the same as what customers expect. This is more a case of experiencing the real brand than branding the experience. I think on balance that IKEA has focussed on the initial part of the shopping experience to the detriment of the final part. Queueing, paying and leaving with your purchases is HELL at IKEA. But design, pricing, convenience and immediacy (no waiting 6 weeks or more for delivery) are heaven. Although IKEA rents transport vans cheaply by the hour and will build your furniture for you, it hasn’t paid much attention to the interior design or the end-of-life elements of the experience. Disposal is a real problem in Germany with its consumer-unfriendly waste disposal regulations.
For experiences to be effective, they do have to be branded, but the branding needs to reflect customer-involved reality, not marketer-generated illusions. And the real brand is only just getting started when you leave the IKEA store.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
The statement made in a post on 10/17/07 that ‘Companies have values. Brands don’t.’ is incorrect. Brands are based on the relationship between the companies’ values and the corporate/product/service brand’s attributes (which, in turn, relate to the various served stakeholders’ values, beliefs, ideals and principles). It’s this relationship that creates the Brand Promise (a set of expectations held by different stakeholder groups) that are either met or not met. If the Brand Promise is met, value is created via new customers and repeat business. If it’s not met, value is destroyed via customer, employee and supplier churn. Stakeholders (employees, customers, suppliers, investors, community, etc.) vote on value being met or not met with their dollars and feet. In other words, companies and their brands’ values create value. When there is a lack of Brand Integrity, they destroy value.
Ron Strauss
Brandzone
231 Oakridge Avenue
Atlanta, GA 30317
404.371.8973
[email protected]
“Your brand should work as hard as you do.”
Dear Ron,
Should target brand values be changed according to the different needs in different countries / regions?
For example, despite the selling price of IKEA in China is the lowest amongst the globe and has been reducing more than 50% over the last five years, the mass in China still regard the price of IKEA expensive and they are not buying. It is the middle-class who are buying.
The mission of IKEA’s founder Ingvar Kamprad is to offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them. Low prices are one of the predominant brand values of IKEA.
Ian Duffy, IKEA Asia Pacific President, regards price reduction is the best competitive strategy of IKEA in China. Do you agree?
Sampson Lee
Interesting and engaging thread this, with many highly respected/distinguished individuals posseting what appears to be conventionial brand wisdom.
My own work in this area, which relates specifically to medicinal products, has evolved it’s own definition of brand, which developed as a consequence of interrogating the real sense of brand in the pharmaceuticals arena. The conclusion that my partners and I came to was this:
Branding is the relentless discovery and management of meaning to the benefit of stakeholders.
The brand itself becomes the vehicle for meaning, delivered at various points along the product lifecycle, across whatever channels make most sense to stakeholders (and frequently defined by stakeholders themselves).
Meaning defined here as a feeling experienced by human beings at various points along such important axes as belonging, sharing, understanding, perceiving, associating, finding relevance, feeling inclusion and trust, seeking and seeing value, engagement, attitude, belief, acceptance, receptiveness, expectation and attraction, desire… even love.
Ask the question ‘What is the core meaning of IKEA?’, and you will be hard pressed to uncover answers that go beyond ‘Affordable Scandinavian styling for my home’. People live the IKEA experience. The buying/shopping/in-store experience is almost an irrelevance. IKEA advocates are a tribe of conformists who have little or no home-making style of their own.
Sampson poses a good question.
The answer is ‘yes, I do agree,’ but only if I know the brand’s value equation within a competitive set. Since customers choose, either sub-consciously or consciously who they will do business with based on perceptions of value, value drives choice. Therefore, it is crucial that the value equation for each served segment be defined in a way that is appropriate for that segment. The value equation is BV (brand value) = TA (tangible performance attributes) + IA (intangible emotion based attributes, also called Brand Equity) – P (price). BV = TA + BE – P.
If IKEA’s value equation can be created so as to drive choice within their competitive set, especially when based on their key differentiating brand performance and emotional attributes/values, and their prices set low enough to attract larger numbers of consumers and still be profitable, then you have a recipe for success and value creation. If, in order to attract the masses, you set prices so low that you have negative margins, then you obviously cannot sustain that business model.
In the case of China, however, the mountain is coming to IKEA in that the middle class is growing rapidly. Price reduction within the constraints of remaining profitable while also providing key diffentiating brand attributes/values creates a winning Value Equation and protects IKEA from flanking moves from local competitors.
Ron Strauss
Co-author:”Value Creation: The Power of Brand Equity”
Founder and CEO,
Brandzone
404.371.8973
http://www.newvaluecreation.com
“Your brand works as smart as you do.”(SM)
I had terrible experiences in IKEA store 4 month ago, I called main office of IKEA many times, left messages, but no one reply my call. I still keep the broken product in my home. How bad IKEA treat customers! I have to work full time, and don’t have time to sued them, and I am small customer, IKEA doesn’t care about losing one small customer, but I will speak out to let more people know how bad IKEA treat the customers. And I believe IKEA will lose the all trust in the future.
Here is my story below:
I started shopping in IKEA store in Long Island many years ago. We bought a lot stuff from IKEA before, and liked to support IKEA’s business. But last Sunday(05/02/2010) I had a terrible experience in IKEA store in Long Island.
I bought four clear small storage boxes and with some other stuff for our new home on 04/25/2010 around 2:00Pm. The total was about $73, and $4.99 for each box. I didn’t check each one when I picked four box together, after 3 days when I used them at home I found one in the middle was broken on the top side edge, it is sharp with the broken place, I thought it is not safe for kid using it, so I decided to changed it next Sunday. But I couldn’t find the receipt of April 25th. I went to the IKEA store with the broken box on 05/02/2010 around 2:00PM, I tried to explain to them why I didn’t save the receipt, because what I bought on April 25th were all home care stuff, there were no big furniture, and I didn’t want to return anything what I bought in that time, so I didn’t save the receipt.
Whatever I talked to the manager named Jennet, she didn’t believe me, she said to me “IKEA never put this kind thing on the shelf, and our conversation is over, either way you go home to find your receipt or you bring your thing go home… and you have to step away from the desk, we have to serve next person…”, I didn’t leave because I could not chose which she let me chose and she was rude when she said to me. Then she called the security person of the store to come, his name is Pete, and I explained to him again, I hoped he can understood my situation, but he didn’t want to listen to me, he said loudly and proudly to me “…now you make me angry, you have two choices, one is bring your thing and go home, another is I will call the police….”. Wow! What did I do, did I steal anything from the store? I just wanted to change the broken box which I bought from the store without a receipt. I knew they have return policy, but for some special cases the store should work out with customer to solve the problem but not ordering the customer to bring the bad stuff to go home, the worst calling the police to force the customer to leave the store. On 05/02/2010, two polices came and walked me out of the store in the public on Sunday, and the worst thing was when the police walk me out, the store security guy Pete, he was laughing at me, I asked him why you were laughing, he said to me in front of the polices “It is funny.” I said to him “if you are the customer of other company, and if they treat you like how you treat me, what will you feel? ” He couldn’t answer my question. What kind person he is? I am wondering why IKEA hire this kind people and treat their customer like this. I was treat like thief, I was so upset…
This was my most bad experience of my life. Some day you probably will be treat like this too, who knows…
I am writing this to express my frustruation on my recent shopping experince at Ikea Long Island NY store.
During shopping experience, none of the people who where there to help knew about the furniture in stock and they would not tell about the deals available. One agent said there is a shipping promotion and when we went to deliver the furniture, they said there is no promotion. How can store people have no idea if promotion exists or not.
I had to wait 3 hours for having the items ordered for shipping. This wait was because the manager was busy and the person taking the information was on first day of her job and she was not trained properly.
I had furniture worth $2500 order for home delivery. Upon delivery I have 3 items missing on my order. I was asked to call in the missing orders. On my attempt to call the store, I was on hold for 2 hours at which point my frustruation took over me and I decided to drive to the store. The store is 50 min drive from where I live just to tell them that items are missing. There I was told that the items were still on the cart and they forgot to put it with other shipping.
They were scheduled for delivery on another day. But no phone calls were received for delivery time. Again I decided to call the store. After 4 hours of wait on phone, I finally gave up. The item came late evening.
I have tried on numerous ocaasions to talk to customer service store manager at the local store and instead of addressing my concerns she replied to me “we are doing the best we can” and walked out on me in middle of a conversation. The customer service people act like they are doing favors for us and everything is a bother for them. Seems Ikea has forgotten that customer bring in business and they are not a source of problem.
I love the ikea furniture but my recent shopping experinence has forced to rethink my entire purchase and discourage me from future purchases, which is relly a shame considering the good design and value of the items.
Something has to change in the store to make it customer friendly.
Unfortunately one of the hinges in the Vaerne cabinet was broken.
I sent a mail to the ikea service centre with the request to send a sparepart, I gave them code number and drawing on Thursday and next week Monday the part was delivered from Sweden to the Netherlands.
Many compagnies can learn from this service level!
Louis
The problem is what kind people IKEA should hire to present its store, and what kind service IKEA can provide for its customer, but not only selling the cheaper productions.
After I had terrible experience in IKEA several years ago, I never go to IKEA again. I don’t think IKEA can not provide good services to the customers anytime, any stores! So Sad!
Dear Malcolm,
Thanks for the nice words.
Sampson Lee