IKEA Customer Loyalty Essay
IKEA Customer Loyalty
Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customers. In short, you build customer loyalty by treating people how they want to be treated. There are many ways by which IKEA builds customer loyalty. The goal of the loyalty program is to reward IKEA’s best customers with discounts and special offers throughout the store. The online business of Ikea was developed as a way of generating greater loyalty among the customer base, as it is this that ultimately delivers greater sales and profitability. This was the view of Adri Kraa, head of Ikea Shop Online, expressed at the Retail Bulletin Summit 2009 when he suggested that only five percent more retention through loyal customers could deliver as much as 60 percent more profits. Through a desire to give customers greater “empowerment” and convenience the decision was taken to launch the Ikea online store.
IKEA’s kiosk-based loyalty program IKEA FAMILY has attracted more than 1.6 million members since its launch a few months ago. IKEA FAMILY offers special offers and benefits to customers, as well as program-branded merchandise and promotional events. The Kiosks, which are built, serviced and monitored by Kiosk Information Systems, allow new members to enroll and receive a membership card on the spot. The kiosks also encourage existing members to scan their cards for a chance to win a monthly $100 FAMILY Sweepstakes, as well as view exclusive current IKEA FAMILY discounts and offers. Mobile is playing an increasingly important role for IKEA as it continues to build momentum for its loyalty program. Mobile is a key part of the strategy, with employees using in-store tablets to sign-up new customers and IKEA sending out SMS alerts to keep consumers updated on new products.