IKEA is a leading global brand with a turnover of some €30 billion. IKEA has 315 homeware shops in 27 countries with 135,000 employees
Partly as a result of the financial crisis, IKEA has seen its growth in the Netherlands stagnate since 2009. There is growth amongst people who hold a FAMILY card, but revenue from other customers is falling. The growth of its FAMILY revenue speaks volumes about the loyalty of FAMILY customers.
Yet the FAMILY loyalty card scheme was only marginally given incentives for cardholders. What’s more, the scheme was hardly used at all for targeted communications. This is due to the company’s internal history. The physical outlets themselves have traditionally been the deciding factor for allocating the marketing budget, and the main focus is branding. Apart from above-the-line campaigns and in-store promotions, only a relatively small amount of the budget is released for the loyalty card scheme. And the same goes for omnichannel marketing. IKEA did not have an online shop until 2013.
Within IKEA they are increasingly coming to the conclusion that applying individual customer knowledge, in combination with omnichannel management, is the true key to customer retention and growth. It was in this context that in 2011 IKEA asked Cmotions to develop a new FAMILY strategy. It aims to increase the loyalty of customers and turn around the spiral of negative growth.
Cmotions developed a strategy plan together with IKEA Netherlands. A central part of this was developing the required skills, employees, systems and processes. The new strategy plan is helping to achieve the following ambitions:
Based on SMART-formulated customer targets for the 2012-2015 financial years, Cmotions developed a roadmap to move from the current to the desired situation. A major starting point for this is to integrate the various channels as much as possible, so that customers have a seamless, personalised and consistent brand experience.
Cmotions was ultimately responsible for professionalising the Fact-Based Marketing process, by:
Because the FAMILY database had not been particularly well maintained for a long time, the data quality was low. It required a lot of restoration work. Some sources also needed to be combined to create a complete customer picture:
Work started in 2012 to restore and restructure the Fact-Based Marketing process. Cmotions provided the architecture and project management to implement this extensive plan. But we also provided advice and were responsible for deploying and directing interim specialists. They worked using the scrum technique.
A key component for restructuring the Fact-Based Marketing process was for senior management to designate an owner of the FAMILY loyalty card scheme, to include responsibility for the FAMILY data warehouse. It was not clear what results could be expected, so it proved to be a challenging change in management. There was also increase in expectations amongst the country management to deliver visible results.
At the same time as restructuring the FAMILY data warehouse, Cmotions also oversaw the development of a reporting environment. This incorporated the KPIs and KRIs of a programme developed for dialogue marketing, with e-mail marketing as its primary channel.
The period of implementation went on until August 2013. At that point the programme’s roll-out could begin, consisting of Value Management Campaigns that were carried out simultaneously. Cmotions acted as its Campaign Manager, architect and executor.
The results surpassed expectations: we can measure substantial growth that is attributable to the event-driven campaigns, and we can establish that these do not cannibalise the “regular shop business”. The outcome also led to an owner for the FAMILY data warehouse being found quickly and the loyalty card scheme is continuing to hold greater value and status within IKEA.