Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
Paula: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from Loyalty Specialists around the world.
Paula: So welcome to 2021.
Paula: Let’s Talk Loyalty is super excited for an incredible year ahead.
Paula: And what a better way to start the year than having an interview with an iconic customer club for an iconic retail brand.
Paula: And in fact, my guest today is Aaron Mitchell, who is the global vice president of customer engagement and loyalty for Ikea Group Worldwide.
Paula: In fact, the world’s largest furniture retailer.
Paula: So Aaron Mitchell, first and foremost, welcome to Let’s Talk Loyalty.
Aaron: Thank you, Paula.
Aaron: Happy new year.
Aaron: And I’m very excited to spend some time with you digging into one of my favorite topics, loyalty.
Aaron: So super happy to be with you.
Paula: Great, thank you so much, Aaron.
Paula: And I know you have lots of favorite topics already from the various things we’ve discussed.
Paula: So I’ll be super excited to talk about everything that Ikea is doing around the world.
Paula: There’s an extraordinary number of markets that you’re leading loyalty for.
Paula: So I think particularly the reason I wanted to talk to you was, I suppose, the global perspective that you have, and I think also the incredible, just the sheer size of your base.
Paula: So the last time I checked, Aaron, you were crossed 150 million members.
Paula: So what is actually your updated membership number at this point in time?
Aaron: Exactly, I always joke with people whenever I speak to them.
Aaron: I need one of those running clocks, because the minute I say the number, it’s instantly out of date.
Aaron: So to be last spoke, we actually are now on an incredible 156 million members, which makes me super humble and blows me away every time I say that statistic.
Aaron: I started with Ikea 13 years ago in the store, looking after loyalty and local marketing.
Aaron: And back then, I think we were like 30 or 40 million members and now 156 million, it’s truly incredible.
Paula: Well, I’m glad you’ve just explained it so beautifully, Aaron.
Paula: And you should be super proud, of course, because at the end of the day, the Ikea brand, I think in itself, we all have a very fond place for it in our hearts, just purely because it’s just such an extraordinary retail brand.
Paula: But the fact that you’ve managed to create this family concept is something that I think is gorgeous in a very different but very special way.
Paula: So I will really look forward to getting into that with you.
Paula: So, as you know, we always start the show with our favorite statistic, Aaron, and that may already be your favorite loyalty statistic, because it would be if it was my program.
Paula: But tell me, do you have another?
Aaron: Yeah, this is your killer question, and I have to say, fully transparent, I really struggled to nail it to one.
Aaron: And I went through like a process of elimination in a way of like, of course, I’m super proud of 156 million.
Aaron: But actually, it might sound a bit obscure, but my one of my favorite statistics right now is actually around consent and data.
Aaron: And the reason for that is without data and without consent, we have nothing to offer our members because we want to use that data to create value, but we want people to trust us with their data.
Aaron: And I think for being a brand that stands for the many people and creating a better everyday life for the many people, for me, it’s an indicator of how much the people trust us because I’m sure you as a consumer, I will be fully transparent.
Aaron: I don’t always share my data honestly with every brand because I’m skeptical.
Aaron: Will I get spammed?
Aaron: Will I, you know, what are they gonna use my data for?
Aaron: So for me, it’s a lot around the consent and data quality for me is like one of my favorite because that is really where you can create value for people.
Aaron: Of course, there’s others like share of sales, interactions, engagement, advocacy.
Aaron: And I went through all that process of elimination.
Aaron: But for us right now, we have launched a data, a customer data promise, which is what we promise our customers related to data.
Aaron: So for me, it has to be a loyalty metric about that because for our most loyal customers and members, we need to make sure we provide the three pillars of that promise, which is value, control, and simplicity.
Aaron: So simplicity on how your data is used.
Aaron: So you fully understand what we use your data for.
Aaron: And for a brand that is for a better everyday life at home, then how do we use data to not just sell you more things, not just fully commercialize, but actually how do we use data to help you have a better life at home?
Aaron: You know, data that could help you save money on your energy bills, have a smarter home, change, you know, have a better, healthier lifestyle.
Aaron: So for me, that’s why I stick with that sort of statistic, which you might not have been expecting that one.
Paula: Totally wasn’t, Aaron, no.
Aaron: But I like to keep people surprised.
Aaron: But I also think as a brand that is very humanistic, stands for people, we want to humanize data.
Aaron: We want to respect the individual that’s behind data.
Aaron: And for me, that is the essence of the brand.
Aaron: We want people to feel as safe in the online world as they do in their home.
Paula: And you know, Aaron, I’ve often said it before, that’s the kind of thing that I think customers feel sometimes more than see.
Paula: And I know that’s hard to articulate maybe in terms of, you know, presenting it maybe to the C-suite in terms of your strategy.
Paula: But I fundamentally as a consumer do trust the Ikea brand.
Paula: And it’s because you have that clear intention it comes through in every single interaction that we have with your brand.
Aaron: Absolutely.
Aaron: And when we’ve been researching on how could we make our club even better, and also we’ve been designing a second customer club for business customers, because of course that’s another opportunity area for us to help people have a better life at work as well as home.
Aaron: One of the things that really came true is, like you say, is the trust people have in the brand, but also in some cases, the expectations.
Aaron: So when we ask people, should Ikea move into this type of service or should we move into these areas?
Aaron: A lot of people are, I would expect Ikea to do something like that.
Aaron: Because if we are helping people to live better with our amazing products, our smart solutions and our tips and ideas for a better life at home, then we should be supporting all aspects of that.
Aaron: In order to do that, we need to understand you as a member, what are your preferences?
Aaron: What are your interests?
Aaron: What are your needs?
Aaron: And then I see that as a privilege, but also a big responsibility as a global brand with many local accents.
Aaron: So we’re in 30 countries in the group I work in, is how do we promise, sorry, give that promise back to people?
Aaron: So if they trust us with our data, we have, I see as a duty to really live up to that and to help people live better through understanding their needs, their preferences.
Aaron: And I don’t know if it’s the same for you, but we’re not perfect.
Aaron: We will test and learn.
Aaron: But there’s many brands that I think don’t start in that entry point.
Aaron: They look at how do I collect more data to just sell more things?
Aaron: Of course, that’s a commercial outcome, but our point of view is how do we get the right amount of data on your needs at the right intervals in your journey?
Aaron: So it’s not always about more data.
Aaron: Sometimes it could be less, but it’s the right data.
Aaron: Or the right insights.
Aaron: So we can actually help you as an individual solve those problems you face in your home for a better everyday life.
Aaron: So it’s kind of bringing that brand purpose into everything that we do.
Paula: Yeah, and I think you’re right, Aaron.
Paula: And in fact, the distinction I would make is, some brands focus on their loyalty strategy to drive sales, as you said, but in a short-term way.
Paula: You know, it’s very reactive, and they’re looking to drive immediate commercial benefit.
Paula: Whereas what inevitably happens with a purpose-led brand like Ikea is it actually drives longer-term sales, but it’s actually because you’re satisfying needs, and it just feels much more, you know, just much more holistic, and it really just drives the overall business, because then you get the referrals, you get all of that lovely brand benefit on top of it.
Aaron: I agree, and that’s kind of when we look into what is our sort of direction for customer engagement and loyalty at Ikea.
Aaron: You know, we want to transform and, you know, create the future of what customer engagement and loyalty at Ikea could look like.
Aaron: And it starts with our vision.
Aaron: You know, our vision is to create a better everyday life for the many people, and that inspires us in so many ways, and that vision has been with us since the company was founded back in the 1950s.
Aaron: So Ingvar was such an inspirational thinker to really think longer term, and that vision you’re never going to be done with because, you know, what you create will always change, better will always change, and as we know, even in the last nine to ten months with the pandemic, everyday life is changing.
Aaron: So how do we bring that vision into everything that we do?
Aaron: And then within engagement and loyalty, our sort of direction is we want to create meaningful and rewarding Ikea customer relationships that create lifetime value.
Aaron: So we talk lifetime value, not just one-off purchases.
Aaron: And we have three big movements that we want to make.
Aaron: The first is, no surprise based on my statistic, how do we unlock customer value from our data?
Aaron: So notice we say unlock customer value, not how do we unlock business value?
Aaron: Because if you create value for the customer, you create value for the business.
Aaron: So it’s about how do we get to know customers and our members, their needs, their preferences and their wishes for their life at home?
Aaron: And then how do we unlock value for customers whilst building trust?
Aaron: So that is a huge pillar for us in our sort of strategy.
Aaron: The second one is, as you said earlier, we are an iconic brand, but I would be honest to say maybe Ikea Family is not the most iconic customer club today.
Aaron: It’s still in some respects too much of a transactional relationship, so how do we deepen that?
Aaron: We want to create iconic customer clubs and experiences.
Aaron: So building what we call truly member-centric clubs, experiences and connections, because going beyond just a loyalty program is also about the connection.
Aaron: So 156 million connected members for me would be incredibly inspiring if you could learn tips and ideas from each other for a better life at home.
Aaron: And here this is about how do we sort of create these genuine, personal and rewarding and long-lasting relationships with each member.
Aaron: And as we said, we have decided not to follow the industry around points, and I’ll come on to that a little bit later.
Aaron: It’s to really understand what is a rewarding relationship.
Aaron: That is not, because for me, points can be super transactional.
Aaron: And of course, they’re a good mechanic, but actually is that really building a rewarding relationship?
Aaron: Are you solving the problems that members have for their life at home by just giving them rewards?
Aaron: In a way, you’re giving them a currency, but actually you’re not helping them to use that currency because we’re not solving the fundamental problem.
Aaron: And when we looked into this, the key insight is people want a better life at home.
Aaron: They don’t always know where to start and the home is never done.
Aaron: So if I don’t know where to start and I keep sending you more rewards of like, here’s your points, here’s your points.
Aaron: Now buy and buy and buy.
Aaron: My biggest need is by what?
Aaron: I don’t know where to start.
Aaron: You’re not solving that problem.
Aaron: So I’ll come on to a little bit of that later where we’re taking sort of a different route.
Aaron: And then the third and final pillar of our strategy is how do we build personalized and engaging moments?
Aaron: And there’s always been this shift or this discussion in this industry of like shifting from one to mass to one to one.
Aaron: And we take a slightly different view where it’s actually from one to mass to one to moment.
Aaron: Because those moments could be many.
Aaron: And you could scale those moments.
Aaron: But it’s really understanding what context is a customer or member in their journey.
Aaron: Where are they in that journey?
Aaron: How do we tap into that and create these highly contextual and personalized moments?
Aaron: And really responding to the many different transactional or behavioral data signals or triggers.
Aaron: So I go back to my other one around data.
Aaron: All of these signals are clues and insights into what people are doing.
Aaron: But how do we use those clues and insights to create true value for people?
Aaron: So if you see with those three pillars, it’s really unlocking value from our data, creating iconic clubs and experiences, and making it super personal and engaging every time someone interacts with us.
Aaron: So big ambitions.
Aaron: I would love to say we’ve delivered all of it, but we’re not.
Aaron: We’re on our way.
Aaron: And one of our values that Ingvar came up with is a glorious future.
Aaron: Most things remain to be done.
Aaron: And we certainly live by that as well.
Paula: Yes, you’re a busy man, I can tell, Aaron.
Paula: Yes.
Paula: And with those pillars, actually, just even to go back to your statistic, Aaron, because I really liked the principles of value, control and simplicity.
Paula: And I think there is a huge amount of inherent complexity that we as loyalty managers struggle with in individual countries, never mind the 30 countries that you’re managing.
Paula: So simplicity for the consumer is an incredible goal.
Paula: And I think I mentioned to you one of my most listened to podcasts is on the theme of how simplicity drives corporate value, which was an incredible concept, but clearly Ikea is very clear on that.
Paula: And I wanted to understand maybe how do you plan the control part?
Paula: Is that, I suppose, it sounds like an intention for the member to be able to control their own data in terms of what you have and what they receive.
Paula: Is that what you mean with control?
Aaron: Exactly.
Aaron: And of course, they’re all linked, right?
Aaron: So each of those three parts of our promise are linked.
Aaron: So the outcome is value.
Aaron: So we always start with that because that is, for me, the sort of reason why you would ask for any sort of data is what is the purpose and use of that data to create value.
Aaron: And that value could mean many things.
Aaron: It could be a more convenient shopping experience, more personalized care and support.
Aaron: So the value always isn’t a promotion or a coupon or a voucher.
Aaron: In some cases, it could be.
Aaron: But we go way beyond that and think about true value.
Aaron: Then the second one is simplicity.
Aaron: And for me, simplicity and control are very connected because we need to make it simple for people to understand why and what we will use data for and not confuse people with legal text or that you need to hire a solicitor to try and interpret these terms and conditions.
Aaron: As a brand that is very humanistic, very simple, our philosophy is how do we really bring that into this often complicated and by many perceived to be distrusting world?
Aaron: Because if you have all these legal texts, for me as a customer, it’s like, what are you hiding?
Aaron: Where of course the intention, many cases is, well, if we go all through this legal text, we’re being very transparent to people what we’re using data.
Aaron: But for me, there’s a big difference between transparency and simplicity.
Paula: Yeah, very much so.
Aaron: And this is kind of where transparency is GDPR compliant, and you do all the legal text.
Aaron: For us, that’s just a baseline.
Aaron: If we really want to be ethical, then we need to make it super simple for people to understand.
Aaron: And also, be honest as a brand, we’re not going to get everything right straight away, but if we have the good intentions and if we are transparent as a starting point, but really make it simple, and then the control is then, I believe, if you give people that control, they’re more willing to share because they will see the value.
Aaron: And of course, to be very clear, there are some things as a customer that you might not be in control of because for tax or legal reasons, we need to keep some traces of data to be legally compliant.
Aaron: So, you know, for invoicing and for tax reasons, we need to keep certain fields.
Aaron: But how do we make that very simple for people to understand?
Aaron: And then I truly believe if you give people control, then I think you will get much higher quality data.
Aaron: And our goal is not to just get more data, because I think anyone can chase that.
Aaron: What we are after is quality data that helps us to unlock value for people.
Paula: Super.
Paula: And certainly, I think it’s still very rare, Aaron, for any brand to have solved that ability to give the customer control, because I have seen it in such rare places.
Paula: And again, I talk to so many loyalty managers, and literally all over the world, as you know, and so few have managed to just get the tech to work in a way that the customer can access and, as you said, delete it or keep it or at least understand what’s there.
Paula: But for me, when I do see it, there’s an instant elevation of trust.
Aaron: You’re absolutely right.
Aaron: And for us, as I said, I would love to say we’ve solved all of these problems, but we haven’t.
Aaron: We are testing different ways.
Aaron: And one of the ways, we have an app that we’ve now made shoppable.
Aaron: And as part of that development, we also started to test about how to make it easy for people to create a profile that we’re not asking all of these questions up front.
Aaron: So, you know, there’s this other thing about how do you progressively profile, which when you think about progressive profiling, it doesn’t sound very customer friendly, because it’s kind of, again, how do you put that into customer words, which would be, tell us what you want to tell us about your needs at the speed and pace that you feel comfortable.
Aaron: And the main reason we would like to know, like, what’s your next home furnishing project, so that we can make sure we don’t spam you, that we actually send you information or we give you the right support or services that you truly need.
Aaron: So we have been testing a number of different things about in some of our emails, we’ve been testing, you know, are you curious as to why you’ve received this email, find out more.
Aaron: And also, as I said, with the Ikea app, how do we create a simple scalable profile?
Aaron: And then at the right intervals in a customer journey, we ask for different information.
Aaron: And, you know, being a brand, again, that covers many different aspects of life at home, having a clear standpoint on data ethics when it’s related to children’s data and to us, for me, that is, you know, we have to take our responsibility here and make sure that again, everything we do is to build trust with the brand, but also, if I go back to, we want this meaningful and rewarding relationship that gives you lifetime value, for me, you have to live up to that.
Aaron: And that you would not do if you use data in an unethical or in a non-value-adding way.
Paula: Yeah, but also I love the fact that you are doing progressive profiling.
Paula: And again, I think you are very much at the very leading edge of loyalty.
Paula: There are very few brands that I see that have fully grasped how respectful the customer, I think, feels when you do ask me for the minimum, let’s say, to get started.
Paula: I think there’s almost a sense of, yes, I’m happy to give you my data, but actually I’m just in a rush to complete a task right now.
Paula: So, you know, this sense of it almost feels like the brand is just being greedy and that they have this one shot opportunity to capture my data.
Paula: And I’m kind of going, like, relax.
Aaron: No, I fully agree.
Aaron: And I would say we were there before.
Aaron: So again, like I said, we don’t get everything right and we’re not perfect.
Aaron: So before we had this approach, I mean, if you joined Ikea Family, I think you asked something.
Aaron: It varied across countries, but something between 10 to 12 questions just to sign up to be a member.
Aaron: And you’re almost kind of like, I’m done.
Aaron: I just want to sign up.
Paula: Yeah, exactly.
Aaron: It’s almost because in some cases we didn’t have the digital products or solutions to capture that information.
Aaron: But now we do.
Aaron: And now we’ve also been testing other things like we call them handraisers.
Aaron: So we ask people, raise your hand if you’re interested in this topic.
Aaron: So we have this amazing range now called Ikea HomeSmart, which is about the connected home.
Aaron: You have sound, you have…
Aaron: There’s an air purifier, there’s blind.
Aaron: So it’s all about through a Ikea hub, how you could have a smarter home.
Aaron: And we tested again handraisers to say, maybe not everyone is interested in that straight away.
Aaron: So instead of us pushing it out, let’s actually respond to signals.
Aaron: So we’ve done some tests around handraisers for that.
Aaron: We also did a hand raiser test for, do you want to learn how to have a more sustainable and healthier life at home?
Aaron: Are you about to move home?
Aaron: So again, sort of showing that as a brand, we also want to be more led by the customer, if that makes sense.
Aaron: So how do we respond to those signals?
Aaron: And I think by asking people, that’s also another way of saying, you’re still in control, because you can tell us you’re interested or you could tell us you’re not, and we respect that, and we will only react to people who tell us that they’re interested.
Aaron: And for me, that’s one way of simplicity, but also control.
Paula: Yeah, yeah.
Paula: And I went through the registration journey today, Aaron, you’ll have to forgive me.
Paula: I hadn’t joined the UAE family program.
Paula: I was a member in Ireland previously.
Paula: So what I loved actually, and it’s a minor point, but again, it just felt very respectful.
Paula: And I initially was on the.com website and the generic list of titles there for joining.
Paula: There’s actually a fabulous list of 14 titles.
Paula: So I could choose if I was a lord or a lady or right honorable.
Paula: I just thought it was extraordinary that there was opportunities to say, I’m a miss, I’m a missus.
Paula: And there was an MX, which I’m thinking is something I’ve never seen before, which I’m guessing is for people who prefer not to say mister or missus.
Aaron: Exactly.
Aaron: And I think again, as I said, being a democratic brand, we are for the many people.
Aaron: And that’s what I love about the brand is that we are for everyone.
Aaron: We don’t exclude anyone.
Aaron: We are a very inclusive brand.
Aaron: And I think that that was kind of what Ingvar’s vision was, because actually it was Ingvar’s idea to create Ikea Family, believe it or not.
Aaron: So it was his sort of baby in a way, or his idea of how do I…
Aaron: And he is super smart.
Aaron: This was back before any digital solution.
Aaron: Ikea Family first launched, I think, nearly 40 years ago in a number of countries.
Aaron: And you can imagine that was not a digital experience or a digital…
Aaron: Even before email really existed as a way of communicating to customers.
Aaron: So what I love is he had that vision for the many people, but at the core of it, he knew that actually loyalty is super important to build the brand, to sort of advocate the brand.
Aaron: And he wanted to find a way of creating something special for our loyal customers.
Aaron: And that’s why it was called Ikea Family.
Aaron: It was his idea to call it that, because it’s about being part of the family.
Aaron: And of course, many people might get confused and think, oh, I don’t have a family, so it’s not for me.
Aaron: But of course, it’s about be part of the Ikea Family.
Aaron: And for me, that is what we mean of like, it’s free to join, anyone can be a member.
Aaron: So we have benefits that are only for members.
Aaron: We have certain exclusive things that are for members, but we always say anyone can be a member.
Aaron: And I think that for me is quite special, that when you think of a customer club and a democratic brand, this is our sort of way of answering that it’s not about exclusivity.
Aaron: It’s about being a member, but also being part of something, but anyone can choose to join.
Paula: Wonderful.
Paula: And it’s a perfect segue actually, Aaron, into the overall value proposition, because obviously so many retail brands do depend on points as a way to track, recognize and reward.
Paula: And you’ve been very clear in our conversations that you’ve never done points, you never will do points.
Paula: So what are the benefits for joining Ikea Family just so that other retailers can get a sense of what can you offer, you know, that adds that extraordinary experience?
Aaron: So it starts with our proposition.
Aaron: And we actually, about a year and a half ago, we updated the proposition.
Aaron: So we went through a rebrand of Ikea Family and we decided that the hero of any communication of our club is the member.
Aaron: And again, taking a humanistic approach is the hero is the member, and the story we want to tell is how they’ve accomplished their dream for their home.
Aaron: So we ended up redesigning a new value proposition that we researched with, I think it was seven different countries from Asia to Europe to North America.
Aaron: And what came through is the universal insight, as I said earlier, is the home is never done.
Aaron: You’re always continuously wanting to improve your home.
Aaron: And the biggest barrier is members lack the confidence or the support to bring that idea to life.
Aaron: So we ended up designing a new proposition, which is basically we say Ikea Family is a club for you and everyone who wants to make life at home better.
Aaron: So it’s a club of like-minded people.
Aaron: And when we stay home, we obviously mean the physical walls of where you live, but it’s also community and the planet.
Aaron: So home has a broader context.
Aaron: And then the core of it is that if you want to be a member, that’s sort of the entry point.
Aaron: And then we want to give you access to what we call exciting rewards and benefits that connect you with Ikea products, services and experiences.
Aaron: And our main sign off is that we say, so together, we bring ideas to life.
Aaron: And that’s our promise is together, we bring ideas to life.
Aaron: So we then started with the proposition, and then we have our sort of pyramid of membership.
Aaron: So the baseline is benefits, and they are for everyone.
Aaron: So there’s no, whether you come once a year or 10 times a year, benefits are for every single member.
Aaron: And they are there to sort of support you through your shopping experience.
Aaron: So we have benefits like product discounts.
Aaron: So there’s around 50 member monthly offers, and they are based on seasonality.
Aaron: So you would hopefully see more product offers around entertaining and celebrating at this time of the year, and maybe some more around outdoor living in the summertime.
Aaron: So we want to give members a special price on some of our products.
Aaron: And this is you get up to 25% special price.
Aaron: Then one of the most appealing benefits that everyone loves is you get free tea and coffee every time you go to Ikea.
Aaron: And the reason being, of course, is it’s an experience and an event to go to Ikea.
Aaron: Some people want to go in and out fast.
Aaron: That’s absolutely fine.
Aaron: Some people want to spend a bit more time.
Aaron: And the restaurant is a great place where you can take some time out after browsing the showroom for all that inspiration, have your coffee, have your tea, gather your thoughts, and then continue on your sort of shopping journey.
Aaron: And then we offer things like product insurance.
Aaron: So if you break an item, either taking it home or assembling it, we replace it, no questions asked.
Aaron: So we sort of designed like what would be some foundational benefits.
Aaron: Another one is things like exclusive workshops.
Aaron: So how could we share home furnishing knowledge?
Aaron: Because again, if it’s a club to help bring your ideas to life, and one of the barriers is people don’t always know where to start, then an amazing way is to give benefits, to share our home furnishing knowledge, tips and ideas.
Aaron: Again, helping people going from ideas to action.
Aaron: And then we have rewards.
Aaron: So we’re testing actually a new way of doing rewards.
Aaron: And we’ve been testing in Spain and Sweden in a small scale at the moment to think about some more personalized rewards.
Aaron: And again, it’s not about points.
Aaron: It’s actually about how could people unlock more value from Ikea.
Aaron: And here we’re focusing a lot more on services and support.
Aaron: So could you unlock more help on home furnishing advice?
Aaron: Could you get a personal home furnishing appointment?
Aaron: Could you get…
Aaron: So we’re really trying to understand how any type of reward could be meaningful for people.
Aaron: And really, how do we move from seeing people as just like 2.9 transactions a year to being part of every step of a member’s journey to bring their ideas to life.
Aaron: So that’s kind of what we look into there.
Aaron: And also simple things like if it’s your birthday, you get a free treat from Ikea.
Aaron: So there’s the whole sort of rewards and recognition that’s in there.
Aaron: And then at the top of our pyramid is then the community.
Aaron: And this is again, how do we bring together 156 million members?
Aaron: Not an easy task.
Aaron: One of the things we’ve been innovating around is a sort of digital clubhouse concept.
Aaron: So how do we bring members so that they can inspire and enable each other through their own tips and ideas?
Paula: Yeah.
Aaron: So we’ve identified a concept called a clubhouse or in Swedish we call it klubhus, of course.
Aaron: And here we have three audiences in mind.
Aaron: We have the superfans.
Aaron: So these are people that have high competence and confidence in home furnishing, really want to share their ideas and really want to take challenges on how could you make that awkward space work better for you or what do you have tips and ideas to reduce your wastage or energy.
Aaron: So it’s all aspects of life at home.
Aaron: Then we have our amazing coworkers who are the best brand ambassadors.
Aaron: They are amazing how they show up every single day and give great experience to our many customers.
Aaron: So also how could our coworkers contribute to this?
Aaron: And then the biggest audience is our many members.
Aaron: Because I think if I would be super inspired by Paula, seeing you in your home and actually learning, how have you solved this problem?
Aaron: Because it’s not just, I think personally, no more is it just about a brand to a customer.
Aaron: It’s actually about what’s the common problem.
Aaron: And actually, I want to be part of a community or part of a conversation that sometimes can be branded, sometimes can be facilitated by the brand, but I also want to hear from real people.
Aaron: And that’s really the concept of the Clubhouse is, I always think, imagine during times of COVID, the amount of great tips and ideas people could have shared with members all around the world of like, this is how I solve my problem for homeschooling, or this is how we managed to make the kitchen worktop become a mobile office for the day.
Aaron: Because we had to do so many more different tasks in our home than we ever anticipated.
Aaron: And I think for me, that’s really where the power of the many, the sort of power of the brand is about democratizing home furnishing.
Aaron: We don’t want to keep that knowledge for just ourselves.
Aaron: We want to share it with everyone.
Aaron: And we want everyone to live better.
Aaron: And I think a community or the clubhouse is an amazing way to sort of bring that experience to life, but also how we can connect members to each other.
Aaron: And I think a lot of people, when we did customer experiments into the concept, people loved it because it’s about real people.
Paula: Sure.
Paula: And in fact, Aaron, I did an entire episode about community as well as a concept to drive loyalty.
Paula: I’m totally with you.
Paula: And I said to you already, the reason I called this show Let’s Talk Loyalty and not Let’s Talk Loyalty Points was exactly to get to these underlying principles.
Paula: Again, I’m hoping all of the listeners might be prompted to go, well, hang on a second, how can I connect my members to each other?
Paula: That’s what I’m hearing the Ikea Family is doing.
Paula: And I think you mentioned to me as well, Aaron, you literally launched that digital clubhouse two weeks ago, or when was it?
Paula: Mid-December?
Aaron: No, actually on 17th of November.
Aaron: It’s a closed community test at the moment, so obviously we’re working through our innovation phase, so it’s sort of an MVP.
Aaron: So we’re testing the desirability with people.
Aaron: Can it be a way of connecting?
Aaron: Could we help us to recruit new members?
Aaron: Could it help?
Aaron: So we have some sort of goals that we want to achieve with the clubhouse, that we want to understand, does the clubhouse inspire members to explore and share new ways of using our products, but also their life at home needs?
Aaron: Does it also help members move from inspiration to action?
Aaron: Do the members also feel like they belong to a community and do they also appreciate the sort of recognition in that?
Aaron: And of course, there’s the whole commercial and brand side of it.
Aaron: Does it actually strengthen the position of the brand and what could be the commercial opportunities?
Aaron: But the main thing is about how could it be inspiring enabling and recognizing as a concept.
Paula: And am I right in guessing Aaron, are you doing the MVP in the UK market?
Paula: Is that right?
Aaron: Yes, we are.
Aaron: We’re working with the fabulous agency RGA who have been with us on a number of projects.
Aaron: They helped us to redesign the value proposition for Ikea Family.
Aaron: They also helped us to design our second customer club for business customers.
Aaron: So how do we identify a meaningful role to play in the small business community?
Aaron: Because that’s the one that’s being hit the hardest during this pandemic.
Aaron: And as a brand that sides with the many people, how could we play a meaningful role in our business customer club to really help people do business their way?
Aaron: And again, it’s people-centric.
Aaron: So when we designed the business customer club, it was again, what are the needs?
Aaron: What are the insights?
Aaron: And let’s not just say we take everything that Ikea Family is for private customers and we just replicate it for business customers because the needs are different.
Aaron: So that’s really…
Aaron: And again, we will launch that second business club early next year in three countries and then we’ll scale it after that.
Aaron: And we launch with the sort of foundation benefits, basic experience.
Aaron: But again, what could be the business community angle?
Aaron: So again, tips and ideas on how to do better business, how to…
Aaron: Because again, we met with small business owners and they have specific challenges.
Aaron: They can’t develop their talent, they can’t retain their talent like global companies because they don’t have the resources.
Aaron: So how could we use the power of the Ikea brand to help those business customers?
Aaron: So could we provide knowledge?
Aaron: Because we set on a lot of knowledge of supply chain, retailing.
Aaron: So could we share that knowledge?
Aaron: And could we use the power of the brand to support them with benefits through partnerships that means they can give their coworkers perks?
Aaron: Because as a small business owner, you’re really stuck with the perks that you can give people.
Aaron: And for me, the hero of any small business is people.
Aaron: Without people, you have no business.
Aaron: So how do we really side with the many small business customers that they started a business because of either a passion or an idea.
Aaron: Not every goal of a small business customer is to go for the highest level of turnover.
Aaron: They, of course, need it to be profitable, but their main driver is their passion.
Aaron: So that’s why we always say, how do we help you do business your way?
Aaron: We’re not here to tell you what your business should be, but we’re here to help you do business your way because it’s your business, not Ikea’s.
Paula: And again, I will make sure we link to RGA in the show notes as well, Aaron.
Paula: I can tell it’s fabulous when you have a marketing agency with such extraordinary expertise.
Paula: So I love that you have that amazing relationship clearly coming through.
Paula: And it comes through in the work that you’re doing.
Paula: And I was just kind of smiling to myself actually when you mentioned your various groupings of people within the digital clubhouse actually, even before we talked about the business side, because you mentioned your super fans and I’m probably not in that group.
Paula: But I love the fact that you have included the coworkers and the entire Ikea direct family, let’s call it, in terms of your own people.
Paula: But also during the pandemic, I guess my biggest challenge in terms of my home was definitely a very niche problem as a podcaster.
Paula: How do I podcast at home?
Paula: So, you know, I haven’t yet seen a podcast studio in an Ikea showroom for good reason, but I can absolutely see that’s where the many members and the scale of connecting with the community would be exactly where I would be able.
Paula: You know, if I was in a situation like that again, to go, I bet you somebody in the Ikea family can tell me how to resource my home to suit my podcasting needs.
Aaron: Absolutely.
Aaron: And that is the main idea is that, you know, we have some ideas or challenges that we think is a brand, but of course, there’s many other challenges.
Aaron: And the whole point of the Clubhouse is to make sure members can ask each other, connect with each other, because for me, that is far more valuable than just points.
Aaron: Like in some of the airline industry with like the tier system and all of those things, sometimes you just need to turn to people for advice or help.
Aaron: And if you think about the whole ratings and reviews, people trust more customer endorsements than what brands say.
Aaron: I do the same.
Aaron: So whenever I look at something, I always look at what’s the highest rated product, what’s the latest opinion.
Aaron: So imagine if you could ask a community and you’d be the same of like, hey, I’m stuck.
Aaron: I need to continue to do podcasts.
Aaron: And I’m sure you wouldn’t be the only person out there who would have the same problem.
Paula: Yeah, absolutely.
Paula: And I think what it’s delivering for you as well, Aaron, or will deliver, is that whole concept of emotional loyalty.
Paula: So as you’ve said, it’s beyond transactions and you’re already delivering that clearly in terms of the incredible benefits.
Paula: And I have to say, I was particularly impressed with the, I suppose the combination of the free insurance that you mentioned, which is just so reassuring because I’m not brilliant on the assembly.
Paula: I have to confess.
Aaron: You’re not alone there, Pauline.
Paula: Yes, yeah.
Paula: And I presume you’ve seen, by the way, there is a lovely picture going around on Facebook, which is a picture of a box of pine needles with humor saying it’s the Ikea Christmas tree.
Paula: So I’m sure.
Aaron: Exactly.
Paula: I’m sure that’s taken with the spirit that it’s meant.
Paula: But listen, yes, definitely emotional loyalty coming through and clearly even on the birthday piece because I’ve often said that so many brands do capture that data for their own, again, maybe greedy purposes to understand the demographics and forget to give back on that special day.
Paula: So super happy to hear that you’re doing that.
Paula: So my final question for you, and I could ask a hundred more, but I’m trying to keep myself within our time slot.
Paula: Innovation is a passion I know that we share, and you’re already doing so much that you’ve talked about.
Paula: Is there any other area that Ikea is doing or Ikea Family is doing?
Paula: And actually I might even prompt you because I did see my favorite statistic about Ikea in preparation for our chat today, which was around the catalog.
Paula: Which dare I say is going through a massive change.
Paula: So maybe you would tell the listeners exactly what is happening with the Ikea catalog.
Paula: And just even before you do that, the statistic I saw, or in fact I think you gave me is, at the height of production, your catalog was 230 million copies in print.
Paula: Am I right?
Aaron: Yeah, so it was over 200 million copies in one annual year.
Aaron: And I think as we delicately say, we turn the page, it’s a really nice metaphor because, I don’t know if you know this, but the first ever catalog actually was handwritten by Ingvar.
Aaron: It’s an incredible story.
Aaron: And this was back in 1947, or just at the turn of the 1950s.
Aaron: And it was a couple of hundred thousand copies were printed, even back then, in southern Sweden.
Aaron: And the whole idea was, you know, about Ikea started as a mail order company, believe it or not.
Aaron: We didn’t have our first store until the mid 50s.
Aaron: So we started in mail order, and Ingvar was an incredible entrepreneur.
Aaron: And I had the pleasure of meeting him a couple of times.
Aaron: And you could just listen to his stories all day about, you know, he really listened to customers.
Aaron: He could just tune right into what customer needs were.
Aaron: And I think the catalog became this sort of iconic symbol of a sort of statement from Ikea each year of what we see as the latest sort of movements in home furnishing.
Aaron: What is the new range coming in?
Aaron: And sort of a way of sharing our amazing home furnishing knowledge and solutions.
Aaron: So it was never designed to really be a catalog like other.
Aaron: Like if you’re familiar with the brand Argos, where it’s like an inventory of everything that we sell, it was to be a little bit more inspirational.
Aaron: And then, of course, digitalization exploded.
Aaron: And then we needed to think about how does the catalog sit within this fully digitalized world.
Aaron: And we did a number of different tests in many different countries about different ways to distribute the catalog or the content.
Aaron: And what really came evident in all of these tests is that actually people are looking for daily inspiration.
Aaron: People are searching for tips and ideas at that moment.
Aaron: And I think digitalization has made that demand even faster for people.
Aaron: You want that instant gratification of I have this problem, how do I solve it?
Aaron: And then I really see things like our clubhouse, things like a more personalized experience and content is going to be the future of how we still take the essence of the catalog.
Aaron: Because the catalog was a channel in a way, but it also was a concept.
Aaron: And the concept was about an inspirational guide for people for their home.
Aaron: So how do you take the, I call it the heart of the catalog, which was the amazing content.
Aaron: But now, how do we through all of these amazing technology and digital solutions, how do we bring that purpose of the brand in a new way to people?
Aaron: And I think that’s kind of why we took, you know, it was an emotional decision because we all live with the catalog.
Aaron: I grew up in my career with the catalog, and as I shared with you, I was responsible for the catalog amongst other things in the UK and Ireland.
Aaron: So it was very close to me, but I fully understand that we want to move into a new meeting with the customer and a new way of inspiring people.
Aaron: You know, simple things like I learned a new statistic today that voice search is one of the fastest growing ways of people searching.
Aaron: And I read somewhere that in China, one million people use voice search not just to search, but to buy on Singles Day in 2019.
Aaron: And there’s around eight billion voice searches conducted a year.
Paula: My goodness.
Aaron: So if you see what I mean, so we have to move where people are.
Aaron: And Ikea has always been a brand to be where people are.
Aaron: And now people have shifted.
Aaron: Of course, there’s still going to be some super fans of the catwalk that will probably miss it.
Aaron: But the many customers, they’ve shifted the way they consume and search for information.
Aaron: And if we are a brand for the people, created by people, we need to be where people are.
Paula: It’s extraordinary, Aaron.
Paula: And I love that insight about voice search.
Paula: And to your point about people, how do we communicate?
Paula: It is by voice.
Paula: It’s the most simplest.
Paula: It’s the most intimate form of communication.
Paula: It’s probably the reason I’m a podcaster.
Paula: But I genuinely believe that in 10 years’ time, we’re not going to be tapping or typing in terms of searching for anything.
Paula: So I love the fact that you, again, are very clear on where people are going.
Paula: And in some ways, it’s just going back to those simple solutions of using my voice to do and achieve whatever it is I need to achieve.
Paula: So on that note, I think I’m just going to say that I would love you to come back and do another interview, Aaron.
Paula: I’m not sure when.
Paula: You have so much going on, but maybe at the start of 2022 to catch up on all these extraordinary projects.
Paula: But for now, I’ve just really, really loved our conversation.
Paula: Is there anything else you wanted to mention before we finish the show?
Aaron: I think one thing you said is about this emotional rewards or loyalty.
Aaron: I think how I would advise any person who’s working with loyalty now is how to bring your brand purpose at the center of your loyalty proposition.
Aaron: Because if you can connect your purpose as a brand, the reason you exist, the reason you are there for your customer, if you could bring that into the core of your loyalty proposition and make that the best expression of your brand purpose, I think you will have amazing success and it will give you so many rich territories to really think about how I bring that purpose alive for my most loyal customers.
Aaron: And my final piece would be how to shift the conversation.
Aaron: It’s not about making people loyal to us.
Aaron: How can a brand be loyal to customers?
Aaron: If you shift that mental thinking, you unlock yourself from a traditional way of thinking and you start with the customer and the member.
Aaron: And how can I be loyal to their needs?
Aaron: And how can I create the most value for them?
Aaron: That would be my last little tip or nugget for anyone listening today.
Paula: Wow, it’s a brilliant nugget, Aaron.
Paula: And yes, I have to say, it’s just an extraordinary journey that you’re on.
Paula: I love everything that you’re doing.
Paula: I want to wish you continued success way past your 156 million.
Paula: I’m sure, please God, when we talk next time, you’ll be blowing it out of the water even still.
Paula: So Aaron Mitchell, Global Vice President of Customer Engagement and Loyalty for Ikea, thank you so much from Let’s Talk Loyalty.
Aaron: Thank you, Paula, for having me today.
Paula: This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing news, insights and research.
Paula: The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.
Paula: For more information, check out thewisemarketer.com and loyaltyacademy.org.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
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