Friday, February 13, 2015

Low Cost And Customer Experience: Ikea's Example

Most of the time, people perceive low cost businesses as if they did not have much added value for customers. Indeed, for most of those companies, they cut on a lot of the customer experience futile aspects in order to save big buckets. They bet that customers don't really need these extra services as long as the core service is their for unbeatable price.

But part of the pact between a low cost company and the customer, is that the extra service not available for the customer is worth a big saving on the price. 
Ikea is for sure in this kind of pact. 

And this is the reason why Ikea explains how the business modell work, why they cut some of the service for customers, and reverse it to explain the added value Ikea provides.

In this picture, you will see some signs Ikea have in its stores. Here are the questions it answers: Why do you need to figure out by yourself (how to find products for example), why do you need to transport yourself the furnitures?

By explaining the deep reasons of those low cost business components, Ikea secures the pact it has with its customers, and hence explain why they are able to be cheaper than competitions, but also how they achieve it without compromising the quality. Great example to be followed by discount chains.