Technology

Protected: Ikea: Behavioural science keeps us coming back

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In a recent blog I looked at Ikea and the way in which they had moved beyond products and services to experience. Here I say more about the ‘science’ behind experience design and the way Ikea has used the latest thinking to create an in-store experience that frustrates some of us and delights others.

One of the issues that many executives struggle with is in deciding where they should invest in order to drive higher levels of customer loyalty.

A few years ago I asked the CEO of a client which aspects of the customer experience he wanted to improve. “I want us to be a 10 across the board” he said. With that statement he told me he did not know where and how to create value for his target customers: those who were key to the growth and profitability of his company. The desire to be a “10 across the board” is a flawed strategy for at least two reasons. Firstly, his organisation did not have the bandwidth, the expertise nor the funds to execute excellence at every customer touch point. Secondly, and most importantly, he would have been wasting money over-delivering in areas where the customer would be perfectly happy with a lower service level.

So, if wowing the customer at every given opportunity is not the answer, then how does the organisation decide where it should invest?

Lets return to the example of Ikea. If we mapped a visit to an Ikea store from a journey perspective, it would look like this:

The high-points of the experience – notably the product related touch points and the affordable prices – represent the very deliberate design of what Ikea wants to be known for as a brand and is based on insight research into what really matters to their target customers. They may not have known it when they designed their stores but Ikea’s in-store experience draws heavily on behavioural science, especially the work of Nobel prize-winning psychologist Daniel Kahneman. Through his research Kahneman discovered that two factors shape the memory we have of an experience. The first is how we feel at the high-point, the peak, irrespective of whether it is good or bad. The second factor is how the experience ends. Kahneman explains that the “peak-end rule” shapes the feelings that are mentally stored in our subconscious and drives the view we have of an overall experience. So, wanting to be a 10 across the board, as my CEO stated, doesn’t make any sense when we look at behavioural science either.

It is clearly important that there is a gap between the peak and the less important touch points. The goal should be to maximise the ‘pleasure-pain gap’ (PPG) with the caveat that the ‘pain’ has to be within the bounds of acceptability to the customer. It is this realisation that has led Ikea to improve its delivery service (buy one day and get the items delivered the next) and even allow the customer to avoid the ‘pick stock’ process in store all together. And Ikea ends the customer’s experience on a high through the provision of low-cost ice cream to placate the children who may well be screaming by the time their parents get to the end of their lengthy shopping trip!

In my next post I will look at some of the other implications for experience design that flow from Kahneman’s research.