IKEA is world renowned for producing well-designed, functional, and high-quality home furnishings, along with their signature Swedish meatballs. IKEA Family, their B2C loyalty program, is a key part of their customer experience strategy which aims to build loyalty and engagement by personalizing communication with their millions of IKEA Family members in Australia.
Situation
The IKEAFamily loyalty program’s objective is to create more personalized and meaningful long-term relationships to positively impact customer lifetime value and ROI.
Through research and customer survey results, IKEA realized that tailored messaging and offerings results in consistent brand engagement and increased customer spending. IKEA was on a mission to enrich their client intel to better understand and target their loyalty members, or IKEA Family members.
IKEA believed that the best way to get to know their members was through data enrichment. This would help the team market relevant promotions, products, and position home furnishings that best suited members’ needs.
To achieve this level of insight, IKEA first needed to ensure they had accurate member data, specifically postal customer addresses. This would allow them to adequately match households to Experian’s Mosaic; enriched datasets that include a detailed and granular view of the socio-demographic profile of the Australian population.
Challenge
To properly match a member to the enriched dataset, IKEA needed verified mailing addresses, a critical component of the matching process.
However, manually entered addresses and an inferior data validation solution posed a risk of typing errors, incomplete data, or erroneously formatted addresses. In turn, not only did this result in a lack of reachability of IKEA’s members, but the company encountered difficulties augmenting their data as they could not achieve a match rate higher than 83%.
Solution
Experian’s Address Validation was the perfect starting point to ensure correct data at the point of entry. With accurate addresses, IKEA could then enrich their existing member data with Delivery Point Identifier Data (DPID) and Experian’s Mosaic data.
Experian’s real-time address validation and DPID-verified addresses improved the Mosaic match rates enabling IKEA to understand the household demographics of their customers quickly and efficiently, enabling more personalized communication.
An added value to Experian’s Address Validation is the ability to streamline the sign-up process. This solution significantly reduces keystrokes enabling the client to effortlessly enter their contact information and avoiding the risk of error, credited to predictive search and fuzzy matching. As a result, the address saved is well-formatted, saving time and costs associated with database cleansing.
Results
Since introducing Experian’s real-time address validation solution, IKEA Australia has significantly improved the accuracy and completeness of the addresses captured. This has allowed for greater matching of household attributes, empowering IKEA to deliver more personalized marketing and, in turn, higher customer spending and better ROI.
IKEA Family has been able to:
- Improve their data quality match rate by 12%, going from 83% using a competitor’s solutions, to 95% with Experian.
- Send more targeted communications, with an increased spend of 7% annually for Experian Mosaic assigned members*.
- Streamline well-formed validated address data into the database, reducing the risk of bad data entering the CRM.
- These improvements have led IKEA to increase outreach with personalized communication to a customer base of millions of members in Australia.
What's next?
An exciting change is coming to the IKEA Family loyalty club in 2023, and IKEA Australia has been chosen as the first market globally to roll this out. This transformation will not be a typical points rewards program. Instead, IKEA Family will focus on engagement, and giving IKEA Family members more choice in the rewards they choose.
IKEA is also planning to undergo an Experian data cleanse to clean the historical address data of their existing customer database, ensuring the best possible ROI on future marketing campaigns.
