More Profit from Doing Less Work (Taking a Leaf Out of the IKEA Catalogue)

The Economist published a wonderful obituary celebrating Ingvar Kamprad, the IKEA founder which is free to read here. I love the one-line explanation of the IKEA business model:

“Customers do as much of the work as possible, in the belief they are having fun and saving money.”

It tells you not only about the clever cost reductions and supply chain savings of flat pack furniture but the psychology in creating satisfied customers.

We’ve all been there at some point: on all fours with an Allen key trying to decipher a manual, then finally after some toil, standing back to admire our handiwork. The lesson is simple: you shift work that you the supplier normally does, over to your customer instead. A cost is removed but more than that, the task itself makes the customer even more satisfied with the product than they would be otherwise. But how does that work?

There’s a story the behavioural economist, Dan Ariely, tells about Duff & Sons cake mixes. Their initial product required you to just add water then bake the mix to produce a cake. This minimal effort cake mix didn’t sell. Later they made the recipe more involved, requiring that you add milk and an egg. Suddenly the product sold like…hot cakes. The addition of extra work gave people a sense of accomplishment, that had really made the cake.

Other research backs this up – people who assemble products themselves, subsequently value them more highly. You form a level of emotional attachment, a sense of pride in what you consider to be your own work. I wouldn’t put much of a premium on a BILLY bookcase but somehow it’s followed me from one flat to another for years; it’s simple, practical and it’s my bookcase.

Applying the Concept in Your Business

So if this saves you money and increases customer satisfaction, how do you apply it in your business? For Nisus, it’s been giving clients optional self-service tools – rather than ask us to analyse the data and create a report, we give clients access to a portal where they can interrogate their numbers and produce charts for themselves.

In professional services, you might not be producing a physical product and in fact that’s an advantage. The more involved and engaged your client is in specifying different elements of what you ultimately deliver, the more they have a sense of shared ownership. You move from a supplier providing a service, to a partner in their business. For example, some firms will ask for someone at the client to come in and deliver a briefing on their business in order that the firm can better understand and serve the client. Requiring a feedback debrief at the end of a matter is another form of getting the client to put in effort and so become more engaged. As a matter or project progresses, you should pass specific tasks to the client to fulfil. Not menial tasks, ones that clearly require expertise as the client.

There are other lessons we could take from IKEA. The business has renowned supply chain management, is a master of curated customer experiences within their stores and of course is leaders in shady tax avoidance arrangements! But I think how you involve the customer is a good place to start. What area can you involve your client in that will make them appreciate or even enjoy the work you’re doing for them?

About the author: Graham Archbold

With Nisus since 2007, Graham has been involved in more than 50 client research projects for 22 different professional services firms.

Pioneering the use of RATER in professional services, most recently he has led client insight studies in legal, accountancy and property. See Bio…