Know Your Nuggets: The Ikea Effect

By Bob Sullivan
Writer

March 26, 2018

Editor's Note: We love when the principles of behavioral science are distilled into short, easily digestible catch phrases …pithy bits of science, tiny slices of knowledge, little drops of insights. We call them “Nerd Nuggets” because we’re that kind of cool. Judge us at your leisure).

We use ‘em all the time, but not everyone knows what the hoo-ha we’re talking about. So, to keep us all on the same page – and, ultimately, to let you know what the cool kids are talking about – we’ve created this ongoing series, Know Your Nuggets.

Oh, and these won’t just explain the science, they’ll also suggest a few ways these nuggets could potentially impact business. Just a little taste to get the juices flowing.

Eat up and enjoy.

Somewhere in your home there's probably an old table, dresser or bookcase that's far past its expiration date. It might even be wobbly and missing a few screws, but you can't quite bring yourself to throw it away.

Why not?

You know why. You BUILT the thing. Maybe it was decades ago, but darnit, it's the product of your own handiwork. It's your baby. You've been moved from labor to love, and it's not easy to throw away something you love.

You’ve magically been caught up in what behavioral scientists and their fans – yes, scientists have fans – call The IKEA Effect. People who make things, or at least assemble things, value them more. A lot more. Subjects in an experiment involving simple IKEA boxes were willing to pay a stunning 63% more than fully built boxes. That doesn't make rational sense, of course. The consumers had to pay extra in the form of their own free labor to do the construction work, and they were STILL willing to pay more for their "hand-made" boxes. 

"Some assembly required" turns out to be an excellent product pitch. The phenomenon is not limited to IKEA bookshelves: Parents know that Build-A-Bear patrons pay far more for bears their kids partially construct, and grow to love. Nor is it new: In the 1950s, boxed cake mix makers boosted sluggish sales by adding a simple requirement to their “recipes” – add a fresh egg. The simple one-step-more change seems to have helped persuade homemakers who were otherwise reluctant to give up baking from scratch to give it try.

In their study naming the IKEA effect, Michael I. Norton, Daniel Mochon, and Dan Ariely speculate on several possible reasons that labor can lead to love – or at least to emotional attachment.  Humans naturally want to feel successful, and the work put into making something leads to "effort justification" – the more effort that goes into a task, the more satisfied people are when it is completed.  On an even deeper psychological level, people want to experience "effectance" – a feeling of competence and an ability to set and complete goals, often by using objects and possessions around them. 

As IKEA has so deftly demonstrated, that sense of satisfaction can be parlayed into an incredible tool for customer affection and loyalty.

In other words, turning a pile of wood with pre-drilled holes into a desk you can sit at is a cause for celebration.  More important, as IKEA has so deftly demonstrated, that sense of satisfaction can be parlayed into an incredible tool for customer affection and loyalty.

Critically, IKEA doesn't require consumers to build anything from scratch. Instead, customer and company are engaged in a sort of partnership. They are "co-creators of value."  They’re on the same team. At a time when so many consumer-corporation interactions have the potential to end badly, the co-creator model offers tremendous opportunity. The meteoric rise of food delivery services like Blue Apron reinforces the idea that there's a sweet spot between selling consumers raw materials (groceries) and finished products (completed meals). 

The IKEA Effect also can translate into the workplace. Workers who are fully engaged perform better, and those who help co-create company goals are more likely to feel ownership of, and engaged with, those goals. In other words, when some assembly is required at work, employees are more likely to experience "effectance" and derive satisfaction from impacting their world. Their labor can lead to love, or at least like, at the workplace. The “some assembly required” management style offers other benefits too: For example, something called the “endowed progress effect” suggests that people are more likely to finish something when they feel they are given a solid head start. (Editor’s Note: More on all this to come! Promise).

The IKEA effect comes with a huge caution, however. Love can turn to hate pretty quickly. Recall the last time you purchased a “some assembly required” product – perhaps a toy that had to be constructed during a single late December night – and the task was much harder than you expected. Perhaps the instructions were poor, or there were missing parts, or worst of all, you had to abandon the effort. It’s pretty easy to hate a toymaker at 3 a.m. on Christmas Eve.

If consumers or workers cannot follow the instructions you give them, they'll turn on you very quickly. Norton, Mochon, and Ariely warn in their study that “labor leads to love only when that labor is successful.” So when applying the IKEA Effect, it’s important to keep open a feedback loop and make sure you’re telling the truth about the “some” part of “some assembly required.” Otherwise, you’ll end up with some explaining to do, and perhaps a reputation to recover.

See also:

Know Your Nuggets: Reciprocity

By Bob Sullivan
Writer

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