{"id":8596,"date":"2013-03-14T01:22:16","date_gmt":"2013-03-14T01:22:16","guid":{"rendered":"http:\/\/www.beyondphilosophy.com\/?p=8596"},"modified":"2019-10-06T06:55:36","modified_gmt":"2019-10-06T10:55:36","slug":"ever-heard-of-the-ikea-effect-increasing-perceived-value-while-reducing-costs","status":"publish","type":"post","link":"https:\/\/beyondphilosophy.com\/ever-heard-of-the-ikea-effect-increasing-perceived-value-while-reducing-costs\/","title":{"rendered":"Ever Heard of the IKEA Effect? Increasing perceived value while reducing costs"},"content":{"rendered":"
\"Ever

Ikea<\/span><\/span> Effect<\/p><\/div>\n

There is a real psychological phenomenon called the IKEA Effect.\u00a0 It describes the notion that there is really is love in our own labour<\/span><\/span>.\u00a0 When we put effort into building our own things we attach greater value to it.\u00a0 This phenomenon has investigated by psychologists and behavioural<\/span><\/span> economists but derives its name from the love affair IKEA\u2019s customers apparently have with their self-assembled furniture, even when it\u2019s badly self-assembled.<\/p>\n

A Harvard Business Review article by Michael Norton, Daniel Mochon and Daniel Ariely (The IKEA Effect: When Labor Leads to Love<\/a>, 2011) points<\/span> out that traditional rational economic thinking would predict that the value attributed to an item that required the consumer to assemble should be lessened since a rational being would simply subtract the value of their own labour<\/span> from the final cost of the item.\u00a0 However, it can be readily observed that self-assembly often has the opposite effect.\u00a0 The IKEA and Build-a-bear experiences are two self-assembly experiences that come to mind where consumers pay a premium.\u00a0 The researchers go on to show the underlying mechanism at play through laboratory experiments.<\/p>\n

In one experiment, people who self-assembled basic IKEA items estimated their final value to be $.<\/span>23 whereas non-assemblers valued the same items only at $.<\/span>05.\u00a0\u00a0 This basic effect was found regardless of whether the participants were predisposed to do-it-yourself (DIY) activities or not.\u00a0 Thus, even when the intrinsic enjoyment of self assembly is minimised<\/span> (non-DIYers), the IKEA effect still holds true.\u00a0 Furthermore they found that builders who were only allowed to half assemble an item valued it less than when they were allowed to fully assemble it but more than those who played no role in its assembly.<\/p>\n

Psychology has long known of \u201ceffort justification\u201d \u2013 the more effort we put into an activity, the more we come to value it.\u00a0 Perhaps it is a post-rationalisation<\/span> to avoid a dissonance.\u00a0 Whatever the cause, the effect is an observable psychological fact.\u00a0 Effort Justification alone would predict that labour<\/span> leads to increased perceived value. \u00a0However, effort<\/span> success also plays a role.\u00a0 To maximise<\/span> the IKEA effect, self-assemblers need to achieve success which simply means complete<\/span> the task.\u00a0 Success does not mean mastery of the task as a craftsman would.<\/p>\n

All this brings to mind the case of Betty Crocker cake mix<\/a> \u00a0which was launched in 1952.\u00a0 At the time, they were marketing the mix on speed and ease in the kitchen.\u00a0 Both these qualities were keys to many popular modern age kitchen advancements.\u00a0 However, the cake mix was not the success the company thought it would be.\u00a0 It turned out that the original mix included powdered eggs.\u00a0 However, 1950s ready mix cake makers needed to have a sense of real contribution to the final product.\u00a0 The cake mix began to fly off the shelves when the mix was adjusted such that adding a few eggs at home became necessary.\u00a0 This is perhaps a 1950s version of the IKEA effect.<\/p>\n

One potential implication is that businesses should consider how to include some DIY components into their experience making sure that customers can successfully complete it.\u00a0 Presumably this would increase the customer\u2019s perceived value of the experience.\u00a0\u00a0 Norton et al. caution<\/span> however, that The IKEA effect is reactive, not proactive.\u00a0 That is, the IKEA effect becomes apparent after the DIY assembly not before.\u00a0\u00a0 It is an effect that becomes manifest in situ.\u00a0 It is not a tactic that operations should be aware of, not necessarily marketing. \u00a0\u00a0The IKEA effect may be crucial to your customer experience<\/a> as it is to reducing<\/span> your overall cost.\u00a0 It gives a clue as to why and how a self-service experience might be valued higher by customers after the fact.<\/p>\n\n\n\n
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Qaalfa<\/span>\u00a0Dibeehi<\/a>\u00a0is Chief Operating and Consulting Officer\u00a0at<\/span>\u00a0of\u00a0Beyond Philosophy<\/a>\u00a0one of the world\u2019s first organizations devoted to\u00a0customer experience<\/a>.\u00a0Qaalfa<\/span>\u00a0is an international co-author of Customer Experience: Future Trends and Insights. Beyond Philosophy provide consulting,\u00a0specialised<\/span>\u00a0research & training from offices in Atlanta, Georgia and London, England.
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There is a real psychological phenomenon called the IKEA Effect.\u00a0 It describes the notion that there is really is love in our own labour.\u00a0 When we put effort into building our own things we attach greater value to it.\u00a0 This phenomenon has investigated by psychologists and behavioural economists but derives its name from the love […]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[97],"tags":[],"class_list":["post-8596","post","type-post","status-publish","format-standard","hentry","category-blogs"],"_links":{"self":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/8596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/comments?post=8596"}],"version-history":[{"count":0,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/8596\/revisions"}],"wp:attachment":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/media?parent=8596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/categories?post=8596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/tags?post=8596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}