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After 3 lost screws, 2 restarts and 1 YouTube tutorial, it's finally assembled: your new IKEA dresser. You are happy with it not only because the cabinet is so beautiful, but also because your effort contributed to the result. This feeling of satisfaction is known as the IKEA effect. And this effect offers interesting opportunities for you as an SME entrepreneur!
What is the IKEA effect?
You are more satisfied with what you have made yourself, because you have put time and effort into it (Ariely, Mochon & Norton, 2012).
We feel that we add value to something when we have made it (in part) ourselves. That feeling applies even to everyday products. The more involved you are in the creation, the more you appreciate the end result. You feel satisfaction because of your efforts, because you yourself contribute to the success of your creation. And as a result, you are also willing to pay more for it (Ariely & Simonson, 2003)!
How does the IKEA effect occur?
People naturally feel the need to complete things. Successfully completing their task makes people feel competent. The assembled box is proof of your competence, which makes it more valuable. Moreover, because you helped build the creation yourself, you estimate the positive attributes more positively. As a result, you give it a higher value. And because you have owned the product for some time, while working on it, the endowment effect also comes into play.
Examples in practice
- Of course, IKEA is the ultimate example of the IKEA effect. IKEA's success is largely due to the way they offer their products: as a kit.
- When you order a greeting card online and can personalize it yourself, you are more satisfied with the end result than when you send a ready-made card.
- While picking out a new kitchen, you'll sit down with the supplier to help put together your ideal kitchen. Being involved in the design process will make you even more proud of the end result.
Using the IKEA effect to your advantage
As an entrepreneur, the IKEA effect brings you several benefits. You now know that customers actually enjoy contributing something to the end result themselves, so be sure not to take all the work out of their hands. But how do you apply this? Some ideas to ensure the IKEA effect:
- Offer the ability to personalize a product. This can range from simple color choices to more complex customizations.
- As a finishing touch, provide a choice moment during the ordering process. For example, wrapping service or not and festive or business wrapping paper.
- Add some extras to the order, such as stickers that can be used to pimp the product.
- Are you offering a service? Then ask the guest to perform an act (not too big) themselves. In a restaurant, for example, you can set up a small buffet with some toppings for over dessert.
Ariely, D., & Simonson, I. (2003). "Buying, bidding, playing, or competing? Value assessment and decision dynamics in online auctions." Journal of Consumer Psychology, 13, 113-123.
Norton, M. I., Mochon, D., & Ariely, D. (2012). "The IKEA effect: When labor leads to love." Journal of consumer psychology, 22(3), 453-460.