The IKEA Effect

Look! I made this!

Have you heard of the IKEA effect? Yep, it’s named after everyone’s favorite Swedish assemble it yourself store (and meatball purveyor). Essentially, research has found that people value something more when they put labor into the successful completion of a task. The key is successful completion.

It’s kind of an amazing effect when you think about how the company is offloading some of their production costs on to the consumer, and the consumer is not only willing to take on the task, but in some cases pay more than what it would be worth if already completed. Other companies outside of IKEA have built entire business models on this, such as Build-a-Bear, make your own candles, design and build your own website, and even pre-structured Lego kits.

What does this mean for marketers?

For marketers, it’s an opportunity to identify potential ways to engage with customers that companies might have not yet considered. It can even spawn new industries. Just look at the explosion of home food delivery companies. The application of the IKEA effect combined with our Amazon inspired instant gratification, and the mere thought of being able to create a wonderful meal, even if we cannot properly boil an egg, has morphed into a $17.4 billion industry. The IKEA effect can also backfire. Consumers similarly place a lower value on a product, service, and even the company if after attempting to complete a project, it ends in failure. It’s critical then to keep in mind the need to strike the right balance between the amount of expertise and labor involved with the assurance that there will be a high likelihood of the customer successfully creating what they envision.

So – here is wishing you the best of luck in your next build-it-yourself endeavor and hoping you don’t have any left-over parts and pieces.