The IKEA effect describes the phenomena of how people place more value on a product if they help in creating/assembling it. This phenomenon is named after the famous Swedish furniture company (IKEA, in case you didn’t know 😉) whose products typically require assembly post-purchase.
As a result of this effect, people are often willing to pay more money for experiences like these.
But why?
- Investment of effort: When people invest their time, effort, and resources into creating something, they develop a sense of ownership and attachment to the outcome. This investment of effort leads to a greater perceived value of the final product or service.
- Sense of accomplishment: Completing a task, such as assembling furniture, can create a sense of accomplishment and pride.
- Identity expression: By personalising or customising a product or service, people can express their identity, preferences, and creativity. This self-expression strengthens their emotional connection to the product or service, as it becomes a reflection of their individuality.
- Perceived quality: People may perceive self-assembled or co-created products/services as being of higher quality than standard options. This perception is driven by the belief that customised items are better suited to their specific needs and preferences.
This effect taps into peoples’ desires for autonomy, creativity and ownership which essentially leads them to assign higher value to products that they have assisted in creating/assembling.
There are many companies that have built their product and customer experience around the idea of customisation. Such as:
- Starbucks: Customers are able to enjoy a wide range of customisable options for drinks, with choices in syrups, milk alternatives and toppings.
- Build-A-Bear: Customers can select an animal and all its accessories to create a unique toy that matches their personality.
- LEGO: Customers are free to get creative with building their own creations or specific models using LEGO building blocks.
The IKEA Effect for Services
So, what if you offer a service as opposed to a product? Well, there are a few ways to implement the IKEA effect into your service offering that can increase customer perceived value. Here’s some ideas:
- Customisable options: Give your customers the opportunity to customise the service. Offer customisable options/features, service add-ons, or even allow them to co-design elements of the service itself. By participating in the creation process, customers are more likely to feel a sense of ownership and attachment to the final outcome.
- DIY tools and resources: Provide customers with tools, resources, or guides that enable them to take an active role in the service delivery process. This could involve offering online platforms, templates, or tutorials that enable customers to perform certain tasks of the service themselves. For example, a graphic design service could offer DIY design templates that customers can modify according to their preferences.
- Interactive experiences: Create interactive experiences or workshops where customers can actively engage with the service in a hands-on way. This could involve hosting events, workshops, or demonstrations. For instance, a bank could host a financial planning workshop where customers can create personal investment plans.
- Feedback: Encourage feedback and collaboration throughout the service delivery process. Actively solicit input from customers, listen to their suggestions, and incorporate their ideas into the service wherever possible. By involving customers in the decision-making process and demonstrating that their opinions matter, you can help create a sense of ownership and investment in the service.
Utilising the IKEA effect into your service offering can help increase the perceived value of your service and also assists in creating a stronger connection to your brand for customers.
So, will you be implementing this into your marketing anytime soon?
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