The world’s largest furniture retailer sells half-made products and expects you to finish them. It’s an outrage! The funny thing is – we are happy to do it, which is why they are the world’s largest furniture retailer.
IKEA has built an empire on selling home furnishings that the consumer must assemble themselves. The furnishings are attractive, well-made (partially made anyway), and relatively inexpensive, but the secret ingredient is – you. The effort you put into creating the final product makes the piece more valuable. Well, at least to you.
Objectively, a piece of furniture assembled by an amateur should have no more value than one assembled by any other amateur. But we know how much time and effort went into the assembly - OUR time and effort - and it matters. In our eyes, that work adds personal value to the item, but certainly not objective value.
This overvaluation is not rational, of course, but nobody said consumers are rational. (That’s not exactly true - classical economists based their entire theories on consumers behaving rationally.)
The Build-a-Bear company works on a similar premise, but with those cuddly creatures not only do you stuff the bear yourself, but you get to customize it how you like, making it one-of-a-kind and even more special to you. You could even call it “sentimental” value.
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Whose cake is it?
In a 2011 paper, behavioral economist, Dan Ariely, and his colleagues coined the term “The IKEA Effect” to describe the increase in valuation of self-made products. He also covers it in his fabulous book, “The Upside of Irrationality.”
One of the examples they present is the introduction of instant cake mixes in the 1950s. Initially, all of the ingredients were included and the home baker simply needed to add water. But there was resistance – it was TOO easy. The finished product did not feel personal. It wasn’t “theirs.”
When a marketing expert had the great idea of leaving out two or three ingredients so that the housewife (or househusband, though those were rare in the 50s) had to add an egg, milk, etc., the mixes took off! It was still much easier than baking from scratch, but now it felt like the baker had done just enough work to make it personal.
It seems ridiculous that just adding an egg and a cup of milk would make that much difference in our perception, but sometimes we are ridiculous creatures. However, that’s not always a bad thing.
Is there a problem?
What is the downside to overvaluing things we create? Perhaps we hang onto things longer than we should, or clutter our lives with unattractive or barely functional items just because we had a hand in making them. Or we would be better off with something professionally made that would be of a higher quality.
I think those are minor issues, though. In fact, I am going to veer from my usual cautionary advice against irrational “invisible mind blocks” such as the IKEA Effect, and advise that instead of trying to overcome it – we should accept it. Dare I say - embrace it even.
Why? Because the extra portion of love and pride we have for things we create, that have our personal touch, or contain even a small amount of our sweat and TLC, can encourage us to keep going – to continue to put effort and creativity into our work. It is a great source of motivation and inspiration.
Let them help
If you are a supervisor or leader of any kind, you can use the IKEA Effect to engage your employees. Whenever possible, allow everyone in your organization to have a personal hand in creating the policies, procedures, and methods that drive your business.
When I was a software programmer, I enjoyed - and put more effort into - projects where I was allowed to participate in the design of the interface or report rather than just trying to meet someone else’s specs. I felt more important to the company and that my input mattered.
So make an effort to seek out ways in which personalization can be added to some aspect of people’s jobs and their work. This creates authentic pride and satisfaction because they will value the result more when it includes their touch and their effort.
Who cares if it’s irrational.
Think well and be well.
- Steve Haffner