IKEA effect

Theory explained by Sander Volbeda

IKEA effect is one of the cognitive biases in human psychology which discusses how we place disproportionately high values on the things we have involvement in making.

What is the IKEA effect?

Let’s see a real world scenario how IKEA effect takes place in day to day lives of us. Imagine that you built a chair from scratch and it turned out not to be in the perfect shape and the level. What will your family’s comment be on your workmanship? They of course will see it for what exactly it is. But will it be the same case for you? If you are like most of us, you will not see the fruit of your labor as some crappy piece of workmanship. Instead, you’ll love it. It is the IKEA effect playing in your head. According to the studies done based on IKEA effect, it has been shown that three factors should be met in order for this tendency to be initiated. They are,

  • The effort made by people in order to complete a task
  • Displaying the competencies
  • Completing the task
  • According to the same study, it is proven that if you fail to complete the effort initiated, then IKEA effect won’t function in its full potential to derive satisfaction within yourself.

The IKEA effect in online marketing

IKEA effect is widely used by marketers online as a great wheel of persuasion towards Conversion Rate Optimization (CRO). The key to use this effect to the favor of marketing is to make the customers involved in developing products or obtaining services while enabling them to showcase their competencies and most importantly by letting them complete the task successfully. Don’t worry! It’s not as complex as it sounds. Just put a few thoughts into how you’re going to present your products or services online, and you’re good to go. Stay tuned for the top tips!

There are world famous brands that reap the maximum advantage of this cognitive bias in human psychology. We all have come across that web store online that let us choose the colors to customize the products which are going to be purchased by us, enabling us to put some thought into them. This strategy is used by sneaker retailers online. Print on demand web stores also get the maximum use of IKEA effect by enabling their customers to involve in product customization, therefore to make the customers feel involved in the process. Not only to sell products online, but the IKEA effect can be used to sell services online too. For example, there are holiday service providers who organize ‘working farm holidays’ for their customers and charge exclusive prices as they help out in the fields or barns during their holidays. Whether you sell a product or service online, the key is to make your customers feel content in their effort of involvement in the process. Then only they’ll move towards actual purchase of what you have to offer.

How to use IKEA effect for Conversion Rate Optimization (CRO)?

Let people interact with your product prior to actual purchase

This strategy can be used in unique ways based on what you offer online. For example, an app designer can let their customers work on certain editable templates to enable them to build something on their own. Once the customers are satisfied with the completion of the task, there’s a high tendency that they’ll actually purchase the app. Also, you can heighten the user experience by enabling them to add some creativity into their process.

Let your customers customize your product online

Personalization is a powerful factor which contributes towards a great level of customer experience as people value things that they’ve put effort into and feel responsible for, a great deal. For example as Nike does, you can let your customers create their own version of the product and this strategy is ideal to make a strong sense of belonging to the customer towards your brand which can help for Conversion Rate Optimization (CRO). Nike let their customers not only choose the color of the shoes but also to choose the stitching patterns and other features. This is why the Nike customers are always willing to pay more for them!

Leverage IKEA effect by obtaining customer inputs and ideas

As discussed above, effort, competence and completion are key elements to initiate IKEA effort. You can ask for ideas, opinions and comments from your audience in your website to stimulate the key element of ‘effort.’ By providing the ideas or opinions, your target customers can show their competence. Once the feedback is received, be sure to respond in a way that their feedback is valued. That way, your customers feel that they completed their work on your product or service to leverage the IKEA effect of human psychology.

Conclusion

Human psychological tendency to value experiences that they feel a part of is the result of IKEA effect. By letting your customers engage in the process of products or service generation, you can boost their engagement as well as loyalty. You should let your audience not only put an effort into creating something, but also to let them show their competence and finally make them feel that they have completed the required task successfully. In fact, studies have shown that 44% of such customers tend to visit back for repeated purchases, which definitely works great towards the Conversion Rate Optimization (CRO). Isn’t this the ideal time to boost your sales by integrating the IKEA effect into your marketing strategy?

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References

1. The “IKEA Effect”: When Labor Leads to Love

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