The "IKEA Effect" in Marketing and Life

What is IKEA effect?

The "IKEA effect" is a cognitive bias in which consumers place a disproportionately high value on products they partially created or assembled. The term is derived from the Swedish furniture company IKEA, known for selling furniture that customers often assemble themselves.

The IKEA effect suggests that when people invest labor into producing something, they tend to value it more highly than if they had not put any effort into its creation, even if the end product is not perfect. This can be seen as a form of endowment effect, where people ascribe more value to things merely because they own them.

The IKEA effect in Marketing

Here's how businesses can harness this cognitive bias to enhance their marketing strategies:

1. DIY and Customization Options:

   • Offer products that customers can customize or assemble themselves. This could range from custom-designed sneakers to DIY craft kits.
   • For online services, allow users to personalize their dashboard, profile, or interface.
     
     

2. Engage Customers in Product Creation:

   • Involve customers in the product development process. This could be through crowdsourcing ideas, voting on new product features, or beta testing.
   • Run contests where customers can design a new product variant or flavor.
     
     

3. Workshops and Classes:

   • Offer workshops where customers can learn to use or assemble your products. This not only educates them but also strengthens their connection to the product.
   • For instance, a pottery store might offer pottery-making classes, ensuring that participants value and purchase their creations.
     
     

4. Loyalty Programs with Effort:

   • Instead of just offering points for purchases, consider loyalty programs where customers earn rewards for activities, like creating content, writing reviews, or participating in community events.
     
     

5. Storytelling and Journey Sharing:

   • Encourage customers to share their product assembly or customization journey on social media. This not only amplifies their personal connection but also provides organic marketing for your brand.
   • Feature these stories in your marketing campaigns to show real-life connections people have with your products.\
     
     

6. Interactive Experiences:

   • Create interactive marketing campaigns where customers can engage directly, such as interactive ads, augmented reality experiences, or gamified apps related to your product.
     
     

7. Feedback and Iteration:

   • Actively seek customer feedback and make visible changes based on it. When customers see their suggestions come to life, they feel a sense of ownership and connection to the brand.
     
     

8. Limited Edition Collaborations:

   • Collaborate with influencers or notable figures in your industry to create limited edition products. Allow fans to have a say in the design or features of these collaborations.
     
     

9. Highlight the Effort:

   • In your marketing materials, emphasize the effort and creativity customers can put into your products. Showcasing before-and-after scenarios can be particularly effective.
     
     

10. Educational Content:

    • Produce content that educates customers on how to use, customize, or get the most out of your products. This can be in the form of tutorials, webinars, or blog posts.

By integrating the IKEA effect into your marketing strategy, you can foster a deeper emotional connection between customers and your products, leading to increased brand loyalty and higher perceived value. However, it's essential to ensure that the DIY or customization process is user-friendly; otherwise, frustration could negate the positive effects.

The IKEA effect in Life

The IKEA effect in life can be compared to a subtle form of influence. It gently guides individuals to do what others desire. For instance, let's consider a girl who is dating two individuals. One is wealthy, and he invites her to a luxurious five-star restaurant where he pays for everything she wants to eat. On the other hand, when she goes out with the less affluent individual, they engage in singing on the street and then head to a hamburger store. Despite feeling that something is amiss, the girl chooses to date the less affluent individual. Strangely, she cannot explain why she made this choice.

In this scenario, the girl is influenced by the IKEA effect. She feels remorse for her actions with the less affluent individual. They have overcome challenges together, which may serve as proof of their love. She has contributed to the relationship and does not want to discard it. She feels a sense of achievement. However, it's important to note that this is not an example of "Gaslighting."

This tactic can be applied in various situations. If you want someone to feel regret for their efforts, you can involve them in the work. This makes it difficult for them to give up.

In Conclusion

The IKEA effect is a powerful cognitive bias that can influence how we value and perceive products, brands, and even relationships. By understanding how this effect works, marketers can create strategies that enhance customer loyalty, satisfaction, and engagement. Likewise, consumers can be more aware of their own preferences and choices, and avoid being manipulated by marketing tactics. Whether you are a business owner, a marketer, or a customer, the IKEA effect can have a significant impact on your life. To learn more about this fascinating phenomenon, subscribe to our blog or follow us on social media. Thank you for reading! 😊