The IKEA Effect

What is IKEA Effect?

The IKEA effect means that people value products they have made themselves (or
customise according to them) more highly than comparable ready-made products.
LABOUR LEADS TO LOVE
IKEA Effect
The term “IKEA effect” was coined by US researchers
Michael I. Norton, Daniel Mochon, and Dan Ariely

The effect was first named in 2011 Michael I. Norton Daniel Mochon

It is derived from the Swedish furniture retailer,

famous for products that require being
assembled by its customers.

Dan Ariely IKEA Logo

IKEA Experiment
In 2011, they carried out an experiment in which they
asked people to assemble IKEA storage boxes

At the end, they asked the participants how much they

would pay for the boxes and compared this to what a
control group said they would pay for the finished boxes

Those who had assembled the boxes themselves

named a higher price than those in the control group

The work they had invested in assembling the boxes

had a positive effect on their appreciation of the product.
IKEA Experiment...
Researchers repeated the experiment with other objects,
such as origami figures and simple construction kits.

Each experiment gave the same results. In the origami

study, the people who had made the figures priced
their creations five times higher than the comparison Origami, crane

group.

The researchers also concluded that the IKEA effect

manifests itself even when no customization is involved.

Lego model
Case studies
Build a bear
Build a bear is a brand that allows people to assemble their
own stuffed animals

Betty Crocker
US food company General Mills wanted ideas on how to sell
more of its Betty Crocker brand of instant cake mixes

They reached to Ernest Dichter, psychologist

Baker have to add a fresh egg into the instant mix

What causes IKEA effect?
There are four important factors that plays role into this

1. Closely related to Endowment effect, you value things more because you just own them
and Ikea effect acts as steroids for endowment effect, instead of owning something you
also made that so that amplifies the whole thing.

2. Effort Justification, if you make any sacrifice to reach a goal, it automatically increase
perceive value of that goal

3. Need to feel competent, one of the way to feel competent is when we finish a task

4. Self-efficacy, people derive satisfaction from the feeling that they are able to influence
their surroundings, for example, by creating objects
IKEA effect and business
Ikea effect is a cognitive bias that gets customers excited about
being a part of the story of the product and whenever customer
feels being part of the brand or product, loyalty increase by time

"People had the need to be emotionally invested and get

rewards" because the journey is as important as the destination.
Hitting the sweet spot
To hit the sweet spot, we need to aim to create a
product where the level of effort is low but the
perceived contribution is high. This way the IKEA
effect can be achieved.

Whenever possible let users have control over

customization of the product and service.

When you let the users feel in control and put

a bit of effort into getting what they need from
your product/service, they will form a stronger
bond with the product/service.
Some facts!
The effect goes beyond products, some mammals
(like rats) have demonstrated a preference for food
that is harder to get over easily accessible snacks.

The IKEA effect only occurs if the object is assembled

successfully. According to Norton et al., if people fail to
build a product using the instructions provided, the value
they attribute to it does not increase.
Examples
"Simple actions which require low effort but make the user feel
they've contributed a lot, will lower the fear of dealing with a
new product. If done properly and continuously for a period of
time it even can lead to forming loyalty to a brand and product."
Any points or questions?
Thanks