We place disproportionately-high value on products we create.

IKEA Effect

We place disproportionately-high value on self-made products.

Two groups were given IKEA boxes, with one group given fully-assembled versions, and the other given unassembled boxes, which they were told to put together. This second group were willing to pay much more for their box during the subsequent bidding process than those with pre-assembled boxes.

Norton, Mochon & Ariely (2012) The IKEA effect: When labor leads to love. Journal of Consumer Psychology.

So we humans will pay more (and not less) for something that we’ve put labour into than for something bought ready-made. The study above looked at other scenarios, using origami and lego, and found the same results.

Interestingly, the research suggests that our efforts lead to increased valuation only when we successfully complete tasks. When participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated.

By extension, consumers are also willing to pay a premium for products that they have customized to their idiosyncratic preferences (Franke and Piller 2004; Schreier 2006).

Takeaways for decision-makers

  1. Look at how you can add in an aspect of customer-owned creation into your existing product or service.

  2. Ensure that you market these changes as a value-added experience decision, and not a labour-cost-saving exercise. To some extent, the perception of this may depend on your brand.

  3. Provide personalisation options early on in your user flow to engender a sense of ownership and significantly reduce conversion drop-off later in the order process.