Do It Yoursjälv: Understanding the IKEA Effect

I am thankful that, as a parent, I have never had to set foot in a Build-A-Bear Workshop. I’d love to say I deftly steered my children away from it, but the truth is that neither of them ever expressed any interest.

In case you also managed to avoid Build-A-Bear, the idea behind it is that you choose the skin of your stuffed animal…wait, that can’t be what they call it. Pelt? No. Outsides? Nope. You choose your not-yet-stuffed animal. Then, you get to decide how much stuffing you want it to have, pick out clothes and accessories for it, and even give it a voice or scent.

There is nothing wrong with Build-A-Bear, but I noticed that my friends who took their children there went often and spent a lot of money for a stuffed animal advertised as “starting at $12.” Build-A-Bear seemed to have a hold on people, and now I know why. They tap into a cognitive bias we have of valuing something we helped create more than we would value an identical item we didn’t create. This bias is named after a company that does “build it yourself” even better than Build-A-Bear. It’s called the IKEA effect.

WHAT THE FLÄRKE IS GOING ON?

While we’ve surely been experiencing the IKEA effect as long as we’ve been building things, it was not identified as a cognitive bias until relatively recently. Michael Norton, Daniel Mochon, and Dan Ariely coined the term in a 2011 paper in the Journal of Consumer Psychology.

In one of their experiments, participants were asked to put together a cardboard storage box from IKEA while others were presented with an already-assembled box. Subjects who built their own boxes were willing to pay 63% more for it than those who didn’t.

Norton, Mochon, and Ariely conducted another experiment in which participants were asked to make origami cranes and frogs and then bid on their creations. Their bids were significantly higher than those of non-builders who saw each creation as the “worthless crumpled paper” that it was. But what happened when skilled origamists were added to the mix? Unsurprisingly, the non-builders bid significantly higher on the “professional” creations than they had on the first-time-folder productions. But the first-time folders, the ones who made their own origami, placed the same value on their own creations as the non-builders placed on the expert creations.

Not only do we value things more when we make them ourselves—it seems we think they are as good as professionally-made items! That explains every schlocky homemade gift you’ve received. The giver truly believes it to be a work of art. And now might be a good time to gently suggest you rethink your plan for personally handcrafted holiday gifts.

WHY ARE WE LIKE THIS?

There are several other biases and human traits that help explain why we are so susceptible to the IKEA effect. One is that we all need to feel capable. We want to be in control in our environment. Building something not only makes us feel competent but leaves us with proof of competence to show others.

Effort justification is also at play when it comes to the IKEA effect. People tend to inflate the value of outcomes that were hard to achieve. Maybe building a cabinet with nothing but a vague instruction manual and tiny Allen wrench makes you sure that Fryksås must mean “rickety disaster” in Swedish and leads you to throw said Allen wrench across the room. Once it’s complete, however, we love our Fryksås cabinet more than any other piece of furniture we have. Doing anything else would cause too much cognitive dissonance. It must have been worth the hard work.

Effort justification may also help explain why hazing is still a thing. You hated it at the time, but painting yourself as a member of the Blue Man Group and streaking across the quad had to have been worth it, right? Studies show that the more embarrassing your group-joining ordeal is, the more highly you rate the group and your experiences as a member.

Now, back to IKEA. The endowment effect is the third trait that feeds into the IKEA effect. Simply by owning something, we tend to value it beyond its objective worth. With so many contributors to the IKEA effect, it’s no wonder we succumb to it.

BUT I DON’T SELL SCANDINAVIAN FURNITURE

Even if you aren’t selling something that can be built with an Allen wrench, the IKEA effect is important to know about—sometimes you can use it, and other times you’ll need to fight against it. IKEA and Build-A-Bear aren’t the only companies benefiting. Meal kits, paint-your-own pottery, and customizable ice cream are all leveraging the same bias.

There doesn’t even have to be a product involved. People get similarly attached to their own ideas and their own way of doing things. It’s one reason the status quo is usually a more formidable competitor than any competing business. If you’re a SaaS company looking to replace a system that was built in-house, you will be fighting against the IKEA effect.

While it can be an obstacle, the IKEA effect can also be a tool. The more you can include others in your processes and the more you can let people customize the product or service you’re selling, the more ownership they will feel. Fostering a feeling of ownership isn’t just good client-facing advice. If you’re leading a team, getting input and creating something together goes a long way toward obtaining buy-in.

When you help create something, you have more of an emotional attachment to it, whether that’s personalizing your profile on an app, building your Fryksås storage unit, stuffing your own bear and giving it an outfit and accessories, or making origami cranes. You should see my origami cranes. They look like they were done by a professional. I’ll be giving them as holiday gifts this year. Everyone will love them.

We don’t have origami workshops, but we do offer live and self-paced sales training. Email us at mastery@maestrogroup.co to learn more.