Tah-Dah! The IKEA effect ~ Brand Mix

Saturday, January 31, 2009

Tah-Dah! The IKEA effect

A couple of weeks ago I called IKEA's BESTÅ BURS TV unit the Baskin Robbins Large Chocolate Oreo Shake of build-your-own furniture given its 27 pages of instructions and 44 steps. "I'm hoping," I said "that there's some pride of accomplishment if I ever get it finished." Well I'm pleased to report that it is finished (see above for proof) and I do, indeed, feel a certain degree of satisfaction.

Now I read in the Harvard Business Review that researchers are actually calling the labor-leads-to-love phenomenon the IKEA effect. Michael Norton, Daniel Morchon and Dan Ariely of Duke University have shown that when people construct products themselves from TV units to build-a-bears that they: "come to overvalue their (often poorly made) creations." Hey, wait a minute - my TV unit is perfect!

In the article, Norton points out that this phenomenon is a marketable one. Back in the 50s, instant cake mixes didn't do very well when they first came out because they were too easy to make. There was a reformulation that required the addition of an egg and, presto, sales rocketed.

The challenge is calibrating the IKEA effect to the right level. The researchers found out that if the task is too difficult and people fail to complete the project, the IKEA effect is washed out. But, as long as the task is doable, they concluded that consumers may actually be willing to pay a premium for do-it-yourself projects.

The last point that Norton makes is interesting. This same phenomenon may have implications for organizational dynamics and explain why managers are so reluctant to give up on projects when they've put a lot of effort into them and, at the same time, discount ideas developed elsewhere (the not-invented-here syndrome). Logically, all prior investment should be sunk cost. Emotionally, that would be loved labor lost.

1 comment:

Anonymous said...

Having never seen an IKEA item put together correctly, I would think there would be good work for people who would come to your home and put it together for you right.

And I would not have spent time sleeping on the floor even though I had a brand new bed.

Dr. Wright
The wright Place TV Show

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