This phenomenon is literally known as the IKEA effect, coined by behavioural scientists Michael I. Norton, Daniel Mochon, and Dan Ariely in their 2011 paper “The IKEA Effect: When Labor Leads to Love”.
That slightly wonky chest of drawers you’ve battled with for the best part of a day? It somehow seems SO much more valuable than the pre-made version you could have picked up instead, simply because you had a part in creating it yourself.
So, why does this matter for businesses?
While this might seem like a simple quirk of human psychology, the IKEA effect is in fact a profound behavioural bias with real consequences for business strategy. Design your services, marketing strategies, and internal culture with this bias in mind, and you can:
However, whilst understanding the IKEA effect and recognising how to harness it is important, it’s equally crucial to recognise when the bias could be working against you. Such as, overvaluing inefficient systems or continuing to push outdated processes, simply because “we built them ourselves”.
From passive consumers to active, loyal participants
Many marketing strategies are based around the idea that customers want effortless convenience. But, when the IKEA effect comes into play, a degree of effort can actually strengthen audience engagement - and overall loyalty.
Let’s take the classic Build-a-Bear formula (as explored in the original report) where customers are given the opportunity to ‘build’ and customise their own teddy bears. Customers aren’t paying for ease here - they’re paying for the satisfaction of both a contribution to creation, and receiving a personalised product.
Sure, building bears is hardly the most relatable model for many B2B services (especially in the digital world), but the overarching principle still applies. For example, a user who’s invested time setting up a new project management tool, or personalising their dashboard, is far less likely to abandon it.
People ultimately move from being passive consumers to active participants, highly valuing the product/service they’ve had a hand in creating or customising. The strategic implication is clear: aim to design experiences that balance convenience with co-creation.
Turn perceived value into pricing power
The IKEA effect doesn’t just influence loyalty; it can also give businesses opportunities to drive more revenue.
Research shows that, because customers typically over-value products/services they’ve partially created, they’ll often pay more for them - even if those products/services are objectively no better than ready-built alternatives.
As a result, this bias allows businesses to command higher margins, provided the effort feels genuinely meaningful. Remember: the value is not inherent in the product/service, but in the psychology of effort itself.
Can effort ever work against you?
As highlighted earlier, the IKEA effect can positively play out for businesses internally, too. For example, by involving employees in shaping new learning programmes or strategies, you’re a lot more likely to foster greater employee commitment to these initiatives. The result? A more positive, engaged company culture and a higher chance of retaining your top talent.
However, when the IKEA effect doesn’t work in your favour, it often comes with costly consequences - and it’s important to catch these instances early.
For example, businesses can become overly attached to home-grown processes or bespoke systems, overvaluing them simply because of the effort invested. This often results in a strong resistance to change, causing inefficiencies and inflated costs in the long-run. (Not to mention potentially disgruntled employees who might feel their organisation isn’t keeping up with the times.)
From flat pack furniture to competitive edge
The IKEA effect is about so much more than the sense of achievement when you can finally throw down the Allen key and admire your new desk. It’s about real competitive advantage.
Effort, when designed with psychology at the forefront, becomes a balanced lever for creating (and harnessing) real value amongst your audience. Too much effort creates abandonment; too little can erode attachment and commitment.
Get the balance right, and you’ll foster increased loyalty from both your audience and employees - and give your business far more leverage in terms of pricing power and margins.
The next step?
Here at Cognition, we help businesses navigate the subtleties of these powerful biases - including the IKEA effect. By grounding strategy in behavioural science, we enable organisations to design customer experiences and internal processes that actually work, tapping into the innate psychology behind how consumers really make decisions and take action.
Keen to learn more? Get in touch and let’s talk.