Giving Greater Value to What We Make Ensures Success

They have 313 stores in 38 different countries and their growth is due to their business model, in that it revolves entirely around you, the customer, who does half the work for them.

When it comes to explaining the success of IKEA, traditional explanations may refer to flat packaging of furniture and how this saves transportation costs and prevents furniture from being put together. Those aspects are a partial view of what is really responsible for your success. In reality, the aspect of IKEA that creates enormous customer value is psychological value.

The idea is: work leads to love. When we work to create a product, we love the product more, and this is how Daniel Mochon, one of the original researchers of the IKEA effect, describes the phenomenon.

Imagine that you build a table and maybe it comes out a little crooked. Your neighbor would probably see it for what it is – a shoddy work of art – but to you, that table may seem important because you are the one who created it. It is the fruit of your work, and that is the idea behind the IKEA effect.

Michael Norton, Daniel Mochon, and Dan Ariely first investigated this idea that labor leads to love in a study entitled "The IKEA Effect: When Labor Leads to Love." The experiment involved people building origami, so they had two groups: the builders and the non-builders.

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The builders were given origami paper and instructions and told to make a beautiful crane. These people were hobbyists and the cranes they made didn't look so good, but when they were finished, the researchers asked the participants, "How much would you bid to keep your own crane?"

There was another group that was also bidding for the cranes, and they were the non-builders. These people did not build the origami themselves. The results showed that the people who made the origami were willing to pay much more money to keep their creations than those who did not build the origami at all.

What's even more interesting is that they also asked non-builders to see how much they would be willing to pay for expertly created origami and what their results showed was that non-builders were willing to spend much more for expertly made origami. even more, than builders are willing to pay for their work.

This study suggests that when we build something, we take pride and become emotionally attached to it. We value what we've created even if it seems unprofessional.

However, when outsiders evaluate what we have built, they can rate the product much more objectively than we can and therefore would appreciate a higher quality product. This effect applies to IKEA furniture, where you have to build some of the furniture yourself, but maybe it can be extended to other products you buy.

Not only are you getting value from being able to create a design that you like, but what the research suggests is that you are getting additional value from the work that goes into putting together and enjoying the final product.