The IKEA Effect: Why Going Digital May Not Be All It’s Cracked Up To Be

A few years ago police in Sweden were called to what they were told was a domestic disturbance.  Neighbours had heard all sorts of banging, yelling, screaming, swearing and crying coming from a house where a couple lived with their young son, and feared the worst. 

The police did not walk into a domestic disturbance; rather, what they found was that the couple had merely been trying to assemble a piece of IKEA furniture, and had run into some difficulty.  Hence the banging, the yelling and the swearing.  The young child was frightened by all the commotion, and started crying and screaming. 

That is the Ikea Effect. 

Well, actually it isn’t.  The term “Ikea Effect” was coined by a trio of academics in 2011, and really has nothing to do with the physical and emotional reaction to missing parts, unintelligible instructions, or assembly processes that require a gymnast’s flexibility, a weightlifter’s strength, and an octopus-like capability to hold multiple pieces together while inserting the right lock screws into the right holes.  The term has nothing to do with the frustration and anger that often accompanies the assembly of a storage unit from a boxful of bits.  It does not describe, for any children nearby, the rapid expansion of their vocabulary that will impress their friends and shock their teachers.

The Ikea Effect, as introduced by Michael Norton, Daniel Mochon and Dan Ariely in a working paper for Harvard Business School in 2011, describes the psychological phenomenon whereby people give greater value to a product when they have played a part in building that product.  The subtitle of their study was “When Labour Leads to Love.”   The trio found that the labour involved in creating something, in this case an IKEA box, an origami, or a set of Lego, resulted in a higher value being put to the creation than if the item was provided pre-assembled.  Mere ownership of the product didn’t produce the enhanced value – there had to be some active involvement in its creation.  Furthermore, the labour must be successful – if the assembly effort failed to produce the end product, or if the product was subsequently disassembled, there was no increase in valuation.  So, successful labour leads to love.  The Harvard professors also showed that the quality of the end-product wasn’t critical – the value was created by the process of building, rather than the quality of the output.  And, that the effect was present in those more inclined to “do-it-yourself” as well as those who generally avoid any type of assembly. 

The IKEA Effect runs parallel to the concept of “effort justification,” which was described by Festinger sixty years ago as being that the more effort people put into some pursuit, the more they come to value it.  We strive to justify the efforts we make to achieve a certain goal, whether it be joining a club (by completing an initiation process), or completing a work task, or building a Billy bookcase.   Conversely, if there’s no effort, there’s no justification required – the completion of the task or the acquisition of the end-product is not valued as highly.

Interesting, but so what?

The Ikea Effect may seem like a trifling bit of psychological fluff, but it also may have significant implications for a wide variety of daily activities.  In business, for example, it relates to a “not invented here” syndrome, whereby the product of one’s own labour may be overvalued when compared to others’ higher quality output.  Another example is the overvaluing of sunk costs, when more and more resources are spent on failing projects or activities (“throwing good money after bad”).   I’m susceptible to the IKEA Effect in that I likely attribute significantly more value to the DIY home improvements I have completed than would a potential home buyer.   What’s particularly interesting, however, is that while the IKEA Effect results from engagement and involvement, both are being reduced or eliminated in new products and services.  My new digital or internet-based products may be hellishly convenient, but do I see them differently due to the IKEA Effect?

In a previous blog piece, I described the fact that we value items paid for in cash more than we do those items paid for by a direct means (debit, credit, etc.).  With cash, there’s more involvement of the customer in the purchase process, and more effort required to complete the transaction.  I wondered whether this sort of justification also applied to digital services currently being developed and introduced.  After all, the basic premise of many of these services is to make things far easier for the customer, largely by reducing or eliminating the need for active involvement in acquisition or even in benefiting from its features.  If the IKEA Effect holds, one could surmise that by reducing the customer effort enough, the provider may create an unintended consequence – a reduction in perceived value, and in affinity to the provider.  Customers become mere consumers and/or benefactors rather than participants in the process. 

Many years ago the originators of instant cake mixes discovered that the mere addition of an egg, to be beaten into the mix by the user, added just enough involvement and self-satisfying participation to the cake baking process to make customers happy.  It added just enough labour to the process to increase the perceived value of the resulting cake. These days, however, we are eager to take the “eggs” back out of product or service enhancements.  Any step or activity that requires work or introduces any level of inconvenience or discomfort to the customer is to be eradicated through digital means.  For example, it used to be that if I wanted a loan or a credit card, I filled out forms, provided some detailed information about myself and my finances, and submitted it for evaluation.  I was an active participant in the process, which included a certain level of effort and even some discomfort.  Now, as evident by my recent experience in acquiring a new credit card, I can gain a product having hardly inconvenienced myself at all.  A couple of clicks and my new card arrives in the mail a few days later.  Similarly, loans can be granted with minimal customer involvement, based on such passive information as one’s social media profile, residence history, and credit score.  It’s all very easy. 

So, how does one preserve the IKEA Effect?  What’s the solution?  Is it to avoid simplification, making sure that customers continue to experience discomfort and inconvenience?  No – there is still great value to be gained in simplifying products, services and processes.  Cake mixes are extremely popular for a reason.  But, simplification and enhancements can be taken too far.  If the customer is taken out of the process to the extent that their required effort is negligible, any improvements may be for naught.   As noted above, effort justification results in a higher attributed value or other satisfaction with the outcome.  One can turn the old adage “if it’s not worth working for, it’s not worth having” into something like “if you haven’t worked for it, it’s not worth having.”  On the other hand, if the effort required is excessive, then there is more likelihood of abandonment or non-completion.  As Norton, Mochon and Ariely found, for the IKEA Effect to occur, there must be successful completion of the task. 

There has to be a Goldilocks-like balance.  Enough effort so the customer remains involved and engaged, willing and able to follow the task through to completion.  Not enough effort so that they get discouraged and incited to leave.  If my new credit card arrives with scarcely any involvement from me beyond a request for a card, my immediate thought is that they give these out like candy, so could I have gotten better features on someone else’s product?  I feel like telling the company that if they make me jump through at least one hoop maybe I’d like the product more.   Meanwhile, I’m not about to outsource my grocery purchases to my fridge, or my home comfort to my thermometer, or my entertainment to a music service from Sweden, or my driving to a hackable computer.  Call me a Luddite if you want, but I just want to be involved.  And, due to the IKEA Effect, I’ll be happier for it.

Find the digital equivalent of the egg in the cake mix.  And hand me that allen key. 

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