Ikea Effect
Humans value things relative to the amount of time, energy, and money we personally invest to complete them. This psychological phenomenon is one of the primary reasons behind IKEA's success. The time and effort taken to build a piece of IKEA furniture is built into the value that people place on it.
Key Insights & Principles
Decision Making
Insights:- We tend to overvalue our own ideas and creations.
- Our ego can lead us to make irrational decisions by overvaluing our own ideas.
- Research before you buy and weigh up how much effort is required.
- Include the value of your time in your decision making.
- Get an independent opinion.
Product Design
Insights:- Ask customers for too much effort and you might drive them away, too little and you lose the opportunity to build attachment.
- Value to customers can be created from their own involvement in customisation, personalisation or building the product.
- Give customers the ability to be involved in building the product.
Book References
