The IKEA Effect – and what it means to you!?
I think it’s worthwhile you understand a subtle effect which is actually having a significant influence on your work.
This thing is called ‘the IKEA Effect’. And simply put, it means we overvalue what we make.
The ‘IKEA’ reference was inspired by Harvard and Yale studies into the ’endowment effect’. The researchers recognised this same effect in the relationship they had with their IKEA furniture! That is, they placed a much greater value on their IKEA creations than what they had paid for them.
Have you ever tried to throw out a IKEA item? Given the price it shouldn’t be that hard!?
This is just one of those silly biases we all have – which means we place an irrationally high value on the things that we create, and in what we invest our time and energy into.
It is an effect that can have a big impact, both on our audience, and in ourselves.
The IKEA Effect on your Audience
The Investment of Self
All events require our audiences to participate to some degree. To make some effort, to show up, and engage in some way.
The Value of Effort
We sometimes joke that if you can get someone to pay hundreds of $$$ to run a marathon – that you can sell anything. That is, if you can get someone to pay for the privilege of experiencing hours (even months) of pain and suffering, then marketing anything else should be easy in comparison!
But of course we know this is not really what the value exchange is, and that while this considerable personal effort is part of a marathon experience, this investment of energy and sacrifice is actually WHAT MAKES IT so valuable.
Image: Maarten van den Heuvel
This effect can be applied to many other possessions we have, but I do believe the effect is amplified when it comes to events. Especially if you can get people to invest a lot of themselves. As the more invested we are, the more value we associate with that thing. Given people don’t make much ourselves anymore (so much of what we buy is ready made), the investment of personal energy is even rarer in today’s world than it has ever been.
This is a reason why the ability of events to truly engage with people is so valuable!
It is the same with a ticket to an event, we value it more when we have invested so much of our self into that activity, the sport, the team, a band, or whatever it may be.
So how do we harness this IKEA Effect to positively influence our audiences?
1. Lock in their commitment
Remember that once we invest ourselves, we value that ‘thing’ much more. And we spoke a few weeks ago about the power of connection, and if you can get people to commit, to invest themselves into your event, the more value they will place on your event or organisation.
So participants who have been in training with you for your event are less likely to give up. Fans who have have all your merchandise are less likely to switch away from you. If you can lock your audience into making a physical commitment, it is a reminder, a statement to themselves they have personally invested into your product.
2. Leverage their commitment
‘Effort justification’ and ‘Loss Aversion’ are related forces which mean that once we have invested into something, we are motivated to keep doing it. I will talk more about these in coming weeks, but an example is your event entry fee, or a membership paid. When you remind people they have committed, they are likely to respond.These effects are also connected to the ‘sunk costs’ fallacy, whereby our decisions are tainted by the personal investment you have made, in that the more you invest in something the harder it becomes to abandon it. More on that next week!
3. Personalise It
Nike have been genius at enabling their customers to customise their products. And it was the same when I was involved designing Nike events, we created personalised experiences, recognising each individual in many ways. From personalised communications to shirts, to individualised post event videos documenting their ownjourney, and personal messages of support, both on Facebook, and from friends to live on course video screens.
4. Let them Own it
Enabling your audience to ‘choose their own adventure’ within your event experience, or actually designing the event as a whole can create great buy in from your audience. You can ‘poll’ participants, and share back ‘what you told us’ to show that they have created their own event experience.
5. Promote the value of the Live Experience
We all know the value we place on ‘I WAS THERE’ due to the sense of involvement or ownership we have of that experience. If we can remind our audiences what their investment of time and energy will provide, then they may be more likely to show up, and show up again.
‘Experiences are the new luxury good’ – Will Dean
6. Celebrate the Effort
Similarly having your audience recognise how much effort they have put in is important. If you can help them see the investment they have made, they will value your event more. Fundraising targets, attendance or progress trackers, years of membership etc., all remind us how much investment we have made.
“A little sweat equity pays us back in meaning – and that is a high return”
– Dan Ariely (Behavioural Economics guru).These observations all relate to the area of behavioural economics, and the cognitive biases that influence our behaviour. Understanding how we REALLY think, is really important. And next week, we will focus the IKEA Effect on you!
I’ve been applying this to our clients work, both to influence people to come to events, and to help people organising the events. To find out how you can unlock these insights and apply to your work, just let me know.
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