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How to Use IKEA to Increase your Customer Engagement and conversion?

March 28, 2023

The key to capturing your audience's attention may be in marketing psychology. Behavioral economics can make all the difference in the world when it comes to engaging potential customers and earning their trust.

What is Behavioral Economics?

Behavioral economics incorporates the study of psychology into the analysis of economic decision-making, such as the factors leading up to a consumer buying one product instead of another.

What is IKEA Effect?

The “IKEA Effect” is a cognitive bias that implies consumers place a disproportionately high value on items that they have played a part in creating. In the 1950, the story goes, US food company General Mills wanted ideas on how to sell more of its Betty Crocker brand of instant cake mixes. It put psychologist Ernest Dichter – the “father of motivational research” – on the case.

Dichter ran focus groups. Change the recipe, he then advised the company. Replace powdered eggs in the cake mix with the requirement to add fresh eggs. All-instant cake mix makes baking too easy. It undervalues the labor and skill of the cake maker. Give the baker more ownership in the final result.

Almost seven decades later, the idea of making things more laborious to get consumers to value them more is an established marketing tactic.

We now know it as the “IKEA Effect”.

The IKEA Effect – “that labour alone can be sufficient to induce greater liking for the fruits of one’s labour” – was named in a 2011 paper in the Journal of Consumer Psychology by Michael Norton, Daniel Mochon and Dan Ariely. They chose the name because products from the Swedish manufacturer typically require some assembly. They conducted a study where two groups of participants received IKEA boxes. The first group needed to assemble the Ikea box, while the other group received an already assembled box. The participants then had an auction for the furniture. The results showed that the builders were willing to pay 63% more than the non-builders, even though the furniture looked identical. This study, was part of a four part study that formed the foundation of the IKEA Effect.

The IKEA Effect is all about how personal investment in a process creates and increases value. In this article, we will explore how to engage customers with the IKEA Effect.

The marketing challenge lies in convincing consumers to engage in the kinds of labor that will lead them to value products more highly, especially given their general aversion to such pursuits. A few practical ways to engage customers with the IKEA effect is through experiential marketing, customer experience optimization, automated and triggered campaigns, feedback calls, encouragement and community building.

How can you do it?

Make it an experience - The Apple Store is not just about shopping, it is an experience. Apple revolutionized the shopping experience by creating a space that didn't just allow customers to shop and browse, but to fully be immersed in the brand. Customer experience optimization is one of the latest buzzwords in the world of marketing. It extends beyond stores and events and includes every part of the customer journey and interaction with your brand including your web presence, advertisements , social media, customer service, quotes and documents, etc. The IKEA Effect is about personal investment and engagement. So marketing professionals want to not only engage with their customers, but get their customers engaged throughout the entire customer journey. One way of doing that- is offering potential customers to try out  the product in exchange for feedback. This  “try before you buy” experience helps to increase engagement of the customer with your product.

Advertise to an audience of one - Customize your marketing to address the specific needs and desires of your target market. Be responsive in your marketing. If a customer reads a blog post about a specific topic, lead them to a relevant product or  resource. Set up automated campaigns for specific stages of the customer journey or triggered campaigns based on their interaction with your website, social media or other marketing campaigns.

Be customizable - Allow your customers to customize your product or service. Build-a-bear Workshop is a well known product that is built on customers, young and old, being able to design, customize and build their own cuddly toy. Are there elements that you can let your customers choose? Add-on? Upgrade? Replace? The more customizable your product or service; the more engaged and invested customers are in the process; the higher the value of the product.

High-fives and progress bars – Everyone wants a little bit of encouragement. If you're offering a multi-step product or service, then engage customers with micro-feedback methods like high-fives and progress bars.

Understanding how we as humans make decisions is an important part of marketing. Research into decision making and psychological processes through behavioral economics provide insight into buyer behavior and can help to shape your marketing mix. If you want to learn more about how to incorporate this principles in your marketing

Schedule a call to see the latest findings from our behavioural economics lead campaigns:

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