The IKEA Effect: Build Customer Loyalty The Swedish Way

by | May 16, 2017

Is it possible to build customer loyalty with consumers who have never been to your business before? According to theories surrounding the IKEA Effect, yes!

My brother recently moved into a new place and decided to pursue a fresh start. He tossed out his old coffee table and strolled into a local furniture retail store, looking for a good deal. Twenty minutes later, he called me and complained about how the store tried to convince him to finance his purchase. He was outraged because the interest alone would have cost him twice as much as the table he wanted!

Ikea effect, Build Customer Loyalty

“We should just go to IKEA,” I quipped, interrupting his rant about overpriced furniture.

This was an odd suggestion to make. Neither I, nor my brother, have ever set foot in an IKEA before. He was on board, though; until we realized the nearest IKEA store is over 300 miles away in Salt Lake City, Utah.

So my brother was back to square one. And I was left wondering why I recommended a store I’ve never shopped at before. Thinking on it, I realized my IKEA advocacy comes from the fact I know many people who have shopped at IKEA and love their furniture. I’ve always found this affection to be a bit strange. I mean, some of their furniture could be destroyed by a stiff breeze.

This is a phenomenon psychologists call the IKEA Effect. It’s what gave one Swedish company the power to build customer loyalty around the world.

More Than Just Good Meatballs

Part of what makes IKEA so successful is the unique experience it offers customers. After exploring the dazzling showroom and surviving the battleground that is the IKEA marketplace, you, the customer, are awarded with your new furniture in a flat pack and instructions on how to build it yourself.

Supposedly difficult to put together, IKEA’s furniture has been the subject of countless comedic internet videos highlighting the challenges presented by the company’s products. Perhaps you’ve
had your own struggles with a NORNÄS bookshelf. But where such challenges would typically turn customers away, IKEA inspires the opposite reaction.

Build Customer Loyalty

In research published in the International Journal for Research in Marketing, Daniel Mochon from Tulane University’s A. B. Freeman School of Business explains how the IKEA Effect brings joy into what would otherwise be a frustrating experience. Mochon notes that consumers are more inclined to value a piece of IKEA furniture they put together themselves over a pre-built item of higher quality.

At first glance, one might assume this is simple effort justification, the tendency to assign a higher value to a goal that demands a higher level of effort. But Mochon’s research found there is more to the story.

Build Customer Loyalty

Human beings want to feel accomplished. Many people find their self-esteem in their accomplishments. This is probably why modern consumers are no longer content to have companies create a product and convince them of its worth. They want to feel like they are a part of their purchasing experience. They want to play a role in the grand scheme of things.

ikea effect

In his study, Mochon determined that individuals feel a “sense of competence” when building their own furniture from IKEA. Aiding in the construction of their purchase elevated them from the role of consumer to active participant. They grew from one who simply purchases products to one who plays an important role in the world.

This sense of competence may seem like a minor thing. But as the PBS Idea Channel points out, IKEA’s ability to deliver on our need to feel accomplished works wonders. It says an awful lot about the human condition.

While constructing IKEA furniture can be trying, and while walking into an IKEA store is a test of courage in its own right, IKEA builds a connection with their customers through this challenge. Giving customers a sense of purpose and letting them play a larger role in their purchase has proved to be a great success in IKEA’s past and is the foundation of their bright future.

Through this, IKEA is able to inspire something incredibly valuable in their customers: loyalty.

Use The IKEA Effect With Your Own Customers

Research from the Harvard Business School showed that, whether it’s an origami crane, a Lego set, or a BJURSTA table, people “saw their amateurish creations — of both utilitarian and hedonic products — as similar in value to the creations of experts, and expected others to share their opinions.” Basically, if we made it ourselves, it must be worthwhile.

ikea magazine

With this in mind, it’s easy to see how even non-furniture-related businesses are learning to use the IKEA Effect to their advantage.

User-generated content is a huge tool that businesses should take advantage of — social media makes it easier than ever. By inviting customers to respond to products or services, make suggestions, and interact directly with a company outside of the traditional format, user-generated content promotes customer engagement.

The IKEA Effect can also build customer loyalty right from the start. This is especially true when utilized in the onboarding process — or to boost your internal processes by improving company culture.

When a company utilizes the IKEA Effect, customers — and employees, too — perceive themselves as playing a role in that company and, in turn, feel a greater sense of investment. Who could ask for better loyalty than that?

My brother still needs a new table, but thanks to IKEA’s catalog, he won’t have to take a road trip to experience the IKEA Effect for himself. This “old school” marketing technique keeps the Swedish giant in touch with customers around the globe. If one of the world’s biggest companies uses direct mail, isn’t it time you do, too?

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