Tuesday, February 12, 2013

The "IKEA Effect"

In the 1940's and 1950's, American food companies began making cake mixes. To make a cake, all the housewife (it was the 50's) had to do was add water and bake. These mixes were convenient, quick, and easy to prepare; the only problem was that nobody bought them. Market researchers found that they were "too easy," that women wanted to feel like they were making an effort to feed their families. The companies removed the powdered eggs from the mix, changed the instructions to "add 1 egg," and the problem was solved. The act of breaking and adding an egg made the family cook feel like she was part of the process. Psychologists have dubbed this behavior the "IKEA Effect." This is based on the fact that people overvalue IKEA furniture because they can point to a bookcase with pride and say "I built that!" The act of assembling a piece of furniture engages them physically and emotionally. This gives them an enhanced sense of ownership that far surpasses their feeling for a piece that was delivered ready to use.

What does this have to do with selling advertising--everything! If we can get a prospect involved in creating their program, they are much more likely to buy it and much less likely to cancel. My company uses software from Tactician Media to map out a customer's coverage area. I will take my laptop into a call and locate the customer's business on the map. I hand them a pencil and ask them to point out where they would like to sell their products. I keep adding these to the map. When I am closing the sale, they often tell me they want to cut the cost. I take them back to the map and ask them which areas they would like to cut. Since they have personally chosen the areas, they have a hard time cutting them out. In the ancient days before laptops, I would use a similar method with a blank map and a highlighter

Another technique I use is getting the customer involved in designing an ad for their business. We work together to determine what consumers need to know about them. I ask a lot of questions like, "What kind of art do you think would work the best?" This engages them fully and like the map example above, they are very reluctant to cut anything out.

You can use the "IKEA Effect" to engage customers and get them to take ownership of their advertising. When they are involved they are less likely to quibble about price or to cut back. When they are involved in the process, you are no longer talking about "an" ad; you are talking with them about "their" ad.


Jim B.