Make Them Build It, They Love It More: Product Lessons from IKEA

The IKEA Effect explains why people value products they build themselves more than those they buy fully assembled. This psychological phenomenon has significant lessons for product managers: involving users in creating, customising, or personalising parts of a product increases engagement, loyalty, and perceived value. Product managers can apply this insight to onboarding, customization features, and user engagement strategies to foster stronger connections between users and their products.

Research why people make the decisions they do, the steps and actions one takes in any given day, week, or even month. People have habits, people have logical decisions, but what you’ll also find is that people do irrational things and make completely illogical choices. There are some great books on this. Our favourite - Thinking Fast and Slow, by Daniel Kahneman. 

Take the decisions, place them under a microscope and what do you see? As a product manager, can you really describe how your users act in the lead up to creating an account? Continuing our product stories series, we’re looking into the less rational decisions customers make and how you can make them love your product even more.

Named after the iconic Swedish furniture company, the IKEA Effect has become an increasingly studied phenomenon in human psychology. Known for their flatpack products which require customers to unpack and build the item themselves (sometimes without following the instructions until it goes wrong), IKEA has become a mainstay in most home improvement projects with an estimated revenue of  €47 billion in 2023. The interesting part about IKEA is that while one might assume customers would prefer a product to arrive fully built and ready to go, studies have shown that the opposite is true and users tend to place great value on products they have a hand in assembling. It transpires that the act of putting in effort, investing time, and contributing to the creation make customers feel more connected with the product, increasing their satisfaction and sense of ownership. Making the customer build it makes them love it more. 

The origin of the IKEA Effect dates back to research by psychologists Michael Norton, Daniel Mochon, and Dan Ariely, who discovered that people tend to value items they create themselves disproportionately higher compared to pre-assembled items. The pride associated with assembling a piece of furniture or solving a puzzle themselves seems to evoke a sense of personal achievement, which can have far-reaching implications for how products are designed and developed. For product managers, this means that allowing users to contribute to the creation or personalisation of a product can make them more invested, leading to higher satisfaction, loyalty, and even advocacy.

The IKEA Effect can be a powerful tool to boost user engagement and conversion rates, creating a deeper emotional connection between user and product. There are several key ways product managers can use the IKEA Effect to drive success:

• User Onboarding: Make It Interactive
  Onboarding is one of the most critical stages for user engagement. Instead of delivering a static walkthrough, product managers can leverage interactive onboarding that involves users actively setting up, customising, or personalising their experience. Consider how a new user setting up preferences, creating their profile, or customising their workspace can foster a sense of ownership. The more users invest effort upfront, the more likely they are to stay engaged and value the product.
  
  
• Customisation Features: Allow Users to Contribute
  Customisation is key to the IKEA Effect. Product managers should explore ways to allow users to personalise the experience to their needs. This could be as simple as choosing themes, arranging dashboards, or creating workflows that fit their habits. When users feel they have had a role in crafting their experience, they are far more likely to stick with the product and advocate for it.
  
  
• Building Communities
  Creating opportunities for users to help each other can also generate value. Think about how users can share their "builds," workflows, or customisations with others. Platforms like Notion, for example, encourage users to share templates they've created, which not only helps others but also fosters a sense of pride and community among contributors.

Examples of the IKEA Effect in Technology

The IKEA Effect is not limited to furniture assembly; it plays out across many successful modern products:

• Notion:
  Notion allows users to create their own workflows, templates, and workspaces, which gives them a deeper sense of ownership. Users who spend time customising their Notion workspaces often become its biggest advocates with some even calling it their ‘second brain’.
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• Zapier:
  Zapier allows users to create their own automations between different apps, known as "Zaps." By building their own workflows, users feel a sense of ownership and accomplishment, which strengthens their connection to the platform and increases loyalty.
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• Trello:
  Trello allows users to create their own boards, lists, and cards to manage projects in a way that suits their workflow. By customising their boards, users feel a sense of ownership, which strengthens their connection to the platform and increases loyalty. By encouraging users to co-create and iterate on designs, Figma fosters a deep sense of ownership and pride in the work, increasing user loyalty and advocacy." By building their own workflows, users feel a sense of ownership and accomplishment, which strengthens their connection to the platform and increases loyalty.

Converting lessons from the IKEA Effect into product features and onboarding optimisation strategies can improve conversion rates and customer lifetime value, however understanding that there is a critical tipping point where the effort required becomes overwhelming leading to frustration rather than a sense of pride and achievement. 

The Effort-Reward Balance demonstrates that if the required effort surpasses the perceived reward or the user’s  capabilities, it can lead to negative emotions such as frustration, dissatisfaction, and ultimately lead to product abandonment. For product managers, there are four key areas to address in assuring that the reward of your feature outweighs the effort required to set it up and operate it.

• Mismatch Between Skill Level and TaskI
  f the challenge of assembling or solving something doesn't match the user’s skill level—being either too easy or too hard—then the experience loses its positive impact. Too difficult, and it causes frustration; too easy, and it fails to generate a sense of accomplishment.
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• Excessive Complexity
  When the steps involved in assembly or customisation are too complex, users may feel overwhelmed. If they can't see a clear path to completion, the effort quickly becomes a source of frustration. For instance, if a piece of IKEA furniture has vague instructions or too many complicated steps, customers may lose motivation and feel negatively about the product.
  
  
• High Cognitive Load
  If solving the puzzle or completing a task requires an excessive cognitive load—essentially requiring the user to remember too much or solve too many challenging problems—the experience may become mentally exhausting rather than satisfying.
  
  
• Lack of Guidance
  Users also give up when they feel that they lack adequate support. If there are not enough instructions, helpful hints, or feedback mechanisms to keep them on track, they may feel lost and abandon the task altogether.

Lessons for Product Managers

For product managers, the key is to strike the right balance between challenge and achievability:

• Progressive Onboarding
  Make the onboarding process incremental, allowing users to achieve small wins along the way. This creates a positive feedback loop that reinforces their sense of accomplishment.
  
  
• Offer Assistance at the Right Moments
  Incorporate helpful guidance at critical points. In digital products, this could be contextual tooltips, tutorials, or support resources that users can access when they encounter difficulties.
  
  
• Break Down Complexity
  Divide the task into smaller, manageable parts so that users can achieve milestones and feel motivated to continue. This is akin to IKEA providing individual steps in their instruction manuals instead of dumping everything at once.
  
  
• Provide a Reward System
  Reinforce achievements by rewarding users for progress. Gamification elements like badges, progress bars, or congratulatory messages for completing stages can encourage users to continue.
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• User Testing
  Continuously test the product to understand the limits of user engagement. Observe when users start to get frustrated and where drop-offs occur. This helps refine the product to ensure the effort remains manageable and enjoyable

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Finding the Sweet Spot

The ideal situation is where users are challenged just enough to feel like they are putting in meaningful effort, but not so much that it becomes exhausting. This concept aligns with the psychological idea of "Flow", where users are fully engaged in a task that is well-suited to their abilities. The IKEA Effect works best when users can feel both challenged and capable, ultimately leading to a sense of pride and ownership. If the experience tips into frustration, however, the positive effect is lost, and users may develop negative feelings toward the product.

The goal for product managers is to calibrate the level of user involvement so that users remain motivated, engaged, and ultimately more connected to the product, without feeling overwhelmed or discouraged.

The IKEA Effect demonstrates that people place higher value on products they help create, making user involvement in customization and creation a powerful strategy for product managers. By incorporating interactive onboarding, offering customisation features, and involving users in product development through beta testing and feedback loops, product managers can foster a deeper emotional connection with users, increasing engagement and loyalty. However, it is crucial to maintain a balance between effort and reward; excessive complexity or cognitive load can lead to frustration and product abandonment. Striking the right balance, providing assistance, breaking down complexity, and rewarding progress are essential for maintaining positive user experiences and leveraging the IKEA Effect successfully.

What is the IKEA Effect, and Why is it Relevant to Product Management?

The IKEA Effect refers to the phenomenon where people place higher value on products they help create. In product management, this means that involving users in building or customising the product can foster greater engagement and loyalty.

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How Can Product Managers Leverage the IKEA Effect During Onboarding?

Product managers can create interactive onboarding experiences where users actively set up, personalise, or configure the product. This involvement increases the users' sense of ownership and investment in the product.

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When Does the IKEA Effect Turn Negative for Users?

The IKEA Effect turns negative when the effort required surpasses the perceived reward or the user's capabilities. This can lead to frustration, dissatisfaction, and ultimately abandonment of the product.
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What is the Effort-Reward Balance, and Why is it Important?

The Effort-Reward Balance means ensuring that the effort users invest in setting up or customising a product is matched or surpassed by the perceived value or reward they receive. If the effort is too high compared to the reward, users may feel frustrated and abandon the product.