I’d like to talk to you today about the Build-A-Bear workshop. If you haven’t been to one, well you can probably guess what happens. You get to make your own teddy bear. But it’s not cheap – by the time you’ve added your bear’s outfit and shoes, you’re looking at around £30. Has it ever struck you as strange that people are prepared to pay considerably more for a teddy bear that they made themselves than one that came already made (and presumably to a much higher standard)? It’s the same thing with fruit picking. People will pay to go strawberry picking, when you can pick up punnet of ready-to-eat ones for £2 in any supermarket.
So why do we do it? The answer is what psychologists call the labour-love effect – or sometimes the IKEA effect. You value something more when you have had to work for it. It’s a similar story with the packet mixes that you get for making cakes. When they first brought them out, they had powdered egg in them, and it worked fine. But they figured out that people actually want to have to add the eggs themselves, as then they feel like they’re doing real baking. And thanks to the labour-love effect, the cake tastes all the sweeter if you’ve had to do some work to get it.
A good example of the labour-love effect in ecommerce is gambling and gaming websites. Technically speaking, all the site needs to do is display the odds, have the customer click PLAY and then display your winnings – or more likely – your losses. But of course, a site that actually worked like this would be a disaster. People want to feel that they’ve earned their winnings, whether it’s through a game – like those on the National Lottery website – or by carefully choosing their lucky numbers.
Another example is some work that we did here at Endless Gain for Trend Micro. Rather than having their virus software as a free trial, we switched to having customers pay for it and having to download and install it only all their devices – which can be quite a bit of work – on the basis that this would create a labour-love effect. And together with another effect I talk about in another video – price as an indicator of quality – getting rid of the free trial and switching to a paid model brought in over $5m in additional revenue globally.
But one of the great things about the IKEA effect is that, if you’re creative enough, you can use it on your site whatever you’re selling. It might be having customers choose from a range of options to customise their product (as long as it’s not so many as to make it feel like a chore); it might be having them complete a task to win a discount voucher (again, as long as it’s quick and easy and doesn’t put them off). However, you choose to apply it to your site, if you can get customers to feel like they’ve had to put in some work to get the end product, the labour-love effect means that they’re more likely to checkout and complete the sale.