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Imagine this…

You’re moving into a new apartment next week.

It’s a 2-bedroom downtown with an exposed brick wall in the living room and a modern kitchen. AKA your dream apartment.

But given the upgraded aesthetic, you know some of your current furniture pieces won’t be making the move with you.

Specifically, the plain white IKEA dresser in your bedroom.

You never thought you’d see the day you’d willingly part with it.

You’ve had it since college. It’s in fantastic shape.

Most importantly, you built it with your own 2 hands. (And it only took 6 hours longer than expected. 🙃)

But it would stick out like a sore thumb in your new space. Le sigh.

So with a tear in your eye, you log into Facebook Marketplace and list it for sale for $349—just $50 less than you paid.

Later that day, you get a notification from a potential buyer asking if you’d sell it for $275.

“The audacity,” you scoff and decline.

An hour later, another potential buyer asks if you’d take $120.

“What’s wrong with these people?!” you think. “I’ll pay to put it in storage before I let it go for basically nothing.”

What bothers you so much about these lowball offers?

In today’s edition of Why We Buy 🧠 we’ll explore the IKEA Effect—why we overvalue things we had a hand in creating.

Let’s get into it.

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🧠 The Psychology of the IKEA Effect

The IKEA Effect got its name from—you’re never gonna believe this—the Swedish furniture store that usually requires some customer assembly, IKEA.

Researchers found that whether it’s building a Lego set, assembling IKEA items, or folding origami, we view *our* creations as valuable as those crafted by experts.

The time and effort we pour into our creations greatly increase their value (in our minds at least).

But there’s a caveat: the IKEA Effect only takes place with the successful creation of something.

If a person fails to fully complete something (or builds it and then destroys it), the power of the IKEA Effect dissipates.

You may be thinking, “Ummm, isn’t this the Endowment Effect?” Not quite.

The key difference is the IKEA Effect specifically requires us to have helped create something, while the Endowment Effect refers to us valuing things more simply if we own them.

But there’s a fine line between “some assembly required” and “you’re on your own, bro”—the latter of which your customers will probably not be happy with.
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🤑 How to Apply This

Ok. So how can you apply this to sell more stuff?

eCommerce​
​Create a customization option to increase perceived value

Nike offers customers Nike By You.

By using this, customers get full control over the design process—from choosing their preferred logo color on *each* shoe to the shoelaces.

This gives customers a way to “build” a new pair of sneakers tailored to their *exact* preferences.

This makes it more likely they’ll love the result (and view them as waaaay more valuable than $160).

Wanna see your brand here? Advertise with us​

Wellness industry​
​Encourage active participation to make goals more valuable

Peloton’s popularity exploded during COVID-19—despite having a hefty price tag.

A major reason for that is Peloton *isn’t* a passive, at-home workout program.

Peloton encourages users to actively participate in their workouts, including through the “leaderboard” feature that shows users in real-time who the top performers are in a particular class.

Peloton also allows users to choose from a variety of workouts to fit their needs—from cycling and strength training to yoga and rowing.

Because Peloton users play a major role in structuring their fitness journey, they’re more likely to stay motivated, complete their workouts, and value the goals they’ve invested significant physical effort into achieving.
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Funnels​
​Develop a quiz to personalize the buyer journey

Personalization is one of the best ways to a buyer’s heart (and wallet).

So Stitch Fix asks potential customers to take a quick style quiz right when they land on the homepage.

Stitch Fix’s stylists then use the unique preferences gathered from those quiz results to curate fashion pieces the customer will likely love that *also* fit their budget.

Because the customer had a direct hand in shaping their new wardrobe, they’re more likely to value their new clothing and accessories.

Bonus points: Stitch Fix offers free shipping and returns to eliminate the risk of Regret Aversion.

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Psst… Wanna go a step further and uncover your best-fit buyers’ selfish desires so you can make more sales?

​Join the PAINKILLER waitlist now >​

We’re officially launching verrrry soon, and you won’t wanna miss the surprise bonuses. 👀
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💥 The Short of It

Customers want to feel like they’re part of the creation process.

So one of the smartest things you can do is incorporate their feedback or preferences into your product or service.

Customers are more likely to value (and be happier with) the outcome this way, which can lead to more repeat purchases.

Win-win.

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Until next time, happy selling!

With ❤️ from Katelyn and Jordyn​

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Psssssst: Hans Kuhle used 1 science-backed copywriting technique when he wrote this 5-star review for Wallet-Opening Words.

Do you know what it is? Hit reply to share your guess.

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