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January 20, 2014 / glennlim thots

The Power of Ownership

A social experiment was conducted to measure how perceived value affected consumer behaviour. In this experiment, participants were asked to value 2 ready-made origami birds based on some background information, and asked how much they would pay for these artworks? They valued the expert-made bird at 27cts, and the ordinary-made bird at a mere 5cts. The second part of the experiment required the participants to make their own origami birds and bid for their creations. Surprisingly, when asked to value their amateurish creations, most of them audaciously valued their work at 23cts!

birds

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What is the main reason we love Ikea furniture more than other ready-made furniture? A study (M. I. Norton, et al, 2011) found that when people spend an hour putting together a bookshelf, they grow fonder of that bookshelf. They experience a greater sense of ownership because of the labour that went in to the project, and they feel proud of what they construct.

ikea

People have always wondered how Ikea made money when they put out such a lenient 100-day return policy. Well, by leveraging the emotional investment of customers, they manage to increase perceived value of their products. This phenomenon has also been endearingly called the IKEA EFFECT!

Business models have changed in the last decade due to such changing consumer attitudes. In a world where people value participation, empowerment and co-creation of outcomes, it pays for businesses to understand, and employ these principles of ownership. Social media platforms utitlise this effect in giving users the chance (and choice) to update their own statuses, post comments, re-publish etc. Youtube does it with their self-publishing concept. Wikipedia’s content management system allows users to edit, modify etc. Products like ‘Build-a-Bear’, ‘Insta-Cake-Mix’, ‘Seoul Garden BBQ’, and other DIY type products all include elements of cusumer labour, assembly and customisation in the construction process.

Even social services and volunteering projects are now empowering ground-up teams to contribute ideas and dictate the desired outcomes they want for their communities. The result is that volunteers feel purposeful and productive in contributing to a greater good. Because of the vested interest, participants experience the need for ‘effort justification’, where their ownership and commitment increases. They become stakeholders and strong advocates of what has now become ‘their’ work!

This year, let’s remember to incorporate greater sense of ownership in your business or organisational planning, staff teams, volunteers and consumers….Glenn Lim

Since we mentioned the IKEA EFFECT, here’s a cool article on how someone turned his disability into something profitable by assembling Ikea products! Read it here!

Article – Autistic Man’s Gift for IKEA Assemby

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