A (5:08)

Mike ran studies on origami cranes, Lego sets, and IKEA storage boxes. He enlisted two groups with 52 participants for an experiment at a southeastern university in the United States. In probably his most well known study, he enlisted two groups with 52 participants for an experiment in a southeastern university in the United States. Each participant, compensated with $5, was assigned to one of two groups. The first group, called the non builders, were given a fully assembled plain black IKEA box to inspect. The second group, called the builders, were given an unassembled IKEA box and the assembly instructions and told to assemble it. Once the boxes had been inspected and assembled, Mike and his colleagues asked both groups how much they would pay for the identical containers. Those who had merely inspected the completed box were willing to pay just 48 cents for it. But those who had built and assembled the exact same box themselves were willing to pay 78 cents, a 63% increase. The Ikea effect won't just change our perception of value, it'll actually change our performance as well. In 2022, Kocher and Wilcox found that golfers performed better with a golf putter they had assembled themselves compared to an identical pre assembled Putter. And in 2013, Castro, Samuels and Harman found that the IKEA effect could help kids eat healthier. Researchers asked some children in the study to help them with a small local vegetable allotment. So these children were encouraged to plant and harvest their own veg. Compared to a control group, the children involved in harvesting their own vegetables lowered their BMI because they started eating far more vegetables. Not only the vegetables they harvested, but also shop bought vegetables too. Dozens of studies reveal results like this that back up Mike's initial finding. But I wondered if Mike's views had changed since that 2011 study. I asked him.

B (7:06)

My views have changed a bit over time. I don't remember the wording in the paper, but I, I bet that we used words like overvalue, in other words, because other people would pay less for mine than I would. I've overvalued it. And that is true in a market sense. You know, if I wanted to sell mine, I'm not going to be able to sell it because my price is way too high. And we do see that in the market. But it's also like, what kind of value are we talking about? Because what I actually did magically in a sense is I got you a piece of paper which you would have just not even looked at and turned it into something that you really love. That's like an incredible trick that we have this in. I don't mean I'm trying to trick people, but I do it to myself as well. We're able to take very mundane things and invest them with ourselves and then really come to love them and value them and see them as important. So for me, they're not really overvalued. Actually, technically, in the market sense, we have the pricing wrong. But compared to what? I mean, why not invest a little bit of effort in things that you're going to end up loving, even if everybody else hates it? You've done something that you feel proud of, and to me, that's a huge source of value. That's important.

A (8:15)

There is an important caveat here, however. In an additional study on the IKEA effect, Mike asked people to build boring IKEA boxes again, but with new constraints. He allowed some people to finish building the box, while others were made to stop halfway through. Those in the latter group who had stopped halfway through, they put in some of the effort but hadn't completed it, weren't willing to pay nearly as much for the box, even though they could have finished it right after purchasing it. Incompletion made the ugly box remain just a box, while completion only a few more steps transformed it into something far more valuable. The IKEA effect will only work if the product you are building is finished. But does it work for people of all ages? Well, a developmental psychologist team studied 64 children between the ages of 3 and 6 years old. The children were given two different toy monsters, both made out of foam, to play with. The children were told to make the first toy monster following a set of instructions, while another group of children who were given the second toy monster didn't need to make it, and they only had a brief amount of time to look at it. The researchers found something interesting. Children aged five to six rated their homemade toy monsters more highly, but three to four year olds did not. This suggests that slightly older children exhibit the IKEA effect because they've matured into a more cohesive sense of identity, while younger children, they're not influenced by the effect. Regardless, the impact of the IKEA effect is everywhere. It determines the success or failure of some companies.

B (9:50)

One of the funny places that we kind of saw this principle, that effort is important and valuable, that we saw that play out in the world. My collaborator, Ximena Garciarada, who, as I mentioned, studies decision making in couples. She and I both had kids around the same time. And she was on, as I was as well, on parenting boards to try to, you know, figure out what to do and what to buy and things like that. And she found this one that was talking about the snoo and people were very, very angry about the snu. People wrote really hurtful comments about people who used the snu. Really angry comments. So the snoo is a crib that rocks your kid to sleep, basically. And it's kind of high tech in the sense that it can sense how they're doing and adjust the swinging and things like that so that they get a good night's sleep. If you've ever had a kid, you know that you're getting a newborn to sleep is it's your entire life for a period of time is just sleep. Are they sleeping? Am I sleeping? Who's sleeping? So it's an incredible invention to have any product that can help your kids sleep. So what's the problem is that parents would say, you shouldn't even be a parent. What kind of a parent would use a machine to help their kid fall asleep? You know, you're a terrible person. I would never do that. It's an awful thing to do. Why are they so upset about it? And I bet you feel a little bit in yourself, as I did. Also is shouldn't you, if you really value something, put the effort in yourself and not rely on some machine to do it for you? We're seeing right there, that's the IKEA effect in action, right? It's that effort is to be valued. And a lack of effort shows a lack of investment and a lack of care. And in that research, that is what we see, that people actually will not buy products that will help them save time with parenting or other things because they feel like they are bad caregivers if they do it. So we have almost like a reverse psychology on ourselves where effort makes us feel good, but a lack of effort makes us feel bad. And that's why people do things like, you know, my friend is sick in the hospital and I could get buy some cookies that are really well made at a store that the person really likes. And instead I want to make the cookies from scratch and bring them in and they're gross. But I feel better about it than having bought them in a store because I put effort into them to show you that I care. So you're not really right or wrong to put effort into things or not. It's just a different psychological experience to either put the effort in yourself or as all parents should rely on help from other things as well.

A (12:30)

This is a slight variant of the effect. It shows how effort is valued. SNHU failed because it allowed parents to skip out on effort. Betty Crocker discovered the same problem. Now I've shared this on Nudge before, but when Betty Crocker created cake mixes after World War II, sales initially rose before starting to drop dramatically. Something was causing shoppers to stop buying the once popular cake mix. Psychologist Ernest Deiter was hired to investigate. Through focus groups, he learnt that customers confessed to feeling guilty trying to save time by using the mixes. Time in the kitchen and more specifically time spent baking a homemade cake was a love language for young women in the mid 20th century in America. One 1953 Gallup Poll rated cake as the second real test of a woman's ability to cook, just behind the apple pie. So the psychologist concluded that Betty Crocker's sales were dropping because customers weren't putting in enough effort. Now when Betty Crocker changed their formula and forced customers to put in more effort, that was by adding liquid and an egg to the mix, not just getting out the electric mixer to mix the mix itself. Now bakers had to add liquid and crack an egg into the bowl before getting out the electric mixer. Consumer experts cite this as the moment that Betty Crocker cake mixes took off. It was a turning point in of packaged food. This small bit of extra effort, just one more step. Putting that egg in, putting a bit of liquid in, allowed the customers to feel more invested in making the cake. Modern day companies have leveraged these same insights. Blue Dragon uses this principle in its curry kits. By dividing the ingredients into separate units. The kits require more work on the cook's part which boost their appreciation of the end product. Elsewhere, Apple has applied this principle to their packaging. Journalist Tom Vanderbilt said Apple spent months creating the right amount of friction to their opening process. He writes how they created a box with the perfect amount of drag and friction on opening to introduce an exciting pause as you unveil your new phone. The result is not a container, but a carefully orchestrated ritual. You do not merely open this box as if you were tearing into a packet of crisps. You are welcomed inside. Effort is valued. Something that requires more effort is appreciated more. And simply seeing the effort that has gone gone into a product or service will boost your appreciation of value. In another study that I have cited before on nudge, four researchers conducted studies with 131 people who took a brewery tour. The researchers surveyed people before and after they took the tour and compared the answers. Those who took the tour were 24% more likely to recommend the brand to those who hadn't taken the tour yet, and they were 32% more likely to buy the brand. Seeing the effort that goes into making beer makes customer value the beer More this insight has a technical name. It is known as operational transparency.

B (15:27)

Showing the work that you are doing can have a positive impact on customers. So my colleague Ryan Buell has done a lot of research on what he calls operational transparency, which is literally allowing people to see the work that you're doing, allowing customers to see the work that you're doing on their behalf. And he shows that when you see that work being done, you come to value it more highly and in part you think that you should reciprocate. So this company is doing so much for me, the least I can do is buy a product from them. So it's a very interesting loop actually with showing effort as well, where absolutely that can an impact on consumers perceptions of products and services.

A (16:10)

Ryan Buell first noticed this when ordering food. He noticed how he could watch freshly glazed donuts move along conveyor belts behind the glass at the local Krispy Kreme store Subway beckone him to observe the production of his sandwich, while high end establishments present open kitchens, letting diners see the food being cooked. His 2014 paper studied this principle. He created real world restaurant settings and conducted experiments where customers could either see food being created or not. In the field experiment, he found that simply seeing food being made contributed to a 22.2% increase in customer reported quality. Customers who observed employees engaging in labor perceived greater effort. They appreciated that effort more and therefore valued the service more as well. And interestingly, it works the other way around too. Employees who observe customers consuming the food or the product or whatever it might be, felt that their work was more appreciated and more impactful and thus were more satisfied with their work and more willing to exert effort. Effort is rewarded. This left me wondering whether I could exert more effort to help my business. Could I run an experiment to test Mike's findings for myself? Let's get on to that after this quick break. Once on holiday, a local asked me to explain what marketing actually is and I struggled. How do you even begin to describe marketing? You have to generate leads, you have to score leads, you have to contact leads, you have to create content, you have to gather data and the next day you'll need to do it all again. And you wonder if it's even working. It's clear that marketers are spread far too thin trying to do so many different things. But HubSpot really can help. With the help of Breeze, HubSpot's collection of AI tools and features like Content Remix can really help. With Content Remix, you can turn one piece of content into a suite of assets. With HubSpot, you can also pinpoint the best prospects with a predictive lead scoring system. And you can level up your campaign's KPIs with a new analytics suite so your day to day becomes less busy work and more driving revenue through the roof. Even if all of that won't actually help me explain what marketing is, visit HubSpot.com marketers to learn more. Hello and welcome back. You are listening to Nudge with me, Phil Agnew earlier this year, Mike spoke at Nudgestock, the excellent behavioral science conference hosted by Rory Sutherland. At the conference, Rory shared a fascinating example of operational transparency at Starbucks. Except this example was rather different. Instead of customers valuing Starbucks more because they could see effort, customers weren't enjoying their Starbucks because creating the coffee looked effortless. Here's Rory to explain.

C (19:05)

Starbucks actually forced people. They said, stop making two drinks at once. In fact, sorry, you're only allowed to make two drinks at once. They actually deliberately slowed down the process because they realized that the parallel processing, the batch processing of coffee, was destroying the experience for the consumer because they didn't feel they were getting a handmade coffee, they just felt they were part of a kind of Fordist production line and they deliberately slowed the process down.

A (19:30)

Starbucks told their baristas to stop making four coffees at once. The speed made the production look easy. The baristas didn't look highly skilled. The process looked effortless, and that made the experience worse. By slowing down, the production appeared more effortful and Starbucks customers started to enjoy the coffee more. Effort changes perception. Rory says this is not only the case for Starbucks customers, but also for homeowners. Here's another fascinating example from Rory.

C (20:01)

These people had triplets. They wanted to buy a house in Chesterfield. They wrote a handwritten letter to 15 people who had a house they'd like to buy but which wasn't on the market. Or 25 people, it might have. About eight people responded. Five people, I think, invited them round and they had offers from four of those people. Now, bear in mind, none of those people had their house on the market. When you think about it, that's pretty weird. A life decision as momentous as do we want to sell our house? No. Is changed by a handwritten Letter. That's an extraordinary act of persuasion. That's an extraordinary kind of nudge. It's an extraordinary kind of stimulus. And I think it works precisely because of the effort they invested in the communication. I genuinely think the weight of that communication was driven by the fact that it was actually handwritten.

A (20:50)

This inspired me. Handwritten letters are powerful, not only because they're different and distinctive, but because they naturally showcase effort. If I wrote someone a handwritten letter, they should value my communication more because they would know I've put more effort into writing it. So I wanted to test this idea on my subscribers. Can I send handwritten notes? To encourage my subscribers to leave me a five star review, I asked Mike what he thought.

B (21:18)

There is research on the effect of handwritten notes versus pre printed notes versus pre printed. And you sign it yourself. You know, you can think of all the different ways that we do that. One of the things that's happened now though is consumers are not stupid. And so sometimes now when they get handwritten things, they say, I know what they're trying to do. They're trying to handwriting things so that I'll feel good about it. So the principles are there for sure. We see in many contexts, effort plays an important role. But also consumer skepticism can mean these things don't work at all. If I'm already not trusting you and now you're trying some of this marketing stuff on me, it may not work. So it depends. Your listeners are probably extremely sophisticated in behavioral science. So if they got a handwritten letter from you, they would be like, yeah, that's that paper that I read a couple years ago. I see what he's trying to do to me. So it really, it's a little bit of an audience problem as well.

A (22:12)

Mike's not sure it'll work for me. He wonders if my audience will know they're being nudged and perhaps react badly. But I still wanted to test it. So I created my little experiment. Over 10 days, I sent 32 emails to new Nudge subscribers. All of the emails had the same message. They said, hey, James, or whatever the recipient's name was. Cheers for subscribing. Could you do me a favor and leave Nudge a review? Just click the link below. Cheers, Phil. 16 subscribers received that full message as a standard email written on my keyboard and sent normally. Sixteen other subscribers received that email, but as a handwritten note. I'd photograph that note and email them a picture of the note. Then, using the app RateThis Podcast, I created two unique links for people to review the podcasts. The subscribers in the control group received one link. The subscribers in the handwritten variant group received the other link. With these links, I could measure how many subscribers in both groups clicked the link and how many actually left me a review. So the results? It turns out, maybe unsurprisingly, that handwritten notes were far, far more effective. Only two of the 16 who received the standard email, the control email, well, only two of them clicked the link and only one left me a review. So not very many considering I sent 16 personal emails to people. Yet for the handwritten email, nine out of 16 people clicked the link and four went on to leave the review. It is tiny numbers and it's obviously not statistically significant, but the click rate improved by 350% and the review rate by 300%. It proved to me, at least, that my email subscribers do seem to reward effort. This effortful handwritten note was far more effective at driving reviews, despite both variants containing the exact same message. Hard work and lots of effort pays off. I've just finished listening to Stephen King's fantastic book on writing. In it, he explains how he arguably became the world's most successful and prolific fiction writer. He says, if you want to be a writer, you have to read a lot and write a lot. There is no way around these two things as far as I'm aware. In other words, the secret to success is more hard work and more effort. Okay folks, that is all for this week. Thank you so much for listening. Massive thank you to Professor Mike Norton for coming back on Nudge. If you want more of Mike, do go and pick up a copy of his latest book, the Ritual Effect. It is fantastic. It covers his work on the IKEA effect and all of his latest studies on rituals. I would highly recommend it. Now, I would usually ask you to go and leave Nudge a five star review, but we're rolling in reviews after my last experiment. So you don't have to worry. You can relax, put your feet up, don't bother leaving me a review and I will see you next Monday for another episode of Nudge. Cheers.