• by Mansi Jayakumar , Columnist, January 25, 2016

In the early days of instant cake mix, all housewives had to do was add water and bake. It was that simple. When people didn’t quite take to the product, companies re-engineered their cake mixes with one small modification. The recipe now required the adding of a fresh egg and voila! Sales soared. It turns out that housewives wanted to feel more involved with the process. This crucial step made women feel less guilty about taking shortcuts and instead gave them a sense of ownership over the final product. They felt like they were baking cakes from scratch and, in turn, instant cake mixes invaded all kitchens across America.

There is an inherent cognitive bias touted in Behavioral Economics as “The Ikea Effect” – defined in Wikipedia as a bias where “consumers place a disproportionately high value on products that they partially created. The name, of course, comes from the Swedish manufacturer and furniture retailer Ikea, which sells home furnishing products that require partial assembly.”

We have all probably experienced this, whether it’s that ceramic vase we made at a workshop last year that we won’t throw away or that bed we put together all by ourselves. There is a spectrum of ways CPG brands can borrow from the principle and put it to use.

Empower their do-it-yourself instincts

The epitome of the Ikea effect is its application in the DIY industry. DIY has exploded in our society today and extends well beyond home improvement and crafts. The reason DIY has gotten so big is that customers increasingly like being in control. CPG brands will see greater success if they empower consumers with the ability to create themselves. The popularity of Blue Apron, HelloFresh and other cook-it-yourself deconstructed meal delivery services further proves this theory of behavior. The Old El Paso taco dinner kit is an example of how a DIY make-your-own-taco experience can exist on the shelf.

On the other hand, Whole Foods gives customers a similar experience in-store by allowing them to make their own nut butters. How do you attract those customers with the DIY mentality? If you’re a second or third mover to a category like instant coffee, for example, try tailoring your marketing messaging from the typical “quick and easy on-the-go convenience” angle to a “make something delicious yourself, labor-of-love” angle. That tweaked messaging can jumpstart the value of that cup of coffee to the customer (and by extension the brand).

Implement customization, not just personalization

If DIY is not in the cards, consider giving your customers an opportunity to virtually create their own version of your product or service. Converse has an impressive “design your shoe” application on their website where a customer can build and design every aspect of their own shoe, right down to the color of the laces. It’s virtual labor, but the proof is in the customer engagement. Customization of lower-priced goods comes at a cost, but at scale, can be quite intriguing. Element Bars, an online company, allows you create custom energy bars, based on ingredients you like and health benefits that appeal to you. At retail, the beauty industry is capitalizing on this trend by allowing people to create their own perfumes or their own makeup colors.

Invite your customers to be a part of your brand strategy

If do-it-yourself or made-to-order are too tricky, there are other ways to engage and give consumers some power through social networks. Social sensing and crowd sourcing are powerful tools for brands today. People like Kim Kardashian ask their followers on Twitter and Instagram questions like, “What should I call my perfume?” By inviting customers in to dictate product development or marketing strategy, they begin to feel ownership of the brand and are that much more likely to purchase.

In CPG, Lay’s “Do Us a Flavor” campaign is a great gamification example of creating a contest to give customers product development control over the next best flavor in potato chips. Customers come up with a flavors and spend months rallying fans socially across the country to vote for their idea. At the same time, this provides the brand with social currency and content galore.

The 1950’s housewives showed marketers that there is a fine balance between convenience and control. It’s fascinating how in the current world of quicker, faster, easier, making customers work harder and longer can still benefit the brand. Now, that takes the cake.