The IKEA Effect is when people value something more when they help create it. At its best, pricing is about figuring out how much someone would pay (or values) something and then charging as close to that as possible.
The obvious link here is if we can get someone to help build their own solution, they value it more so we should be able to charge more. But let’s look at a more non-obvious link.
When a salesperson has value conversations with buyers, he or she is essentially holding the hand of the buyers, helping them calculate on their own how much they value the product. They start with articulating or discovering the problem they are trying to solve. They move on to the results that buyer might expect if they solve those problems. Finally, they use business acumen to calculate the additional profit (value) they might expect from these results. The salesperson holds the buyers’ hands through the entire process.
Contrast this to a salesperson telling a buyer what problem we solve, what results they might expect, and some typical profit increases. First, the buyer doesn’t believe the numbers. Second, the buyer didn’t help create them.
Back to the IKEA Effect. When the buyer goes through the work to determine how much value (additional profit) can come from buying a product, they are much more invested in that solution. Which means they are much more likely to purchase.
If you’re not already having effective value conversations, start now. It will help you win more deals at higher prices.
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