The IKEA Effect and How an Online Configurator can Drive More Sales
The buyer’s journey. Every enterprise salesperson business knows that the typical B2C buyer’s journey just doesn’t apply to the B2B world. The tired example of buying groceries or choosing a restaurant just doesn’t happen when clients are making decisions on behalf of their company and hundreds of thousands (or even millions) of dollars are on the table. The B2B buying journey is complicated, unpredictable and always changing.
In recent years, software has helped B2B teams with efficiency and predictability. Software platforms like CRMs and ERPs have helped in making commerce less complicated, more predictable and stable.
However, when we consider the manufacturing buyer’s journey, there remain gaps that CRMs and ERPs just can’t fill. While these do a great job and communicating with the customer, and ensuring that the orders are fulfilled, the configuration of the products and interpreting the customer’s needs is still mainly done with faulty excel sheets and old, outdated software.
Take the example of elevator companies. These manufacturers are typically big international players that sell mainly via local resellers. These resellers need tools, reliable information, and confidence to sell the equipment (over competitors). Resellers need to respond to their customers’ demands and ensure that the products are delivered on time and on budget. As you can see, the buying journey is not as straight-forward as one may think. There are many interdependencies and valuable stakeholders to consider.
So how can B2B companies simplify the buyer’s journey? What if there was a way for manufacturers to deliver a higher value with simply improving the buying experience?
The IKEA Effect and Online Configurators
One powerful and underutilized trick that B2B companies can learn from B2C world is to use the “IKEA-effect”. The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created.
In other words, by allowing the customer to be partially involved in the creation of a product, they are more likely to place it with a higher value. Ikea is not the only one who benefits from this. Think of how much more you appreciate a home-cooked meal or a child enjoys playing with Lego.
I know what you are thinking, “How can a customer possibly understand all the complexities, rules and constraints of our products!”. Until recently it was simply not possible for someone with no technical background to take on such a challenge and come up with a viable product.
But what if there was a way of simplifying the configuration process? What if it was possible to make it so easy to use and transparent that it would enable customers to have a more active role in creating/configuring their products?
Luckily, there is a tool that can do just that. Below is an example of Parker Lifts, a fictitious company that we’ve created to demonstrate just how an online configurator works.
Online configurators usually have 3 main goals:
1) To inform the customer of the various products, including options
2) To allow the buyer to create and design their own products, and therefore lay the groundwork for the Ikea-effect to take hold.
3) To collect valuable insights on prospects, in order to better understand the sort of options that they were exploring and the configurations they are most interested in.
As we have just seen, even a complex, high-variant industrial product like an elevator, can benefit using an online configurator to achieve it. Resellers, who deal directly with buyers (and sometimes the end-users) will certainly benefit from having a selling tool that puts the customer at the center for the buying journey. The configurator will also ensure that the options selected, and features are viable, as technical constraints and incompatibilities are counted for.