Recent years have seen an explosion of efforts by companies to involve their customers more deeply in their operations, from product design and assembly (e.g., Converse and Mountain Dew) to creating and selecting advertisements (e.g., Doritos SuperBowl ads). But do such efforts pay off? How can the successor failureof such efforts be assessed? And what factors should companies considering these new forms of customer engagement have in mind as they explore these ideas?
Mike will discuss his research on what has come to be known as the IKEA Effect (a Harvard Business Review Breakthrough Idea in 2009)the increased value people have for products they assemble themselves from misshapen mugs from long-ago pottery classes to bookcases from the Swedish retailer. In particular, he shows that involving customers in co-creation requires a careful balance between two opposing forces. First, the task has to be difficult enough for customers to feel that the firm has really allowed them to accomplish somethingleading companies to increase the difficulty of tasks; second, however, tasks that are too complicated lead customers to blame the firm for wasting their time. Mike describes the results of many of his fun experiments in which he asks people to build things ranging from IKEA furniture to LEGO sets to origami, which reveal how to find the right balance between these forces.
Mikes research demonstrates that spending money on othersfrom giving money to a homeless person to buying coffee for a friendhas a larger impact on well-being than spending that money on stuffTVs, cars, and houses. He discusses the wide range of the experiments underlying this research, from sending undergraduates out on college campuses with stacks of cash to give away to interviewing poor people in Uganda about their spending habits.
Most importantly, Mike reviews his newest research examining the impact of prosocial incentives on both employees and customers. In experiments with employees ranging from bank tellers to pharmaceutical sales representatives, employees are given bonuses that they are encouraged to spend on othersdonating to charity, or buying gifts for their teammates. Such prosocial incentives have a substantial impact on employee satisfaction and performanceand in fact perform better than typical bonuses that employees are not required to spend on others. He reviews other efforts by companies to engage in such activities to increase engagement with their customersfrom the Pepsi Refresh Project to the Product (RED) campaign.
There's surprisingly little rigorous evidence demonstrating that companies really can make money by doing more good. To this end, my collaborators and I have ...
Behavioral scientist Michael I. Norton became interested in mourning rituals after reading Harvard University President Drew Gilpin Faust's This Republic of ...
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