Using Behavioural Science: The Peak-End Rule

What is The Peak-End Rule?‍

The peak-end rule is a psychological heuristic in which an experience is evaluated and remembered based on the peak (most intense) point of the experience and/or the ending of the experience.

This psychological heuristic explains why we can be irrational in our recollection and memory of events. Peak-end theory was created by the Nobel Prize-winning psychologist Daniel Kahneman.

Here’s an experiment to demonstrate it

The research of Kahneman and various colleagues provided a key body of evidence for the peak-end rule. For example, in one experiment, participants were subjected to two different trials of an unpleasant experience;

1. The subjects put a hand in 14°C water for 60 seconds.
2. Participants put the other hand in 14°C water for 60 seconds, but kept their hand underwater for an extra 30 seconds, during which time the temperature was raised slightly to 15°C.

Participants were asked to choose a trial to repeat. Curiously, participants were more willing to re-take the second trial, even though they were exposed to uncomfortably cold temperatures for longer. The researchers concluded that participants chose this second, longer trial because they preferred the memory of it/disliked it less, supporting the theory that people judge experience on how the event ends, in this case, warming their hand up a little.

What does this mean in the context of retail and hospitality?

Events, experiences, the buying process; all are remembered for their most stand out and final moments, be they positive or negative. A rude and inattentive salesperson can ruin an afternoon-long retail therapy session, yet a restaurant bringing out a cake with candles and singing happy birthday can make up for forgettable food.

Here’s a great example:

The Magic Castle hotel, from Chip and Dan Heath’s book The Power of Moments. The Magic Castle is ranked as the second-best hotel in Los Angeles by Trip Advisor, with a higher proportion of ‘very good’ or ‘excellent’ reviews than the famous Four Seasons in Beverley Hills. Its success is surprising as it is a basic 3-star hotel yet it’s price is on a level with more premium hotels.

What’s the Magic Castle’s secret?

It masterfully applies the peak-end rule. It doesn’t create a uniform experience. Instead, it focuses on one or two outstanding moments, for example a popsicle helpline.

Any time, day or night, you can pick up the old-fashioned red phone by the swimming pool and dial the helpline. A staff member, complete with white gloves, promptly appears carrying a silver platter with a selection of free ice-lollies.

It’s this focus on creating a stand-out peak moment that is responsible for the hotel’s phenomenal popularity.

How can you harness the power of this heuristic?

To be truly different and memorable, a business should concentrate on improving peak aspects of the customer experience.

For example, integrating a reward app with music could allow you to play a special personalised song every time a customer redeems their tenth coffee free from the loyalty scheme, or if you attend a restaurant where the service is under strain and slow due to it being very busy, yet during the evening some of your favourite songs are played, your memory of the experience overall will be more positive. Or what about a take-home playlist for each customer based on the songs they liked best during their stay?

Creating a series of planned peaks and a stellar end to a customers interaction with you could dramatically improve their impression of your brand, make them more likely to forgive mistakes or minor faux pas and increase the likelihood of repeat custom. And excitingly, it doesn't have to be expensive or hard to achieve.

Talk to us about how you might integrate the Peak-End Rule in your customer experience.

References:

Daniel Kahneman, Barbara L. Fredrickson, Charles A. Schreiber, Donald A. Redelmeier. When More Pain Is Preferred to Less: Adding a Better End. Psychological Science Journal, 1993. Vol. 4 Issue 6.

Chip Heath & Dan Heath. The Power of Moments: Why Certain Experiences Have Extraordinary Impact. Bantam Press, 2017.