The Behavioral Strategy that will Boost any Service Business
The Psychology Behind Wowing Your Customers At The End
What does a free toothbrush, the fastest sprinter in a relay race, and the sweetest dish on the menu all have in common? They all happen at the end of an experience.
This article is about the bulletproof rule anyone can use to boost their service business and even quality of life. Not only will this rule improve your customer retention and profit — nearly anyone can use it to enhance their relationships, creative hobbies, or seemingly banal day-to-day activities. This strategy is so effective, that it spread like absolute wildfire in almost every single industry — from sports to entertainment to dentistry. In order to explain what that rule is, I ask you to take part in this next thought experiment:
Imagine planning a birthday celebration with your close friends. It’s been a while since you’ve seen each other, so you decide to treat a small group to a nice night out at a local restaurant. The food is great, laughs are shared, you have some drinks, and the time comes to pay. Gladly (because it’s your offer), you hand the server your credit card and off he goes. After a few minutes, you see him calling you over from the register, and he then tells you your card has been denied. Bewilderingly, you offer another form of payment. Denied again. Feeling very shameful, you then walk back to the table and tell your friends that one of them will have to pay. They look at you oddly and someone eventually handles the bill. You feel stressed, shamed, and anxious about your finances thinking the whole night was ruined.
Now the question: Would you consider that a good or bad experience?
This thought experiment illuminates that bad endings can have a huge impact on how experiences are later perceived. How many times have you heard someone complain that the ending of a movie ‘completely ruined it’. In retrospect, the unfortunate credit card denial never affected the actual experience of dining and drinking with your friends, because it didn’t. Most of the celebration was already done with when the transaction bounced. Moreover, what has been impacted, is the memory of that particular experience, which humans internalize forever.
The theory that bad endings can ruin an experience has been corroborated by science, which this article will unpack. More specifically we’ll be discussing the phenomenon known to psychologists as ‘peak-end rule’, and how both people and businesses can harness it to create highly impressionable and memorable products and services. This advice is absolute gold for any entrepreneur, strategist, or designer because when you can create a memorable experience, you can start to control your businesses referrals and sales. I’ll also give real-life applications of how service industries can (and have) implemented strategies that cater to this psychological phenomenon.
In the mid-1990s, there were a series of studies done by Daniel Kahneman and Donald Redeleimer where they wanted to test if there was a difference between experienced pain or pleasure, and the memory of that experience based on certain factors such as intensity and duration. In their experiment, they took people who were undergoing colonoscopies and measured the amount of pain they were feeling throughout the procedure. In one group, the patients went through a standard length operation, and in the next group, they intentionally left the tip of the colonoscope in the rectum for an extended time (classy…I know), increasing the duration of the experiment (study). Here is a graph of the findings:
Now if you look at the above graph, logically one would assume that patient Bhad a worse experience. The duration of his procedure was almost double that of patient A, and the intensity not significantly different. Surprisingly this wasn’t the case. Patient A reported an experience that was twice as bad as patient B. But why? What they found (as many other studies did) was that the peak pain (the most intense moment) was higher for patient A, while also occurring at the end of the procedure/experiment. This for some reason made the patients’ negative memory more palpable, even though the experience wasn’t actually worse. Moreover, the overall magnitude of pain that patient B experienced was much higher but was somehow forgotten when asked about afterwards. This and further experiments proved memories are highly dependent on the most intense moments, and what happens at the end — not necessarily the duration. Duration neglect is another term used to describe this bias.
The peak-end rule phenomenon is an absolute game-changer in life and business. Entrepreneurs and UX Designers are constantly trying to think about how to make an experience better when they really ought to think about how to make the memory of that experience better. Let me expound.
The true human experience is fleeting. When we’re completely present or in the moment, we’re not thinking about it, thus it is our memories of an experience which truly dictates our decision-making. It isn’t until the experience is over where all the political magic happens — the magic known as communication (referrals), which ultimately leads to more sales. Referrals are the lifeblood of any successful business because it requires nominal investment in advertising and marketing for the idea to spread. People tell their friends and family the things they like and use, just for the sake of sharing. The lack of ulterior motive in a personal referral means that trust is immediately established with the product/service/company in question.
Moreover, referrals rarely ever happen during an experience — it is the remembering human that talks about it afterwards. For example, if you have a great meal at a restaurant, you will be talking about it (referring it) for potentially the rest of your life. Thus, memory propagates both customer acquisition and retention. By harnessing peak-end rule, companies can create better memories that lead to zero-investment viral growth. Referrals (based on memories) are what leads to critical mass product/service adoption.
Mitigating The Dentist Experience
There has been no more palpable example of the peak-end rule applied to business than the typical experience at the dentist office, which is notoriously dreadful. Who enjoys sitting in a fluorescently-lit room with someone’s hand in their mouth, whilst teeth are scraped with metal objects and gums stabbed with needles? It’s horrible. It’s quite obvious that dentists would want to lessen this unpleasantness, so their patients’ visits don’t seem as bad as they actually are. At some undocumented time in history, dentists collectively discovered two big strategies to mitigate their patients’ unpleasant memories — ultimately helping their business thrive.
Dentists ultimately solved this problem by unknowingly catering to peak-end rule. They did this by improving the quality of the patients first and last moments at the office. More explicitly, they used entertainment at the beginning and free products at the end to do that. Have you ever noticed how so many dentists and orthodontists have video games that children can play before their appointment? Have you also noticed that dentists frequently give their patients free toothbrushes at the end of their visit? This is exactly the peak-end rule applied. Kids are happy they get to play the games, and everyone’s grateful for the free toothbrush at the end. So, due to the positive beginning and end, the middle part of the experience seems less bad. The video game and free toothbrush strategy then conditions people to come back to the same dentist over and over again. This is especially important for children because conditioning them early will improve retention over time. That’s why McDonald’s sells ‘happy meals’ with free toys — they want those happy children to grow up into loyal customers. It’s quite brilliant actually. Moreover, in business and in life, always wow your customers, audience, and acquaintances at the end of an experience. Doing this will positively influence one’s memory which will help to retain and acquire more customers through referrals.
Other Applications of Peak-End Rule
Always start and end your day doing something you enjoy. Smile when you see someone the first and last time you meet them. Make the first and last slide of your presentation especially attractive and powerful. Spend more time designing the first page of your website, and your call to action at the end. Try to end every single meeting on a positive note — make sure everyone’s contempt is resolved. Spend more time writing and editing the first and last paragraph in your article, or the first and last scenes of your film. If you own a restaurant, make sure your bread and your dessert are outstanding because it’s the first and last thing your customers will taste. This advice will undoubtedly help you create lasting, positive impressions that ultimately boost your business due to customer referrals.
Now here’s your happy ending…
I’m Jeff Davidson
I help companies develop remarkable experiences that wow their customers. For free UX and business strategy lessons, visit my site.