Everyone Loves a Happy Ending: Understanding the Peak-End Rule

I’m not talking about the type of happy endings that happen in fairy tales. I’m talking about the hundreds of fleeting final moments we have with people, products and experiences every day. Things like:

• That smile from the cute girl (or guy) at your office at the end of a day of “soul-crushing” meetings.
• That great final golf shot after a round of sand traps and water hazards.
• That friendly flight attendant who gives you a complimentary drink after a long delay on the tarmac.
• That custom “Thank You” page after finishing a lengthy purchase process.

While we generally like to think of ourselves as being objective judges of the totality of our experiences, in reality we’re actually unconsciously biased by how we feel at the peak and at the end of those experiences.

When it comes to designing experiences around a brand, product or organization (whether online or off-line), understanding the implications of this counterintuitive phenomena can help you improve customer sentiment, sales and user retention.

What Is the Peak-End Rule?

First proposed by Nobel Prize–winning psychologist Daniel Kahneman, the peak-end rule is a psychological heuristic that people use to judge their experiences—both good and bad.

The peak-end rule is a psychological heuristic that people use to judge their experiences—both good and bad.

The rule was first demonstrated in a controlled experiment in which Kahneman and his colleagues found that participants preferred 60 seconds of cold ice water followed by 30 seconds of slightly warmer ice water rather than just the 60 seconds of cold ice water alone.

While it doesn’t make sense that people would choose more discomfort over less discomfort, the researchers found that the trajectory of the discomfort (in this case from more to less) was enough to alter the participant’s perception of the overall experience.

So how can businesses and marketers use their knowledge of the peak-end rule to create more positive user experiences? Here are five ways:

1. Turn Negative Peaks into Positive Peaks

One way that you can use the peak-end rule to improve your user experience is by identifying potential negative peaks and working to turn them into positive peaks (or at least neutral events).

For instance, AT&T found that customers often felt anxious when first walking into a store if they didn’t know how long they would have to wait to be helped. By implementing a policy in which every customer is greeted by an associate within 10 seconds of walking through the door, AT&T was able to significantly alter their customers’ perceptions of the overall experience of shopping in their store, effectively turning a negative peak into a positive one. The effect of the simple greeting was so powerful that customers who were greeted reported that their wait time was shorter than it actually was.

2. Manage Expectations to Ensure Long-Term Growth

When it comes to dynamic pricing models that use sales and discounts to generate business, consumers usually base their purchase decisions on the sale price in relationship to a general reference.

While discounts may help generate sales and revenue in the short term, they can lead to decreased revenue in the long term.

Researchers found that consumers determine this general reference price based on the lowest (peak) and most recent (end) price that they paid for the item. Because of this, they found that while large discounts may help generate sales and revenue in the short term, they can also serve to lower the consumer’s reference point, leading to decreased revenue in the long term.

This is a problem that often plagues companies that use a freemium model. Once you’ve gotten customers accustomed to getting a service for free, getting them to start paying for it (even if you offer extra features) can be difficult.

3. Save the Best for Last

A surprising study validated the peak-end rule by looking at the effects of giving different types of candy to kids on Halloween. While logic (and childhood memories) dictates that More Candy > Less Candy, the reality is quite different.

After giving two children a full-size candy bar (score!), one of the children was given an additional piece of bubble gum while the other wasn’t. It turns out that in most cases the kids who received the extra piece of bubble gum rated their experience lower than those who just got the candy bar. Since the children who got less overall candy ended their experience on a high note (full-size candy bar) rather than a slightly less high note (bubble gum), they ended up feeling better about the experience as a whole.

That’s why, when it comes to rewarding your customers or providing incentives for performing certain actions, it’s usually a good idea to start small and save the best for last.

4. Design for the Moments of Truth

The moment of truth, whether it’s during an interaction with a physical product or a web application, is when your user gets to the core functionality/utility of your product.

Focus your efforts on identifying your “moment of truth” and hitting it out of the ballpark.

It’s that feature that differentiates you from your competitors, that simplifies a previously complicated process or that delights your user more than anything else. Those are the moments that you should spend the most time working on to make them bigger, better and more memorable.

Since users will remember only a few key things from their experience with your product or service, adding additional features and functionality won’t actually improve their overall experience. Instead of succumbing to user-experience rot, focus your efforts on identifying your “moment of truth” and hitting it out of the ballpark.

5. The Element of Surprise

One surefire way to create a positive peak is to surprise your audience with something of value that they didn’t expect. Virgin Airlines used this tactic when they decided to give out complimentary popsicles to economy passengers during flights from Europe to the United States and the Caribbean during the summer of 2011.

Although the cost of providing free popsicles was relatively minimal, the unexpected nature of getting a free cold treat at 20,000 feet helped positively influence their passengers’ opinions of the entire flight experience—not just the time they were eating the ice cream. That seems like a pretty cost-effective way to create positive brand sentiment and customer loyalty.

Lasting Impressions

When it comes to creating memorable experiences that delight your audience and leave a positive impression of your brand or product, it’s important to understand the complex psychological factors that influence how those impressions are formed and what we can do to affect them. And while these insights into human nature can be valuable, it’s up to organizations to look closely at how their users actually interact with their product or service in order to find ways to take advantage of this knowledge.