Good businesses fail, good restaurants close, good products die, and good companies can’t retain talent. With nearly limitless options for both customers and employees coupled with radically transparent internet reviews, companies are challenged more and more with creating great experiences for all of their constituents.
That said, “Good”, “Great”, “Incredible”, etc. are all relative and subjective feelings. It is
therefore equally important for us to understand how employees and customers, as impressionable human beings, perceive experiences so that we can devote company resources to the most impactful components of an experience.
Science shows that it is the peak and the end of an experience that have the greatest
influence on how people remember it. In fact, it is the end relative to the previous components of the experience that is the primary determinant. This psychological bias is aptly called the Peak End Bias.
In 2002, three psychologists decided to test the strength of this bias. Daniel Kahneman,
Joel Katz and Donald Redelmeier created the colonoscopy study (I don’t know how they managed to get volunteers for this one). From what they knew about colonoscopies, the moving of the scope from side to side is what causes the most discomfort. And so, they tested this bias as follows: the control group had a normal length (10 minute) colonoscopy with quite substantial side to side movement throughout. The variable group had the same full-length colonoscopy (10 minutes) plus an additional few minutes with no movement of the scope.
The findings were quite powerful; the variable group reported an overall better experience,
despite their colonoscopy being longer and objectively more uncomfortable (it had the same level of discomfort as the control group + additional time of moderate discomfort). However, the variable group reported an overall better experience because the end of the colonoscopy was relatively less painful than beginning.
I’d assume that few of us reading this piece are administering colonoscopies and hopefully
not receiving them too often, so what could this mean for the business world? Below, I will present two possible applications that all companies should strongly consider.
Application 1: Service Design
Established by the Köln International School of Design in the 1990s, service design is the
complex framework for understanding and improving the user experience of a service.
Utilizing tools such as customer journey maps, personas and blueprints helps innovators
understand the current relationship they have with their customers and if and how they could improve it. It is essential for service designers to understand the Peak-End rule so that they could leave their customers with remembering a great experience.
The Amazon 1-click ordering button is the perfect example of incorporating the Peak End Bias. While customers may spend a few minutes finding whatever it is that they want to order, comparing pricing and reviews, when they are ready to checkout, the process is seamless; literally done with the click of a button. The fact that the checkout process is actually much simpler than the searching process is perhaps one of the reasons we enjoy the experience of using Amazon.
Application 2: Employee Experience
The company rating website, Glassdoor, has fundamentally changed the employer-employee
experience. For those of you who are not familiar with the website, Glassdoor allows employees to rate their employer, current or previous, and provide detailed insight in to the employee experience. Think of it as the Yelp for employers.
While this level of transparency is helpful to job-seekers and a wonderful accountability tool, some employers feel that this is unreasonably harsh. For one, we all know that people are more likely to publicly share thoughts on the internet for bad experiences rather than for good ones. Secondly, many individuals post reviews of companies after they left and as we know from psychology, our remembered experience is often different than our actual experience.
With this in mind, I’d encourage employers to think harder about perfecting the off-boarding process. If the ending has a disproportionate effect on reported experience, they ought to put just as much, if not more thought and care in to how to part ways as they do when they on-board or seek to retain talent.
Just as David killed Goliath in the famous biblical parable, success often has to do
with where and how you focus not just how much energy you expend, or how big you are. While we don’t all need be to psychologists to create great experiences, understanding biases like the Peak End Bias gives us a bit of insight in to where we should be focusing when designing products and building sustainable organizations. As Ogilvy & Mather chairman, Rory Sutherland’s, TEDx talk suggests “The next revolution will be psychological, not technological”.