Peak-end rule (rule of peak and expiration)

Introduction

How people remember an experience with a company influences repeat purchases and how they tell friends and acquaintances about it. That's why it's important for business owners to understand that some of these memories can be controlled and optimized. This applies to both positive and negative experiences. After all, people mainly remember the peak moment and the end of an experience. In this article, we explain what the peak-end rule is, give examples on how it is applied in practice and provide tips on how every entrepreneur can apply it in his/her own business.

What is the peak-end rule?

The Peak-End Rule is a psychological phenomenon that describes how people form their memories of experiences based on two key moments: the peak (peak) and the end (end) of the experience. (Kahneman & Frederickson, 1993).

The peak can be either positive or negative. It is about the most intense moment within the entire experience. The other important element is the end. An experience lasts for a certain period of time. It can be short or long, but there is always an end. The brain combines that peak with the end of the experience and calculates an average, so to speak. That average then forms the starting point for remembering an experience.

How was this investigated?

Researchers used only one container of cold water for this experiment. Or actually two containers. Subjects were divided into two groups:

• The first group was asked to hold their hands in a container of cold water (14°C) for 60 seconds. They were then asked how unpleasant they found the experience.
• The second group was asked to hold their hands in a container of cold water (14°C) for 60 seconds. Then they were asked to hold their hands in a container of slightly less cold water (15°C, which is still very cold) for another 30 seconds. They were then asked how unpleasant they found that experience.

Objectively, the first group came out best. After all, they were done after 60 seconds. The second group did the same 60 seconds, plus another 30 seconds in almost as cold (and painful) water. Interestingly, the first group found the experience more unpleasant than the second. That's because of the end of the second group's experience.

Both groups experienced the same negative peak, namely their hands in cold water of 14°C. The second group had a different ending, with slightly less cold water of 15°C. They rated the end as less negative, so the average also picked up less negative. How long the overall experience lasted (50% longer for the second group) did not matter for memory.

Peak-end rule examples from practice

• The long walk through the showroom, the search in the warehouse and the lines at the checkout counters at Ikea don't make you happy. But finding the perfect chair at a low price (the peak) and that hot dog or ice cream for a bargain at the end still make for a positive experience.
• When you have car trouble, you want nothing more than to get home. The negative experience of feeling unsafe on the side of the road and of having your busy schedule delayed can feel less negative when the conversation with ANWB's customer service team reassures you completely (peak) and the mechanic gets you back on the road quickly and professionally (end).
• A day at a busy amusement park, on a scorching hot day with long queues and whining children, can be remembered as very positive by an unexpected meet & greet with the mascot (peak) and a photo of this encounter at the exit (end).
• The heated argument with a colleague or the scolding from your boss at the end of your workday could cause you to label this entire day as negative.
• With a Tag, it feels a lot less bad to have to pay money because you're already curious to see what GIF you'll get to see!

Using peak-end rule to your advantage

You can apply the peak-end rule as a business owner by taking into account the peak moment and the end of an experience of your customer, employee or supplier. We think the length of the experience is less important, as long as the peak and the end are good.

Want to optimize a positive experience or make a negative experience as pleasant as possible? Then focus on the peak and the end as customers or others experience it. If the two produce a good average, it doesn't matter that the overall negative experience was longer, for example, or that a positive experience was shorter. Some ways to apply the peak-end rule:

• Keep in mind that every collaboration ends. Sooner or later it will come to an end. Prepare the end well in advance. Provide a positive ending, because this is what customers, suppliers and partners remember from you. Was it a "bumpy ride? End with a nice lunch where you re-evaluate everything together, take responsibility and show compassion.
• Do you know from past experience that awkward or awkward moments can arise during collaboration? Make sure they don't happen at the end of the collaboration. If necessary, extend the collaboration so you can still end on a positive note.
• Saving the tastiest until last, that is, combining the peak and the end, creates positive memories. In a restaurant, for example, make sure the dessert exceeds all expectations.
• Prepare clients that setbacks may follow during the journey, making the lows feel less intense and unexpected (Doll, 2020).
• Do you know in advance where the lows will approximately take place? Then plan the peaks strategically. With a webshop, a possible late delivery is a risk. Then make sure the unwrapping is a party or add a present!
• Optimize your thank you page. A nice video or a handwritten thank you card with the order always do well.
• After ordering, offer the customer a nice discount for the next order. An unexpected bonus!
• Avoid surprising someone with mustard after the meal. That leads to a negative memory because you have to communicate something negative at the end. So do you want to make specific terms known or deliver other bad news? Then preferably do that at the beginning of the experience.
• Turn your 404 page into something fun. Should your customer unexpectedly end up on a 404 page, make sure you end this endpoint positively (Kane, 2018).
• Make sure the customer journey has memorable moments. A continuously good experience does not stick around as much as a good experience with one moment that stands out. That sets you apart as a company, brand, service or product!

Resources

Doll, K. (2020, April 02). What is peak-end Theory? A Psychologist Explains How Our Memory Fools Us. Retrieved July 20, 2020, from https://positivepsychology.com/what-is-peak-end-theory/

Kahneman, Daniel; Fredrickson, Barbara L.; Schreiber, Charles A.; Redelmeier, Donald A. (1993). "When More Pain Is Preferred to Less: Adding a Better End," Psychological Science. (pp. 401-405)

Kane, L. (2018, December 30). The Peak-End Rule: How Impressions Become Memories. Retrieved July 20, 2020, fromhttps://www.nngroup.com/articles/peak-end-rule/