Modern CX is Behavioral: How the Peak-End Rule Can Revolutionize Customer Experience

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Aug 28, 2022

The traditional CX approach and its challenges

In 2022, almost 90% of C-level executives reported that the needs of their customers and employees change faster than they can adapt to those needs.1 While those numbers sound shocking, it shouldn’t come as a surprise. Larger companies comprised of many departments tend to struggle with alignment and visibility — making a cohesive CX near impossible.2

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Considering behavioral science in CX

Our brains are no match for the excess of information brought to us in the digital age. Our limited processing capacity prevents us from synthesizing everything in our environment, so we rely on heuristics (or mental shortcuts) to make sense of the world. We assess value through concepts like relative comparison, or by time and effort to gratification.

This creates challenges for evaluating CX — emotions are tough to quantifiably measure. While touchpoint optimization can be beneficial in ensuring each segment works individually, it doesn’t necessarily mean the segments work well together. More importantly, touchpoint optimization doesn’t ensure positive customer perception.

McKinsey graph showing CX scores after implementing behavioral science initiatives

From McKinsey & Company: Implementing behavioral science initiatives improved customer experience scores more than operations initiatives.

A modern definition for CX can unlock new opportunities

A traditional understanding of CX is limited to the motions customers go through during the consumption process. 

A modern, behaviorally-informed understanding encompasses customers' memory of a company, and how these memories influence their future interactions. These memories come from emotional associations at key touchpoints, and comparisons with similar experiences.3

This latter definition highlights the importance of situational factors, promoting a more realistic understanding of CX.

Considering the peak-end rule approach in CX decisions

We primarily judge an experience based on two memories: how we felt at the end and the highlights. This is called the peak-end rule, and it explains why CX is dependent on the emotions associated with the experience, rather than objective customer ratings for individual parts of the experience.

Companies can leverage the peak-end rule using choice architecture — the practice of designing an environment to encourage certain outcomes. In order to make best use of the peak-end rule, negative emotions should be condensed at the beginning of the customer experience, good emotions spread throughout, and endings should feature a high note.

What the peak-end approach means for CX

  1. Condense negative emotions at the beginning

Condensing negative emotions at the beginning of the customer experience gets the necessary, not-always-pleasant actions out of the way as soon as possible. For example, hotels collect your payment information at check-in, so you aren’t reminded of the price-per-night that you’re dishing out for the rest of your stay. In a sequence of events that involve good and bad experiences, we tend to prefer unfavorable events come first and desirable events come at the end. 

Suggestion: Condense all payment and administrative requirements into the first touchpoint

  1. Spread positive emotions throughout

Spreading positive emotions throughout will help customers leave with positive associations of the overall experience. For example, amusement parks don’t condense all the rides and rollercoasters into a single touchpoint — they spread out the enjoyable experiences by having customers line up to go on rides, and placing food stands, performers, and games all over the park.

Suggestions:

  • When possible, check-in regularly with customers to ensure their experience is satisfactory and make real-time changes when needed
  • Offer pleasant surprises throughout the experience, like freebies or rewards

  1. End on a high note

Ending on a high note leaves a positive final impression on the customer. Saving the best for last leverages the serial position effect — we’re wired to remember the last touchpoints first. Think of the free continental breakfast you get on the way out of the hotel in the morning.4–6

Suggestions:

  • Offer a pleasant surprise at the end, such as a food stand, discounts on following purchases, rewards for joining loyalty programs or free/discounted auxiliary accessories or services
  • Make the experience enjoyable even after the last touchpoint, such as making the unpackaging experience pleasant through aesthetically pleasing colors and design
  • Offer souvenirs or customizations to newly-bought products near the last touchpoint

Focus on autonomous design

Self-determination theory (SDT) suggests there are 3 components to achieving psychological satisfaction:

  • Autonomy: Feeling in control of our decisions. 
  • Competence: Feeling like we do things well, and can improve our abilities.
  • Relatedness: Feeling meaningfully connected to others.

Companies can satisfy our need for autonomy and competence by giving customers control over their experience. We’re happier and more comfortable when we believe we have control over a process, especially an uncomfortable one.7

Letting customers choose details like appointment time, which cashier line to checkout at, or where to eat on a cruise gives customers autonomy over part of their experience.4,5

Suggestions:

  • Let customers choose details that will affect their experience, such as:
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  • Offer to customize products or personalize services when possible

What the behavioral approach has to offer for CX

Leveraging behavioral science strategies to improve the customer journey through autonomous design and the peak-end approach is important to consider, because it will set companies apart from others and create a positive customer experience to keep people wondering what makes your brand stand out so much.

References

1. Janczura, T. (2022, April 26). Accenture Announces Accenture Song. Accenture. https://newsroom.accenture.com/news/accenture-announces-accenture-interactives-evolution.htm

2. Morgan, E. (2014, September 4). Why Companies Can’t Get Aligned and How You Can. Inc.Com. https://www.inc.com/eric-morgan/why-companies-can-t-get-aligned-and-how-you-can.html

3. Bordenave, R. (2020, April 21). Behavioral Sciences & Nudge: New frontiers for customer experience? BVA Nudge Consulting. https://www.bvanudgeconsulting.com/behavioral-sciences-nudge-new-frontiers-for-customer-experience/

4. Bhattacharjee, D., Gilson, K., & Yeon, H. (2016, March 11). Putting behavioral psychology to work to improve the customer experience | McKinsey. McKinsey & Company. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/putting-behavioral-psychology-to-work-to-improve-the-customer-experience

5. Devine, J., & Gilson, K. (2010, February 1). Using behavioral science to improve the customer experience | McKinsey. McKinsey & Company. https://www.mckinsey.com/capabilities/operations/our-insights/using-behavioral-science-to-improve-the-customer-experience

6. Moleskis, M. (2020, April 27). 7 Behavioral Tips for Designing the Ideal Customer Experience. The Decision Lab. https://thedecisionlab.com/insights/consumer-insights/7-behavioral-tips-for-designing-the-ideal-customer-experience

7. Chase, R. B., & Dasu, S. (2001, June 1). Want to Perfect Your Company’s Service? Use Behavioral Science. Harvard Business Review. https://hbr.org/2001/06/want-to-perfect-your-companys-service-use-behavioral-science

About the Authors

Sekoul Krastev's portrait

Sekoul Krastev

Sekoul is a Co-Founder and Managing Director at The Decision Lab. A decision scientist with an MSc in Decision Neuroscience from McGill University, Sekoul’s work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.

Sarah Chudleigh

Sarah Chudleigh

Sarah Chudleigh is passionate about the accessible distribution of academic research. She has had the opportunity to practice this as an organizer of TEDx conferences, editor-in-chief of her undergraduate academic journal, and lead editor at the LSE Social Policy Blog. Sarah gained a deep appreciation for interdisciplinary research during her liberal arts degree at Quest University Canada, where she specialized in political decision-making. Her current graduate research at the London School of Economics and Political Science examines the impact of national values on motivations to privately sponsor refugees, a continuation of her interest in political analysis, identity, and migration policy. On weekends, you can find Sarah gardening at her local urban farm.

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