How to Improve Customer Experience at Low Cost

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How can small, surprising, and often free superficial changes to products create huge perceived value for customers? Steven Bartlett, a renowned British podcast blogger, entrepreneur, and investor, proposes a principle in his new book The Laws of Life: 33 Guides for Business and Life: First achieve a "psychological moon shot." A psychological moon shot is a strategy of leveraging small efforts to achieve big impacts, significantly improving people’s perceptions of something through relatively minimal investments. In Steven Bartlett’s view, investing in perception is almost always cheaper, simpler, and more effective than investing in tangible functions.

1. Uber’s Psychological Moon Shot

“What if we could hail a taxi via phone?” This was the question Travis Kalanick and Garrett Camp posed to each other on a cold night in Paris. They had traveled from the U.S. to attend a tech conference but spent a long time unable to get a taxi, experiencing a frustration familiar to many: not knowing if or when a taxi would arrive. It was terrible. The simple question they raised amid uncertainty and frustration that night led to the birth of Uber.

Today, Uber has become the default ride-hailing app for over 100 million people monthly across 600 cities in 65 countries. In highly stressful situations(such as when we’re late for a flight, meeting, or event)every second feels like a minute, every minute like an hour, and every hour like a day. This anxiety from uncertainty is something we’ve all experienced, representing the terrible anxiety customers feel due to unpredictability. Reducing customer psychological friction became Uber’s core challenge, prompting the company to form an internal team of behavioral (data) scientists, psychologists, and neuroscientists the later "Uber Labs."

2. Key Psychological Principles

Uber Labs identified several key psychological principles that influence customers’ satisfaction with Uber and their perception of the overall experience: the Peak-End Rule, the Aversion to Idle Time, Operational Transparency, Uncertainty Anxiety, and the Goal Gradient Effect. Only after understanding these five powerful psychological forces did Uber completely redesign the entire industry.

The Peak-End Rule: The Two Most Important Moments

The Peak-End Rule is a cognitive bias describing how people remember an experience or event. In short, we judge an experience based on how we felt at its peak (best or worst) and at its end, rather than on the average of the entire process. Importantly, this applies to both positive and negative experiences. Here, companies and brands need to note: customers judge their overall experience based on two moments—the best (or worst) point and the end. This explains why Uber drivers learn to be especially friendly at the end of a trip, just before you rate them and leave a tip.

Aversion to Idle Time

Busy people are happier than idle people, even if their busyness is not voluntary. In fact, even a false reason (an inauthentic cause) can motivate people to take action, this is our desire to avoid aimlessness and stay active. Many of the "goals" we pursue are actually just excuses to keep ourselves busy. For Uber, this means that if it can provide waiting customers with something to watch or engage with-keeping them occupied-those customers will be more content and less likely to cancel orders. Most people would choose a longer wait time if they can do something during the wait, rather than a shorter wait with nothing to do. This partly explains why restaurants offer free appetizers or snacks while you wait, why platforms like Netflix and YouTube play preview clips when you hover over a video, and why Google Chrome offers a dinosaur game when you lose internet connection. Studies show that keeping customers occupied can increase satisfaction, retention rates, and conversion rates by over 25%.

Operational Transparency: Brands Should Be Transparent

Lack of transparency is toxic to the customer experience, breeding distrust and causing customers to view the brand with skepticism, resentment, and a sense of betrayal. In response, Uber Labs used the psychological principle of "operational transparency" to demystify every step behind the screen, showing progress during the waiting process. They provide estimated arrival times and detailed breakdowns of fare calculations. They explain all estimates rationally, provide quick updates when changes occur, and offer explanations for those changes. These measures reduced cancellation rates after a ride request was sent by 11%, a $6 billion improvement for Uber.

Uncertainty Anxiety

In 2008, Domino's Pizza faced an interesting operational and customer experience challenge. When pizza delivery times exceeded expectations, customers would call Domino's to inquire about their order's status. This disrupted the entire pizza-making process, as staff making pizzas would be interrupted by phone inquiries about delays, and customers would ultimately receive vague answers. Due to the lack of transparency, calling customers inadvertently delayed their own pizza delivery by causing distractions.

To solve this problem, some pizza chains purchased insulated bags to keep pizzas warm, hired more staff and drivers, offered refunds for late deliveries, and gave free breadsticks to customers with delayed orders—but the phones kept ringing. These chains overlooked the core issue of emotional frustration: people didn’t want faster delivery; they simply wanted reduced uncertainty about arrival times. Domino's understood this.

In 2008, Domino's used its existing internal order management software to create the famous "Domino's Pizza Tracker," which clearly showed customers where their orders were in the process. This small psychological insight and its resulting innovation transformed Domino's business. Angry phone calls plummeted, while customer satisfaction, retention, and advocacy soared. In the process, Domino's also saved costs and earned hundreds of millions of dollars.

A study published in Nature magazine shows that the psychological stress of knowing something bad will happen is less than the stress caused by uncertainty. This is because, in the face of uncertainty, the regions of our brain that try to predict outcomes are most activated; in other words, they are under strain. As Rory Sutherland explains in his book Alchemy, seeing "delayed" on your scheduled flight itinerary stresses your brain more than seeing "delayed by 50 minutes." Investing in perception is almost always cheaper, simpler, and more effective than investing in tangible operations.

The Goal Gradient Effect: Accelerating Near the Finish Line

In 1932, behavioral scientist Clark Hull studied mice in mazes. Using sensors attached to the mice, he monitored their speed as they ran toward food rewards. Hull found that the closer a mouse got to the maze's end, the location of the reward, the faster it moved. He named this principle the "Goal Gradient Effect." Time and again, it has been proven that what motivates us most is our proximity to achieving a goal: the closer we get to success, the harder we work.

In café loyalty programs, participants collecting stamps become more frequent coffee buyers as they near the goal of a free drink; internet users rating songs for gift vouchers rate more songs as they approach their reward target. LinkedIn users are more likely to add information to their profiles when they see a "profile completeness" progress bar showing how close they are to finishing. Uber Labs addressed this by designing maps that go to great lengths to emphasize how close the car is to the pickup point and destination. All these psychological "hacks" have made Uber the world’s most recognizable taxi company and a global dominant force.

3. The Power of Psychological Moonshot

The term "moonshot" originates from the Apollo 11 space mission. In 1969, Apollo 11 became the first to send humans(Neil Armstrong)to the moon, with Armstrong calling the landing "one small step for man, one giant leap for mankind." A psychological moonshot, however, is a giant leap forward powered by the force of psychology.

In an interview, Rory Sutherland stated: "It’s far harder to double passenger satisfaction by making trains ten times faster than to use psychological principles to make customers feel trains are ten times faster. If passengers can use Wi-Fi normally on trains, I don’t think governments like the UK’s need to spend $50 billion on speeding up trains. The biggest advancements in the next 50 years may not be technological, but psychological and design-thinking advancements."

Some hand sanitizer manufacturers add menthol to their products for one sole purpose: to create a tingling sensation on the hands, which triggers a powerful psychological effect. This can also be seen in pharmaceuticals and health products, where making you feel something is working makes you believe it’s effective. This approach leverages the Goal Gradient Effect to reduce uncertainty, waiting time, and frustration in the process. For the brand, this small change has delivered a series of "moonshot-level" results.

Psychological moonshots allow brands to create huge perceived value through small, often free superficial changes. These are the kinds of value that entrepreneurs, marketers, and creatives strive to create.