- John Tierney writes the "Findings" science column for The New York Times; Roy F. Baumeister is a social scientist and psychologist, and is the Eppes Eminent Scholar and a professor of psychology at Florida State University.
- The following is an excerpt from their book, "The Power of Bad: How the Negativity Effect Rules Us and How We Can Rule It."
- In it, they focus on Adele Gutman's success at the Library Hotel Collection, whose properties, through her efforts, consistently rank at the top of TripAdvisor lists.
- Gutman has identified the importance of the peak-end rule, where a bad last impression is worse than a bad first one.
- You should always try and leave a job interview on a good note, and, in business, avoid any unexpected surprises when the customer pays.
- Visit Business Insider's homepage for more stories.
What's the secret sauce? Adele Gutman gets asked that question a lot. She is the mastermind behind the success of the Casablanca as well as the half‑dozen other boutique hotels of its parent company, the Library Hotel Collection. The hotels in New York, Toronto, and Prague all rank perennially in TripAdvisor's top 10 for their cities, and the one in Budapest, the Aria, took TripAdvisor's annual award in 2017 as the No. 1 hotel worldwide.
So Gutman has been barraged with queries from other hoteliers and invitations to give master classes at trade conferences. She can talk the business‑school talk, expounding on "best practices in reputation management" and offering mantras like "Service Is Marketing," but there's one phrase she keeps coming back to: "sparkling sunshine." She said it with a smile and a fluttering of her perfectly manicured fingers to illustrate the sunshine her staff is sparkling over every guest.
"You have to double up on the good things," she said. "If you manage to connect with every single guest, you've given yourself an insurance policy against bad reviews because they're not likely to say something negative about somebody who's their friend. You have to go over the top so they forget the bad things. I never use phrases like 'meeting people's expectations' or 'satisfying customers.' I say 'sparkling sunshine,' and our staff gets exactly what I mean."
There is nothing haphazard about this sunshine. It's a system she developed after taking over the marketing of the Casablanca and its sister hotels in 2005, when they were ranked lower on TripAdvisor. She realized that they couldn't compete with low‑end hotels for price or high‑end hotels for luxury. They were small hotels with a sense of style — the Casablanca had a Moroccan theme taken from the Humphrey Bogart movie — but they didn't offer palatial suites or sweeping views. She also knew, though, that luxury was not the formula for getting to the top of TripAdvisor's rankings. Deluxe hotels in New York like the St. Regis and the Plaza were routinely outranked by cheaper hotels because their guests expected so much and would find something to complain about. The secret to making that crucial first web page on TripAdvisor was to avoid negative reviews.
After studying the reviews, she drew up a list of all the "contact points" between a guest and the hotel, from making the reservation to checking out, and resolved to sparkle sunshine at every point. The front desk started keeping a diary listing every request or complaint from a guest and how it was handled. Gutman focused on hiring cheery extroverts and coaching them to engage the guests whenever possible. The telephone reservation agents at the Casablanca don't just book a room; they ask why the guest is coming to New York and if there's anything special they need.
From the doorman to the front‑desk clerk to the bellhop, everyone is supposed to beam — "Welcome to our hotel!" — and treat the guest's arrival as a singularly delightful treat: "Oh, this is your first time in New York? We're going to have fun with you! The favorite part of our job is helping people make the most of New York. If you want any recommendations or help, please, please, let us know." When the bellhop shows the guests to the room, he watches their reaction and reports back to the manager. If the guests seem unenthusiastic, the manager will call to make sure it's alright and offer another room if possible.
That welcome may seem like overkill, and no doubt some weary travelers would rather check in without all the fuss. But this strategy makes perfect sense to researchers who have studied how people form judgments. First impressions really do matter, and they're definitely governed by the negativity bias. Some of the clearest evidence comes from tracking reactions of people administering job interviews. When the candidate makes a good first impression, the interviewer will be swayed only slightly, and that mildly favorable impression can be quickly reversed. But if a candidate comes off badly in the first moments, he'll have to spend the rest of the interview trying to make up for it, and he'll be lucky to get back to neutral.
If the job interview ends on a sour note, the candidate had better keep looking elsewhere, because a bad last impression is even worse than a bad first impression. It's an example of what psychologists call the peak‑end rule, which was demonstrated by having people immerse their hands in ice water. First, they dunked their hands for 60 seconds. Then, after a break, they dunked their hands again, but this time they kept them there for 90 seconds, with the water getting slightly warmer during the final 30 seconds. Later, they were told they had to undergo one more dunking and asked which version they'd prefer.
Most people preferred the second version. Although it lasted longer and involved more overall pain, afterward it seemed less painful because it had ended with slightly warmer water. The effect was confirmed in studies of patients' reactions to a colonoscopy or the removal of kidney stones. The duration of the procedure and the total amount of pain mattered less than the combination of two other factors: the peak level of pain and the level of pain at the very end.
A less painful demonstration of the peak‑end rule occurred one Halloween when researchers from Dartmouth staked out a home and carefully doled out candy to trick‑or‑treaters. Some of the children got a single treat, a Hershey bar, while others received first the Hershey bar and then a piece of bubble gum. When asked to rate the candy at that home, the children who got both treats were less satisfied than the ones given only the Hershey bar. That measly piece of gum at the end soured the experience. It may sound childish to be less happy with more candy, but adults reacted no differently to the gifts they received in another experiment. The ones who got DVDs of a good movie and a mediocre movie were less satisfied than the ones who got just the good movie. The moral for gift givers: Save the best stuff for last.
The peak‑end rule is relevant to both bad and good experiences — but not equally, of course. Suppose your supervisor is about to divvy up a year‑end bonus pool, and you're being compared with a fellow salesperson. She was consistent week to week in generating money for the firm, whereas you had more ups and downs, but over the course of the year you both averaged the same amount of revenue. How will your supervisor reward each of you? Variations of this scenario were tested by researchers in South Korea, who expected, in accordance with the peak‑end rule, that the supervisor would pay more attention to the extreme weekly highs and lows than to the annual average.
It turned out the researchers were half right. If your most extreme week was a bad one, your supervisor would indeed rate you lower than your colleague even though you'd gradually made up for it over the course of the year. But if your most extreme week was a good one, you'd end up with the same bonus as your colleague. Instead of being swayed by the spectacular figure that week, your supervisor would see that it was counterbalanced by the many weeks in which your colleague did slightly better.
The peak‑end rule helps explain why reviewers on TripAdvisor will rant about an unpleasant surprise at checkout — "Beware the minibar bill!" — or fixate on the sleep they lost because of street noise. The complaints can seem ridiculously petty — "I was extremely upset to find only one tube of shampoo in the shower" — but Adele Gutman takes them all seriously.
"Traveler reviews are like a free customer focus group," she said. "Even when they're unfair, you can learn something from them." She has eliminated obvious sources of irritation at checkout time by not having minibars in the rooms and providing free bottles of water, free WiFi, and free breakfast. To avoid unpleasant surprises, the website offers photo tours of each room with painstaking details on what's there (the size of the room and the bed) and what's not ("no view of the city"). It warns that front rooms facing Forty‑Third Street get more street noise, and the back rooms get less light. Guests with sleeping problems are urged to take advantage of the hotel's "Escape to Serenity Program," which offers mattress toppers, an assortment of special pillows, earplugs, white‑noise machines, and headbands equipped with built‑in headphones to play soothing sounds.
Gutman has also created one more "contact point" with the guests by luring them into the lounge throughout the day, where complimentary snacks and coffee are offered around the clock, and there's a reception every evening with wine and cheese. The point isn't just to propitiate the guests with freebies. It gives Gutman and the staff more chances to sparkle sunshine and forestall complaints. "When you're constantly taking the guests' temperature," she said, "you can find out if there's some little thing they were too shy to ask for — something that could be the difference between a four‑star and five‑star review." As we've seen, listening to bad is a crucial step in overcoming it.
Thanks to all its strategies, the Casablanca has maintained a five‑star rating on TripAdvisor for over a decade. Close to 90% of the reviews are for five stars, and only 3% are below four stars. While some of Gutman's tactics are peculiar to the hotel industry — most businesses don't offer a chance to mingle with customers every day at a wine‑and‑cheese reception — the basic strategies can be applied in other businesses. Gutman's secret sauce is a set of techniques for overcoming the negativity bias and the peak‑end rule:
- Focus on making a good first impression.
- Look for ways to create many more good impressions. (If "spar- kling sunshine" seems too corny a mantra, come up with your own.)
- Anticipate and eliminate any irritant that could become a negative peak.
- Keep monitoring your customers' reactions to watch for unanticipated problems.
- When a complaint arises, respond quickly no matter how petty it seems.
- Don't just correct something bad. Overwhelm it with good.
- No matter how crazy or obnoxious the customer, end on a good note.
Most transactions end with the customer paying the bill, hardly the best of notes, but smart businesses can find ways to blunt the pain, as restaurants do when they provide a free dessert or present the check along with some complimentary chocolates.
Netflix prospered in its early days by eliminating the late fees that infuriated customers returning movies to their local video store. Retailers like L.L.Bean, Lands' End, IKEA, and Nordstrom placate unhappy customers by letting them return items long after the normal 30‑day grace period. Rental‑car companies and hotels have learned to combat sticker shock by warning customers in advance of all the taxes and fees that will be added to the bill.
From "The Power of Bad: How the Negativity Effect Rules Us and How We Can Rule It." Published by arrangement with Penguin Press, a member of Penguin Random House LLC. Copyright © by 2019 John Tierney and Roy F. Baumeister.
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