In the book "Thinking, Fast and Slow," Nobel Memorial Prize winner in Economics Daniel Kahneman summarizes decades of his research in areas such as judgment, decision making and behavioral economics. One theory of particular interest to the research team at Fortune Brands Home & Security is what Kahneman calls the “Peak – End Theory.”
The theory states that people judge overall experiences almost entirely by how they felt during the peaks in the experience and at the end or final outcome, and tend to disregard the overall net experience. We used this as the basis for longitudinal research that followed consumers through major kitchen and bath remodeling projects. Insights gained from this and other research can help those in the home repair and remodel (R&R) industry better understand how brands can influence consumer decisions.
We identified couples who were in the planning and selection phases of a remodeling project, then followed them through their remodel experience. We did this in three ways: we gathered data through an online portal where participants shared details of their experience at different points in their remodel project; the couples were accompanied to retail stores so we could observe how purchases were made; and we visited in their homes during the projects.
The research delivered some interesting findings:
• Priority projects sometimes focus on enjoyment rather than need – From the day a home is purchased there is a mental list of “must do, “want to do” and “wish to do” projects, but these are often prioritized in surprising ways. For example, one couple had leaking windows but the project had been a low priority for years over other projects where the couple felt they could better enjoy their home.
• Competition for budget sometimes results in smaller initial projects – Not surprisingly, there are many other expenses that compete for remodeling dollars such as vacations, cars or children’s expenses. Consumers often break-up a larger project into multiple less expensive projects that they complete over time.
• There are a variety of triggers that make remodeling projects possible – Projects were driven by a number of different triggers such as a financial windfall. For example a tax return, a life change like becoming an empty nester or the need to keep up with peers could be important financial triggers. This tells us there are potential sales opportunities at key times of the year or within certain age ranges.
Areas where we identified the “peaks” in the remodel process:
• It’s all about the finished room: The ability to see how the individual components of the project would all come together was a “peak” point for many. The inability to see how all the components of a project fit together was a major stress point for others. The ability for retail displays to allow consumers to experience products together are important to consumers.
• Style and quality are extremely important: Online research was conducted by all of the subjects in the study however, the ability to touch and feel products in person was still a critical need. For many determining “quality” required them to be able to touch and feel the products before purchase.
• The number of decisions are overwhelming – Consumers experienced the most happiness early in the process during the dream/planning phase and then again at the completion of the project. Happiness diminished in the product selection and install phase due to the sheer number of decisions that consumers had to make along the lines of design, color, finish and material, etc.
The end product that you deliver to your consumer is ultimately the most important factor in the remodel process. However, being able to identify the peak points in the remodel process and working to accentuate or alleviate these points will increase the likelihood of your customers hiring you for additional work and sending new clients your way.