Hooked: How to build habit forming products

I am back with a blog entry after eons and plan to continue my notes spree for next few weeks as I have couple of books lined up for reading.

Just like always: I do not claim to own the copy or IP rights. All the credits go to the authors of the book and reading my notes is not equivalent to reading the book. You will find these notes handy if you already have read the book and need to recollect the principles in short.

I finished reading, “Hooked: How to build habit forming products” by Nir Eyal with Ryan Hoover. The book talks about Hook model and how it provides framework to designing products that keep users to come back.

Why do you need habit forming products?

Companies that form strong user habits enjoy several benefits to their bottom line. These companies attach their product to internal triggers. As a result, users show up without any external prompting.

Instead of relying on expensive marketing, habit forming companies link their services to the users’ daily routines and emotions.

Through consecutive Hook cycles, successful products reach their ultimate goals of unprompted user engagement , bringing users back repeatedly, without depending on costly advertising or aggressive messaging.

The Hook Model

1)    Trigger: A trigger is the actuator of behavior. Triggers come in two types: external and internal. Habit-forming products start by alerting users with external triggers like an email, app icon. When users start to automatically cue their next behavior, the new habit becomes part of their everyday routine.

2)    Action:  Following trigger comes the action: the behavior done in anticipation of a reward. This phase of the hook draws upon the art and science of usability design to reveal how products drive specific user actions.

3)    Variable Reward: Variable rewards are one of the most powerful tools companies implement to hook users.

4)    Investment: The investment phase increases the odds that the user will make another pass through the Hook cycle in the future. The investment occurs when the user puts something into the product of service such as time, data, effort, social capital or money.

When harnessed correctly, technology can enhance lives through healthful behaviors that improve our relationship make us smarter and increase productivity.

Notes From The Chapter

Chapter End Notes

·      Habits are defined as “behaviors done with little or no conscious thoughts.”

·      The convergence of access, data and speed is making the world a more habit-forming place.

·      Businesses that create customer habits gain a significant competitive advantage.

·      The hook Model describes and experience designed to connect the user’s problem to a solution frequently enough to form a habit.

·      The Hook model has four phases: trigger, action, reward, and investment

1)  The Habit Zone:

Why Habits are good for business?

If our programmed behaviors are so influential in guiding our everyday actions, surely harnessing the same power of habits can be a boom for industry. Indeed, for those able to shape them in an effective way, habits can be very good for the bottom line. Specifically in:

·      Increasing Customer Lifetime Value

·      Providing pricing flexibility

·      Supercharging growth

·      Sharpening the competitive edge

Habit forming products change user behavior and create unprompted user engagement. The aim is to influence customers to use your product on their own, again and again, without, relying on overt calls to action such as ads or promotions. Once a habit is formed, the user is automatically triggered to use the product during routine events such as wanting to kill time while waiting in line.

Vitamins Vs. Painkillers:

·      Painkillers solve an obvious need, relieving a specific pain, and often have quantifiable markets.

·      Vitamins, by contrast, do not necessarily solve an obvious pain point. Instead they appeal to users’ emotional rather than functional needs

2)      Trigger

Habits are like pearls. New habits need a foundation upon which to build. Triggers provide the basis for sustained behavior change.

Triggers come in two types: external and internal

1)    External: External triggers are embedded with information, which tells the user what to do next. The following are types of external triggers:

a.     Paid Triggers: Advertising, SEM, and other paid channels are commonly used to get users’ attention and prompt them to act.

b.    Earned Triggers: Earned triggers are free in that they cannot be bought directly, but they often require investment in the of time spent on public and media relations.

c.     Relationship Triggers: One person telling others about a product or service can be a highly effective external trigger for action.

d.    Owned Triggers: Owned triggers consume a piece of real estate in the user’s environment. They consistently show up in daily life and it is ultimately up to the users to opt in to allowing the triggers to appear.

2)    Internal: Internal triggers manifest automatically in your mind. Connecting internal triggers with a product is the brass ring of consumer technology. Gradually, these bonds cement into a habit as users turn to your product when experiencing certain internal triggers. In the case of internal triggers, the information about what to do next is encoded as a learned association in the user’s memory.

Building for triggers: The ultimate goal of a habit-forming product is to solve the user’s pain by creating an association so that the user identifies the company’s product or service as the source of relief.

3)  Action

Dr. B. J. Fogg posits that there are three ingredients required to initiate any and all behaviors:

a)    The user must have sufficient motivation

b)    The user must have the ability to complete desired action; and

c)     A trigger must be present to activate the behavior.

Elements of simplicity:

Fogg describes six elements of simplicity – the factors that influence a task’s difficulty. 

1)    Time – how long does it take to complete an action

2)    Money – the fiscal cost of taking an action.

3)    Physical effort – the amount of labor involved in taking the action.

4)    Brain Cycles – the level of mental effort and focus required to take an action.

5)    Social deviance – how accepted the behavior is by others.

6)    Non-routine – according to Fogg, How much the action matches or disrupts existing routines.

On Heuristics and Perception

There are many counterintuitive and surprising ways companies can boost users’ motivation or increase their ability understand heuristics – the mental shortcuts we take to make decisions and form opinions.

·     The Scarcity Effect: The appearance of scarcity affected their perception of value.

·     Framing Effect: The mind takes shortcuts informed by our surroundings to make quick and sometimes erroneous judgements.

·     Anchoring Effect: People often anchor to one piece of information when making a decision.

·     Endowed Progress Effect:The study demonstrates the endowed progress effect, a phenomenon that increases motivation as people believe they are nearing a goal.

4)  Variable Rewards

·    Understanding variability: When something breaks the cause and effect pattern we’ve come to expect – when we encounter something outside the norm – we suddenly become aware of it again. Novelty sparks our interest, makes us pay attention, and – like a baby encountering a friendly dog for the first time – we seem to love it.

·    Rewards of Tribe, Hunt and Self:

a)    Tribe: Our brains are adapted to seek rewards that make us feel accepted, attractive, important, and included.

b)    Hunt: The need to acquire physical objects, such as food and other supplies that aid our survival, is part of our brain’s operating system.

c)     Self: The rewards of self are fueled by intrinsic motivation. The self determination theory espouses that people desire, among other things, to gain a sense of competency. Adding an element of mystery to this goal makes the pursuit all the more exciting.

5)  Investment

·      The more users invest time in product or service the more they value it. In fact, there is ample evidence that suggest that labor leads to love.

o  We irrationally value our effort

o  We seek to be consistent with our past behavior

o  We avoid cognitive dissonance

·      Storing values: The stored value users put into the product increases the likely hood they will use it again in the future and comes in variety of forms.

o  Content: The collective memories and experience, in aggregate, become more valuable over time and the service becomes harder to leave as users’ personal investment grows.

o  Data: The more information users invest the more committed they become to it.

o  Followers: Investing in following the right people increase the value of the product by displaying more relevant and interesting content.

o  Reputation: Makes users more likely to stick with whichever service they have invested their efforts in to maintain a high quality score.

o  Skill: Once users have invested the effort to acquire a skill, they are less likelt to switch to a competing product.

6)  Manipulation Matrix

7)  Habit Testing

·   Building habit forming product is an iterative process and requires user behavior analysis and continuous experimentation.

o   Step 1: Identify – First define what does it mean to be devoted user. How often “should” one use your product?

o   Step 2: Codify – You are looking for a Habit Path – a series of similar actions shared by most of your loyal users.

o   Step 3: Modify – Tracking users by cohort and comparing their activity with that of habitual users should guide how products evolve and improve.

·     Whenever technologies suddenly make a new behavior easier, new possibilities are born.

Remember and Share

·      For some businesses, forming habits is a critical component to success, but not every business requires habitual user engagement.

·      When successful, forming strong user habits can have several business benefits including higher CLTV, greater pricing flexibility, supercharged growth, and a sharper competitive edge.

·      Habits cannot form outside the Habit Zone, where the behavior occurs with enough frequency and perceived utility.

·      Habit forming products often start as nice-to-have (vitamins) but once the habit if formed, they become must haves (painkillers)

·      Habit-forming products alleviate users’ pain by relieving a pronounced itch.

·      Designing habit-forming products is a form of manipulation. Product builders would benefit from a bit of introspection before attempting to hook users to make sure they are building healthy habits, not unhealthy additions.

·      Negative emotions frequently serve as internal triggers.

·      To build a habit-forming product, makers need to understand which user emotions may be tied to internal triggers and know how to leverage external triggers to drive the user to action.

·      The action is simplest behavior in anticipation of reward.

·      For any behavior to occur, a trigger must be present at the same time as the user has sufficient ability and motivation to take action.

·      To increase the desired behavior, ensure a clear trigger is present; next, increase ability by making the action easier to do; finally, align with the right motivator.

·      Every behavior is driven by one of three Core Motivators: seeking pleasure and avoiding pain; seeking hope and avoiding fear; seeking social acceptance while avoiding social rejection.

·      Ability is influenced by six factors of simplicity. Ability is dependent on users and their context at that moment.

·      Heuristics are cognitive shortcuts we take to make quick decisions. Product designers can utilize many of the hundreds of heuristics to increase the likelihood of their desired action.

·      When our autonomy is threatened we feel constrained by lack of our choices and often rebel against doing a new behavior. Psychologists refer to this as reactance. Maintaining a sense of user autonomy is a requirement for repeat engagement.

·      Experiences with finite variability become increasingly predictable with use and lose their appeal over time. Experiences that maintain user interest by sustaining variability with use exhibit infinite variability.

·      Variable rewards must satisfy users’ need while leaving them wanting reengage with the product.

·      Unlike action phase, which delivers immediate gratification, the investment phase concerns the anticipation of rewards in the future.

·      Investment in a product create preferences because of our tendency to overvalue our efforts, be consistent with past experience and to avoid cognitive dissonance.

·      Investment comes after variable reward phase where users are primed to reciprocate.

·      Investment increase the likelihood of users passing through the Hook again by loading the next trigger to start the cycle all over again.

·      Facilitators use their own product and believe that it can materially improve their users lives. They have the highest chance of success as they closely understand the need of their users.

·      Predators believe that their products can materially improve their user’s life but they themselves do not use their products. They must beware of hubris and inauthenticity that comes from building solutions for people they do not understand.

·      Entertainers use their products but do not believe that their product can improve people’s lives. They can be successful but without making the life of people better in some way. Entertainer products often lack staying power.

·      Dealers neither use their products not believe that their products can improve people’s lives. They have the lowest chance of finding long term success and often find themselves in morally precarious positions.

·      Keen observation of one’s own behavior can lead to new insights and habit-forming product opportunities.

·      Identifying areas where a new technology makes cycling through hook framework faster, more frequent or more rewarding provides fertile ground for developing new habit forming products.

·      Nascent behaviors – new behaviors which few people see or do, yet ultimately fulfil a mass market need can inform future breakthrough habit forming opportunities.

·      New interface lead to transformative behavior change and business opportunities.

Do This Now:

If you are building a habit-forming product, write down the answers to these questions:

·      What habits does your business model require?

·      What problem are users turning to your product to solve?

·      How do users currently solve that problem and why does it need a solution?

·      How frequently do you expect users to engage with your product?

·      What user behavior do you want to make into a habit?

Triggers:

·      Who is your product’s user?

·      What is the user doing right before you intended habit?

·      Come up with three internal triggers that could cue your user to action. Refer to the 5 why’s method described in this chapter.

·      Which internal trigger does your user experience most frequently?

·      Finish this brief narrative using the most frequent internal trigger and the habit you are designing. “Every time the user (internal trigger), he/she (first action of intended habit)”

·      Refer back to the questions about what the user is doing right before the first action of the habit. What might be paces and times to send an external trigger?

·      How can you couple an external trigger as closely as possible to when the user’s internal trigger fires?

Action

·      Walk through the path your users would take to use your product or service, beginning the time they feel their internal trigger to the point where they receive their expected outcome. How many steps does it take before users obtain the reward they come for? How does this process compare with the simplicity of some of the examples described in Fogg’s principles? How does it compare with competing products and services?

·      Brainstorm three testable ways to make intended tasks easier to complete.

·      Consider how you might apply heuristics to make habit forming actions more likely.

Variable Reward:

·      Speak with five of your customers in an open ended interview to identify what they find enjoyable or encouraging about using your product. Are there any moments of delight or surprise? Is there particularly they find particularly satisfying about using your product?

·      Review the steps your customers take to use your product habitually. What outcome alleviates the user pain? Is the reward fulfilling yet wanting more?

·      Brainstorm three ways your product might heighten users search for variable reward:

o  Rewards of tribe: gamification with other users.

o  Rewards of hunt: money or information.

o  Rewards of self: mastery, completion, competency or consistency.  

·      Review your flow: what “bit of work” are users doing to increase likelihood of returning?

·      Brainstorm three ways to add investment to your product:

o  Load the next trigger

o  Store value as data, content, reputation, followers and skills

·      Identify how long does it take for a loaded trigger to reengage your users? How can you reduce the delay to shorten the spent cycle through the hook.

Manipulation Matrix

·    Take 10 minutes to identify where you fall on manipulation matrix.

Habit Testing

·    Perform habit testing

·    Speak to three people outside of your social circle to discover which apps occupy first screen on their mobile devices. Ask them to use the apps they normally would and see if you uncover any unnecessary or nascent behaviors.

·    Brainstorm five new interfaces that could introduce opportunities or threats to your business.