“Hooked: How to Build Habit-Forming Products” by Nir Eyal

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INTRODUCTION

Companies who 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 external prompting.

Today, small startup teams can profoundly change behavior by guiding users through these hooks, the more likely they are to form habits.

Hook Model: a four-phase process companies use to forms habits. Through consecutive hooks cycles, successful products reach their ultimate goal of unprompted user engagement, bringing users back repeatedly.

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A trigger is the actuator of behavior — the spark plug in the engine. Triggers come in two types: external and internal. Habit-forming products start by alerting users with external triggers like an email, a website link, or the app icon on phone.

Following the trigger comes the action: the behavior done in anticipation of reward.

Variable rewards are one of the most powerful tools companies implement to hook users. Research shows that levels of the neurotransmitter dopamine surge when the brain is expecting a reward. Introducing variability multiplies the effect, creating a focused state, with suppresses the ares of the brain associated with judgment and reason while activation the parts associated with wanting and desire.

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.

THE HABIT ZONE

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.

Fostering consumer habits is an effective way to increase the value of a company by driving higher customer lifetime value(CLTV).

As customers form routines around a product, they come to depend upon it and become less price-sensitive.

Frequent usage create more opportunities to encourage people to invite their friends, broadcast content, and share through word-of-mouth. Hooked users become brand evangelists — megaphones for your company, bringing it new users at little or no cost.

User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies.

For new behaviors to really take hold, they must occur often. Frequent engagement with a product — especially over a short period of time — increases the likelihood of forming new routines.

For an infrequent action to become a habit, the user must perceive a high degree of utility, either from gaining pleasure or avoiding pain.

A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency(how often the behavior occurs) and perceived utility(how useful and rewarding the behavior is in the user’s mind over alternative solutions)

A behavior that occurs with enough frequency and perceived utility enters the Habit Zone, helping to make it a default behavior. If either of these factors falls short and the behavior lies below the threshold, it is less likely that the desired behavior will become a habit.

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Gatekeepers such as investors and managers want to invest in solving real problems — or, meeting immediate needs — by backing painkillers. Painkillers solve an obvious need, relieving a specific pain and often have quantifiable markets. In contrast, vitamins do not necessarily solve an obvious pain-point. Instead they appeal to users’ emotional rather than functional needs.

The habit-forming products we use are simply there to provide some sort of relief. Using a technology or product to scratch the itch provides faster satisfaction that ignoring it. Once we come to depend on a tool, nothing else will do.

TRIGGER

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

External triggers are embedded with information, which tells the user what to do next.

Types of External Triggers:

  1. Paid Triggers. Advertising, search engine marketing, and other paid channels are commonly used to get users’ attention and prompt them to act. Since paying for re-engagement is unsustainable for most business models, companies generically use paid triggers to acquire new users and then leverage other triggers to bring them back.
  2. Earned Triggers. Earned triggers are free in that they can not be bought directly, but they often require investment in the form of time spent on public and media relations. Favorable press mentions, hot viral videos, and features App Store placements are all effective ways to gain attention. For earned trigger to drive ongoing user acquisition, companies must keep their products in the limelight — a difficult and unpredictable task.
  3. Relationship Triggers. One person telling others about a product or service can be a highly effective external trigger for action. Proper use of relationship triggers requires building an engaged user base that is enthusiastic about sharing the benefits or the product with others.
  4. Owned Triggers. Owned triggers consume a piece of real-estate in the user’s environment. The consistently show up in daily life and it is ultimately up to the user to opt into allowing these triggers to appear.

While paid, earned, and relationship triggers drive new user acquisition, owned triggers prompt repeat engagement until a habit is formed. Without owned triggers and users’ tacit permission to enter their attentional space, it is difficult to cue users frequently enough to change their behavior.

When a product becomes tightly coupled with a thought, and emotion, or a preexisting routine, it leverages an internal trigger.

Users from find a product that alleviates their pain will form strong, positive associations with product over time.

Once a technology has created an association in users’ minds that the product is the solution of choice, they return on their own, no longer needing prompts from external triggers.

When it comes to figuring out why people use habit-forming products, internal triggers are the root cause, and “why?” is a question that can help drill right to the core.

ACTION

The trigger, driven by internal or external cues, informs the user of what to do next; however, if the user does not take action, the trigger is useless. To initiate action, doing must be easier than thinking. Remember, a habit is a behavior done with little or no conscious thought. The more effort — either physical or mental — required to perform the desired action, the less likely it is to occur.

There are three ingredients required to initiate any and all behaviors: (1) he user must have sufficient motivation; (2) the user must have the ability to complete the desired action; and (3) a trigger must be present to activate the behavior.

While internal triggers are the frequent itch experienced by users throughout their days, the right motivators create action by offering the promise of desirable outcomes.

The easy or difficulty of doing a particular action impacts the likelihood that a behavior will occur. To successfully simplify a product, we must remove obstacles that stand in the user’s way.

There are many counter intuitive and surprising ways companies can boost users’ motivation or increase their ability by understanding heuristics — the mental shortcuts we take to make decisions and form opinions.

  1. The Scarcity Effect. A product can decrease in perceived value if it starts of as scarce and becomes abundant.
  2. The Framing Effect. Perception can form a personal realty based on how a product is framed, even when there is little relationship with objective quality.
  3. The Anchoring Effect. People often anchor on one piece of information when making a decision.
  4. The Endowed Progress Effect. A phenomenon that increases motivation as people believe they are nearing a goal.

VARIABLE REWARD

To hold our attention, products must have an ongoing degree of novelty.

Variable rewards can be found in all sorts of products and experiences that hold our attention. They fuel our drive to check email, browse the web, or bargain-shop. Variable rewards come in three types: Tribe, hunt and self. Habit-forming products utilize one or more of these variable reward types.

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We are a species that depends on each other. Rewards of the tribe, or social rewards, are driven by our connectedness with other people. Rewards of the tribe keep users coming back, wanting more.

The search for resources defines the next type of variable reward — the reward for hunt. The need to acquire physical objects, such as food and other suppliers that aid our survival, is part of our brain’s operating system. But where we once hunted for food, today we hunt for other things. In modern society, food can be bought with cash, and more recently by extension, information translates into money.

Variable rewards are not magic fairy dust that a product designer can sprinkle onto a product to make it instantly more attractive. Rewards must fit into the narrative of why the product is used and align with the user’s internal triggers and motivations.

Whether coerced into doing something we did not intend people often feel constrained by threats to their autonomy and rebel. To change behavior, products must ensure the users feel in control. People must want to use the service, not feel they have to.

Products utilizing infinite variability stand a better chance of holding onto users’ attention, while those with finite variability must constantly reinvent themselves just to keep pace.

Understanding what moves users to return to habit-forming products gives designers an opportunity to build products that align with their interests.

INVESTMENT

Before users create the mental associations that activate their automatic behaviors, they must first invest in the product.

The more users invest time and effort into a product or service, the more they value it.

Business that leverage user effort confer higher value to their products simply because their users have put work into them. The users have invested in the products through their labor.

The timing of asking for user investment is critically important. By asking for the investment after the reward, the company has an opportunity to leverage a central trait of human behavior.

The big idea behind the Investment Phase is to leverage the user’s understanding that the service will get better with use (and personal investment).

Storing Value. The stored value users put into the product increases the likelihood they will use it again in the future and comes in a variety of forms.

Content. The collection of memories and experiences, in aggregate, becomes more valuable over time and the service becomes harder to leave as users’ personal investment in the site grows.

Data. The more data collected, the more the service’s stored value increases.

Followers. For many users, switching services means abandoning years of investment and starting over. No one wants to rebuild a loyal following they have worked hard to acquire and nurture.

Reputation. Reputation is a form of stored value that increases the likelihood of using a service. Whether a buyer or seller, reputation makes users more likely to stick with whichever service they have invested their efforts to maintain a high quality score.

Skill. Investing time and effort into learning to use a product is a form of investment and stored value. Once a user has acquired a skill, using the service becomes easier and moves them to the right on the Ability axis.

If users are not doing what the designer intended in the Investment Phase, the designer may be asking them to do too much. I recommend that you progressively stage the investment you want from users into small chunks of work, starting with small, easy tasks and building up to harder tasks during successive cycles through the Hook Model.

The more users invest in a product through tiny bits of work, the more valuable the product becomes in their lives and the less they question its use.

WHAT ARE YOU GOING TO DO WITH THIS?

You are now equipped to use the Hook Model to ask yourself these five fundamental questions for building effective hooks:

  1. What do users really want? What pain is your product relieving? (Internal Trigger)
  2. What brings users to your service? (External Trigger)
  3. What is the simplest actions users take in anticipation of reward, and how can you simplify your product to make this action easier? (Action)
  4. Are users fulfilled by the reward, yet left waning more? (Variable Reward)
  5. What “bit of work” do users invest in your product? Does it load the next trigger and store value to improve the product with use? (Investment)

The Manipulation Matrix does not try to answer which businesses are moral or which will succeed, nor does it describe what can and can not become a habit-forming technology. The matrix seeks to help you answer not, “Can I hook my users?” but instead, “Should I attempt to?”

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The Facilitator. When you create something that you would use and you believe makes the user’s life better, you are facilitating a healthy habit. In building a habit for a user other than yourself, you can not consider yourself a facilitator unless you have experienced the problem first-hand.

The Peddler. Peddlers tend to lack the empathy and insights needed to create something users actually want. Often the peddler’s project results in a time-wasting failure because the designers did not fully understand their users. As a result no one finds the products useful.

The Entertainer. Sometimes product-makers just want to have fun. If creators of a potentially addictive technology make something that they use but can’t in good conscience claim improves users’ lives, they’re making entertainment.

The Dealer. Creating the the designer does not improves users’ lives and then he himself would not use is called exploitation. In the absence of these two criteria, presumably the only reason the designer is hooking users is to make a buck.

HABIT TESTING AND WHERE TO LOOK FOR HABIT-FORMING OPPORTUNITIES

The process of developing successful habit-forming technologies requires patience and persistence. The Hook Model can be a helpful tool for filtering ideas with low habit potential as well as a framework for identifying room for improvement in existing products. However, after the designer has formulated new hypotheses, there is no way to know which ideas will work without testing them with actual users.

Habit Testing offers insights and actionable data to inform the design of habit forming products. It helps clarify who your devotees are, what parts of your product are habit-forming (if any), and why those aspects of your product are changing user behavior.

The following steps assume you have a product, users, and meaningful data to explore.

  1. Identify. First, define what it means to be a devoted user. How often “should” one use your product? Once you know how often users should use your product, dig into the numbers and identify how many and which type of users meet this threshold. As a best practice, use cohort analysis to measure changes in user behavior through future product iterations.
  2. Codify. If at least five percent of your users don’t find your product valuable enough to use as much as you predicted they would, you may have a problem. But if you have exceeded that bar and identified your habitual users, the next step is to codify the steps they took using your product to understand what hooked them. Every product has a different set of actions that devoted users take; the goal of finding the Habit Path is to determine which of these steps is critical for creating devoted users so that you can modify the experience to encourage this behavior.
  3. Modify. Armed with new insights, it is time to revisit your product and identify ways to nudge new users down the same Habit Path taken by devotees.

Instead of asking ‘what problem should I solve?’ ask ‘what problem do I wish someone else would solve for me?’

Observing your own behavior can inspire the next habit-forming product or inform a breakthrough improvement to an existing solution. Below, you’ll find other hotbeds for innovation opportunities.

  1. Nascent Behaviors. Behaviors that start with a small group of users can expand to a wider population, but only if they cater to a broad need. By looking to early adopters who have already developed nascent behaviors, entrepreneurs and designers can identify niche use cases, which can be taken mainstream.
  2. Enabling Technologies. Identifying areas where a new technology makes cycling through the Hook Model faster, more frequent, or more rewarding provides fertile ground for developing new habit-forming products.
  3. Interface Change. Many companies have found success in driving new habit formation by identifying how changing user interactions can create new routines.