[Book Summary] Hooked: How to Build Habit-Forming Products

Source: UX Planet

Knowing how to build habit-forming products is becoming increasingly important for tech entrepreneurs. Some business segments (e.g. social media) require products to be habit-forming, in order to be competitive.

Even for other segments where this isn’t necessary, it has the ability to increase customer lifetime value (CLTV) by encouraging customers to use the product more often and for a longer period of time, and create hockey stick growth for nascent apps.

However, it’s important to remember that creating habit-forming experiences is essentially a form of manipulation, and entrepreneurs should use these techniques only for building healthy habits. More on the morality of this later.

Habit Cycle

Habits are formed when this cycle is repeated over and over again. The writer, Nir Eyal, terms this: the Hooked model.

Source: Alexander Cowan

Trigger

Habits always start with a trigger to get users to do something. There are two forms of triggers: internal and external.

External triggers come in several forms:

1. Paid: Such as advertisements and social media marketing. These are often effective but companies cannot rely on paid methods because it is too expensive in the long run.
2. Earned: Such as press coverage and viral videos. These generate a huge amount of traffic but are short-lived, and unsustainable for most companies.
3. Relationship: Usually where one person tells another about the product. Building a user base that’s enthusiastic about sharing is difficult, but incredibly fruitful if successful.
4. Owned: Where a company owns a space in users’ environments, such as an app icon on a user’s phone. Getting users to download the app takes effort, but subsequently, sending external triggers becomes a breeze.

But external triggers are limited — companies can only contact users so many times in a day. They are powerful starting points for introducing users to the product and nudging users to use it, but they aren’t enough for habit formation.

This is where internal triggers come in. These triggers are intangible, manifesting in users’ minds. They are always associated with certain emotions.

“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/service as a source of relief” ~Nir Eyal

For example, my internal trigger for using Reddit is boredom. During the long commute home from work, or during the tiresome meeting that doesn’t matter to me, I feel bored — an emotion which I associate with mindless scrolling through Reddit.

To create internal triggers, identify pain points in emotional terms. If you have trouble with this, try using the “5 Why?” method — keep asking “Why?” for the pain point you’ve identified, until you reach an emotion.

Internal triggers are the holy grail of habit-forming products. They are difficult but necessary.

Action

Once a trigger has reached the user, the user performs the desired action if they have sufficient motivation and ability to do so.

Increasing motivation is difficult, particularly as a product designer trying to optimize the product. Focusing on increasing the ability of users to perform an action usually proves more worthwhile. Here’re some general areas to take note of:

1. Time taken
2. Monetary cost
3. Physical effort
4. “Brainpower” required
5. Disruption to normal routine

Reducing any of these will increase one’s ability, which usually leads to more action taken by users.

A well-known example is Facebook Login. Instead of forcing prospective customers to create a new username and password to sign up for a service (the desired action), they can simply click on “Login with Facebook”. This reduces the time taken to perform the action while reducing the mental load of creating and memorizing a new username and password. It’s unsurprising that services that have adopted Facebook Login receive a higher signup rate!

Source: blog.dashlane.com

To encourage action, entrepreneurs can leverage several heuristic biases:

1. Scarcity effect
2. Framing effect
3. Anchoring effect
4. Endowed progress effect

Variable Reward

Variable rewards satisfy the needs of users who perform the desired action while leaving them wanting for more. These rewards manifest in 3 forms:

1. Social Rewards: For example, we feel rewarded when our friends like, comment, and share our social media posts.
2. “Hunting” Rewards: For example, we feel rewarded when we spend time scrolling through the Twitter feed (“the hunt”) and find an interesting tweet.
3. Self-gratification: For example, finishing a puzzle or learning to code for fun.

At the same time, note that certain rewards should not be variable. For example, when users check their financial information apps, variability may cause them to lose trust in the product.

Variable rewards are powerful only when it’s something users want.

Investment

The more users invest their time and effort into a product, the more valuable it should become. For example:

• Twitter: The more energy users invest into finding interesting people to follow, the better their Twitter feed will be for them.
• Spotify: The more time users spend listening on the Spotify app, the better its music recommendations are.
• Adobe Photoshop: The more time users spend learning the software, the more efficient they become at their job.

The more valuable the product becomes to users, the more likely they are to continue using it.

Morality

The percentage of users who form a detrimental dependency on a product is very small. Even for slot-machine gambling, it is just 1%. But technology addiction is still a real problem that product designers must be cognizant of.

Nir Eyal developed the Manipulation Matrix to explore the ethical considerations of habit-forming products.

Source: Hooked by Nir Eyal

• Facilitator: Have the highest chance of success and most ethical
• Peddler: Often consists of holier-than-thou products that use run-of-the-mill incentives like badges and points. Such products are not unethical (usually) but the odds of successfully designing such a product is extremely low, due to the disconnect between the company and its users.
• Entertainment: Usually consists of games, films, etc.
• Dealer: A classic example is the slot machine. Products belonging to this category are in a morally precarious position.

Conclusion

Nir Eyal’s Habit Cycle is a powerful model for creating widely-used products/services. It is already responsible for the success of many services in education, fitness, and many other industries.

And founders should use the Manipulation Matrix to ask themselves —

Is this habit-forming product ethical?