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Hooked: How to Build Habit-Forming Products

By: Nir Eyal

Reviewed By: Ramona Sukhraj

We live in an age of digital addiction.

Everyone’s glued to their phones, tablets, apps, but for the most part, not many of us know or understand why.

Hooked: How to Build Habit-Forming Products, written by Nir Eyal, takes a fascinating look into just that. It takes a deep dive into the the psychology of consumer behavior and habit formation and asks, “why are we really hooked to certain products?”

Hooked breaks this down into an actionable science that can be learned and replicated for your own business.

Forming Internal Triggers

It’s no coincidence that some of the most profitable businesses in the world have found a way to tap into the internal triggers of consumers, so they feel a natural urge to make the purchase, instead of forced.

For the purpose of this book, Eyal defines habits as: “automatic behaviors triggered by situational cues -- things we do with little or no conscious thought.”

According to him, the convergence of access, data, and speed is making the world a more habit-forming place, and who can argue with him?

Thanks to social media and Google, we expect instant gratification from everything we do.

When we have a question, all we have to do is type it into Google or YouTube and we have a detailed answer in seconds. The same goes for being bored, all we have to do is logon to Facebook, Twitter, or Buzzfeed and we are bombarded with people and things to entertain us.

That urge you get to check Twitter or Instagram is what Eyal describes as an internal trigger and the more we reward those triggers, the more often we experience those triggers.

This sounds harmless (and to a large degree it is), but scientific research has found that Facebook addiction activates the same areas of the brain as drug addiction.

Companies understand this and they know that tapping into our internal triggers provides a powerful influence on our purchasing behavior.

The Hook Model

According to Eyal, the Hook Model outlines an experience designed to connect the user’s problem to a solution frequently enough to form a habit. You may recognize the illustrated model below. It is the “habit loop” from The Power of Habit by Charles Duhigg.

hooked-the-hook-model

As you can see, The Hook Model is a simple four-step formula that explains the process of habit formation. Let’s take a more detailed look at each step.

Step #1: Trigger Behavior

The trigger is what causes the behavior to happen. It can be internal or external.

An example of an external trigger would be a notification from your Facebook app. You weren’t even thinking about Facebook, but as soon as you get a notification, you have an urge to login.

Step #2: Perform Action

The action you perform is the actual behavior done in anticipation of the reward.

The two ways to increase the likeliness of a person taking action are:

  1. Making the action easy to perform
  2. Providing motivation to perform that action

Continuing with the same example above, the action in this loop is logging into Facebook. It’s quite simple, you just click on the app and (unless you’ve previously logged out) you’re good to go.

Step #3: Variable Reward for Action

Feedback loops are all around us, but predictable ones don’t create desire -- so it’s more effective to offer variable rewards. The inconsistency and unknown result is what makes us come back for more.

We know there’s a chance that the reward could be good or bad, but the possibility of a positive outcome is what keeps us interested.

Facebook offers variable rewards by updating your newsfeed every time you reopen the app.

Some of the things you see you won’t like, some you’ll find funny, some will make you angry, etc.

Even the notification is a variable reward.

Is it a friend request? Did someone tag me in a photo? Maybe it’s just another annoying Candy Crush invite…

The outcome could be great or dismal, but the only way to find out is to log in.

Step #4: Commitment to Product (Investment)

Investment happens once we put something of value into the product or service.

For example, time, money, data, effort, or perhaps social capital (i.e. adding friends, photos, etc.)

This investment is an action that implies an improvement in the service for the next go-around and increases the odds that the user will make another pass through the Hook cycle in the future.

This is why when you sign-up for Facebook (or any other social media platform) they want you to immediately start finding friends and building your profile.

They’ll show you reminders that your profile isn’t complete or that you haven’t used the friend finder tool. The more time and energy you invest, the more likely you’ll be back. Face it, Facebook wouldn’t be much fun to use if you didn’t have other people to connect with.

The Habit Zone

Ideally, you want your company’s product or service to be in the “Habit Zone.”

Being in the Habit Zone offers several benefits:

  • Increasing Customer Lifetime Value  -- The lifetime value of a customer is how much money your business earns from one customer over the course of their lifetime, before they stop using your product for whatever reason. User habits increase how long and how frequently your customers use your product or service.
  • Providing Pricing Flexibility -- This is how a lot of tech startups have smoothly transitioned from offering a free service to offering a paid service, by creating the habit in their users before launching the paid version. In less than four years of launching their premium service, 26% of Evernote customers were paying for something they previously used for free.
  • Rapid Growth -- Products that quickly become a part of users’ everyday lives spread like wildfire. This is because they have a short Viral Cycle Time, which is the time it takes a user to invite another user. “For example, after 20 days with a cycle time of two days, you will have 20,470 users, but if you halved that cycle time to one day, you would have over 20 million users!”
  • Competitive Advantage -- User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies. Eyal mentions an example of the QWERTY keyboard layout that, while not the most efficient, consumers refuse to move away from. This is why Eyal suggests implementing small changes at a time to your product or service, because people don’t like to change their habits.
  • Building the Mind Monopoly -- Successfully changing long-term user habits is exceptionally rare. When we create a new habit we form a physical neural pathway in our brain that never goes away. That’s why it’s so easy to slip into old habits after we’ve changed our behavior. For example, as explained by Eyal, adapting to the differences in the Bing interface is what actually slows down regular Google users and makes Bing feel inferior, not the technology itself.

hooked-the-habit-zone

Google and Amazon are two obvious examples of being in the Habit Zone.

Google users will do multiple searches a day, but each individual search isn’t really any better or worse than using a competitor service like Bing or Yahoo.

On the other hand, Amazon users might visit less frequently, but they receive great value knowing that they’ll find anything they need at one store.

Vitamins vs. Painkillers

Eyal goes on to illustrate habit-forming technology with an interesting analogy:

“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. We feel satisfied that we are doing something good for our bodies -- even if we can’t tell how much good it is actually doing us.

Habit-forming technologies are both. These services seem at first to be offering nice-to-have vitamins, but once the habit is established, they provide an ongoing pain remedy.”

Is Creating a Habit-Forming Product Immoral?

Towards the end of the book, Eyal discusses the morality of creating new habits for customers and getting them hooked on your product or service.

Creating habits can be a force for good. For example, look at how Weight Watchers has clearly designed a habit-forming product that’s intended to improve the lives of its customers. On the other hand, casinos have applied these same techniques very effectively, which has destroyed the lives of many of their customers.

Eyal quotes Chris Nodder, author of the book Evil by Design, by saying: “It’s OK to deceive people if it’s in their best interest, or if they’ve given implicit consent to be deceived as part of a persuasive strategy.”

Eyal then presents us with his own Manipulation Matrix, which provides a scale of morality based on the real value of your habit-forming product and whether you use it yourself.

manipulation-matrix-nir-eyal

Ultimately, it’s up to you to decide what is moral or not. One thing's for sure, we are only going to see this habit-forming strategy used more and more.