Hooked: How to Build Habit-Forming Products


Seventy-nine percent of smartphone owners check their phone within 15 minutes of waking up every morning. One-third of Americans say they would rather give up sex than lose their cell phones.

Candy Crush, Facebook, Instagram, SnapChat, Pinterest and Spotify. How many people download and use these apps on their phone so much so that using these products and services is not even a conscious choice anymore — it’s an instinct? How did we get so completely hooked?

Admittedly, it was my stint at a sports technology start-up that initially piqued my curiosity of Nir Eyal’s book, “Hooked: How to Build Habit Forming Products,” but beyond that, I know that Eyal’s insights and practical framework can be applied not only to designing products, but also to general habit formation. The concepts Nir lays out in Hooked are the future for product managers and designers looking for insights into making their consumer product more engaging.

I especially appreciated Nir’s ability to draw on insights from academia including: consumer psychology, human-computer interaction and behavior economics research.

Unfortunately, I do not think enough of my fellow marketing colleagues, spend enough time thinking and applying the behavioral sciences to marketing and business innovation.

What follows are some of my favorite takeaways from each chapter. Consider them your cliff notes. As a reminder, don’t use the below to skip the book. That’s a mistake. As my friend Ryan Holiday says, “Dollar for dollar there is no better investment in the world than a book.”

Introduction:

1. Forming habits is imperative for the survival of many products.

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

3. A multiscreen world of ad-wary consumers has rendered Don Draper’s big-budget brainwashing useless to all but the biggest brands.

The Hook Model process

4. The hook model:

  • Trigger – The actuator of behavior — the spark plug in the engine
  • Action – The behavior done in anticipation of a reward
  • Variable Reward – Unpredictable feedback loop (think slot machines)
  • Investment – Where a user does a bit of work
    • Inviting friends, stating preferences, building virtual assets, and learning to use new features are all investments users make to improve their experience.

 

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

Chapter 1: The Habit Zone

6. Ingrained habits — behaviors done with little or no conscious thought — guide nearly half of our daily actions. (Study)

7. Many of our daily decisions are made simply because that was the way we found resolution in the past.

On Increasing Customer Lifetime Value:

8. Fostering consumer habits is an effective way to increase the value of a company by driving higher customer lifetime value: the amount of money made from a customer before that person switches to a competitor stops using the product, or dies. User habits increase how long and how frequently customers use a product, resulting in higher CLTV.

On Supercharging Growth:

9. Facebook’s success was, in part, a result of what Nir calls the more is more principle — more frequently usage drives more viral growth. “The most important factor to increase growth is Viral Cycle Time,” says David Skok. Viral Cycle Time is the amount of time it takes a user to invite another user, and it can have a massive impact.

On Sharpening the Competitive Edge:

10. Better products don’t always win — especially if a large number of users have already adopted a competing product.

11. “Many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new,” explains John Gourville, professor of Marketing at Harvard Business School, in his classic Harvard Business Review paper, “Eager Sellers and Stony Buygers: Understanding the Psychology of New-Product Adoption“.

12. Users also increase their dependency on habit-forming products by storing value in them — further reducing the likelihood of switching to an alternative. (i.e. Google’s Gmail)

13. Higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharpened competitive edge together equal a more powerful bang for the company’s buck.

On Building the Mind Monopoly:

14. People rarely change their habits for long. Even when we change our routines, neural pathways remain etched in our brains, ready to be reactivated when we lose focus. For new behaviors to really take hold, they must occur often.

15. Consumers’ preference for an online retailer increased when they are offered competitive price information. (Study)

On Being in the Habit Zone:

16. 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).

On Vitamins vs. Painkillers:

17. Nir asks, “Are you building a vitamin or a painkiller?” Painkillers solve an obvious need, relieving a specific pain, and often have quantifiable markets. Vitamins, by contract, do not necessarily solve an obvious pain point. Instead they appeal to users’ emotional rather than functional needs.

18. A habit is when not doing an action causes a bit of pain.

19. Seeking pleasure and avoiding pain are two key motivators in all species.

Chapter 2: Trigger

On External Triggers: 

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

21. Give the user explicit instructions about what action to take. More choices require the user to evaluate multiple options. Too many choices or irrelevant options can cause hesitation, confusion or worse — abandonment. Reducing the thinking required to take the next action increases the likelihood of the desired behavior occurring unconsciously.

22. On Types of External Triggers:

  • Paid triggers include advertising, search engine marketing and other paid channels commonly used to get users’ attention and prompt them to act. Paid triggers can be effective but costly ways to keep users coming back.
  • Earned triggers are free in that they cannot be bought directly, but they often require an investment in the form of time spent on public and media relations.
  • Relationship triggers consist of word of mouth and product referrals from friends and family. They are often a key component of technology diffusion.
  • Owned triggers consume a piece of real estate in the user’s environment. They are only set after users sign up for an account, submit their e-mail address, install an app, opt in to newsletters, or otherwise indicate they want to continue receiving communications. Owned triggers prompt repeat engagement until a habit is formed.

 

23. Without owned triggers and users’ tacit permission to enter their attentional space, it is difficult to cue users frequently enough to change their behavior.

On Internal Triggers: 

24. When a product becomes a tightly coupled with a thought, an emotion, or a preexisting routine, it leverages an internal trigger. You can’t see, touch or hear an internal trigger.

25. Emotions, particularly negative ones, are powerful internal triggers and greatly influence our daily routines. Feelings of boredom, loneliness, frustration, confusion, and indecisiveness often instigate a slight pain or irritation and prompt an almost instantaneous and often mindless action to quell the negative sensation. For example, people often use Instagram when they fear a special moment might be lost forever. This negative emotion is the internal trigger that brings Instagram users back to the app to alleviate this pain by capturing a photo. An increasingly recognizable pain point is the fear of missing out, or FOMO.

On Building for Triggers:

26. How do you go about uncovering the source of a user’s pain? The best place to start is to learn the drivers behind successful habit-forming products –not to copy them, but to understand how they solve user’s problems.

27. Common needs are timeless and universal.

28. When the research focuses on what people actually do (watch cat videos) rather than what they wish they did (produce cinema quality home movies) it actually expands possibilities. Looking for discrepancies exposes opportunities.

29. The basis of Toyota’s scientific approach is … by repeating ‘why?’ five times, the nature of the problem as well as its solution becomes clear. (This is a technique employed by Ramit Sethi and others in helping their students develop successful products and services).

30. It is the fear of losing a special moment that instigates a pang of stress.

Trigger Summary: 

31. 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.

Chapter 3: Action

32. To initiate action, doing must be easier than thinking.

On Action vs. Inaction: 

33. BJ Fogg on the three ingredients required to initiate any action:

  • The user must have sufficient motivation
  • The user must have the ability to complete the desired action
  • A trigger must be present to activate the behavior

 

On Motivation: 

34. Motivation is “the energy for action.”

35. All humans are motivated to seek pleasure and avoid pain; to seek hope and avoid fear; and finally, to seek social acceptance and avoid rejection. Every behavior is driven by one of these three core motivators.

On Ability:

36. In his book Something Really New: Three Simple Steps to Creating Truly Innovative Products, author Denis J. Hauptly deconstructs the process of innovation into its most fundamental steps:

  • First, understand the reason people use a product or service
  • Next, lay out the steps the customer must take to get the job done
  • Finally, once the series of tasks from intention to outcome is understood, simply start removing steps until you reach the simplest possible process

 

 “Take a human desire, preferably one that has been around for a really long time.. Identify that desire and use modern technology to take the steps out.” — Evan Williams

Hooked features a number of great action examples from logging in with Facebook, sharing with the Twitter button and scrolling with Pinterest.

On Motivation or Ability First: 

37. The greatest return on investment generally comes from increasing a product’s ease of use. Increasing motivation is expensive and time consuming. Influencing behavior by reducing the effort required to perform an action is more effective than increasing someone’s desire to do it.

On Heuristics and Perception: 

38. Heuristics are the mental short cuts we take to make decisions and form opinions.

39: The endowed progress effect:

A phenomenon that increases motivation as people believe they are nearing a goal.

 40. Others brain biases to familiarize yourself with include:

Chapter 4: Variable Reward

41. The third step in the Hook Model is the variable reward phase, in which you reward your users by solving a problem, reinforcing their motivation for the action taken in the previous phase.

On Understanding Rewards: 

42. What draws us to act is not the sensation we receive from the reward itself, but the need to alleviate the craving for that reward.

On Understanding Variability: 

43: Without variability we are like children in that once we figure out what will happen next, we become less excited by the experience.

On Rewards of the Tribe, the Hunt, and the Self: 

44. Rewards of the tribe, or social rewards, are driven by our connectedness with other people.

45. It is no surprise that social media exploded in popularity. Facebook, Twitter, Pinterest, and several other sites collectively provide over a billion people with powerful social rewards on a variable schedule. With every post, tweet or pin, users anticipate social validation. Rewards of the tribe keep users coming back, wanting more.

Facebook as an example:

46. The uncertainty of what users will find each time they visit the site creates the intrigue needed to pull them back again. And while this variable content gets users to keep searching for interesting tidbits in their News Feeds, a click of the “Like” button provides a variable reward for the content’s creators.

47. Rewards of the hunt, is the need to acquire physical objects, such as food and other supplies that aid our survival. This is hardwired into our brain’s operating system. That said, unlike a hunter chasing his pray, today we find numerous examples of  variable rewards associated with the pursuit of resources and information. (Examples include: machine gambling, finding an interesting piece of content)

48. There are also variable rewards we seek for a more personal form of gratification. We are driven to conquer obstacles, even if just for the satisfaction of doing so.

49. The rewards of the self are fueled by “intrinsic motivation.” The self-determination theory espouses that people desire, among other things, to gain a sense of competency.

Codeacademy as an example:

50. Codeacademy’s symbols of progression and instantaneous variable feedback tap into rewards of the self, turning a difficult path into an engaging challenge.

Considerations for Designing Rewards Systems: 

51. Variable rewards must fit into the narrative of why the product is used and align with the user’s internal triggers and motivations.

52. Too many companies build their products betting users will do what they make them do instead of letting them do what they want to do.

53: Beware of finite variability — an experience that becomes predictable after use. (i.e. Typically, watching your favorite television show isn’t as fun the second time around after you know what’s going to happen).

54. E-mail utilizes all three variable reward types.

What subconsciously compels us to check our e-mail? First, there is uncertainty concerning who might be sending us the message. We have a social obligation to respond to e-mails and a desire to be seen as agreeable (rewards of the tribe). We may also be curious about what information is in the e-mail: Perhaps something related to our career or business awaits us? Checking e-mail informs us of opportunities or threats to our material possessions and livelihood (rewards of the hunt). Lastly, e-mail is itself a task — challening us to sort, categorize, and act to eliminate unread messages. We are motivated by the uncertain nature of our fluctuating e-mail count and feel compelled to gain control of our in-box (rewards of the self).

Chapter 5: Investment

On Changing Attitudes: 

55. Small investments change our perception, turning unfamiliar actions into everyday habits.

56. The more users invest time and effort into a product or service, the more they value it. In fact, there is ample evidence to suggest that our labor leads to love. On such example is what Dan Ariely calls the IKEA effect. He believes IKEA customers adopt an irrational love of the furniture they built.

57. Businesses 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.

On Cognitive Dissonance: 

58. To avoid the cognitive dissonance of not liking something that others seem to take so much pleasure in we slowly (through repeated exposure) change our perception of the thing we once did not enjoy. (Ex: think beer or spicy food).

59. The more effort we put into something, the more likely we are to value it; we are more likely to be consistent with our past behaviors; and finally, we change our preferences to avoid cognitive dissonance. (i.e. “This must be worthwhile. Why? Because I’ve spent time on it!”)

On Storing Value: 

60. On Facebook: 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.

61. On Twitter: No one wants to rebuild a loyal following they have worked hard to acquire and nurture.

On Loading the Next Trigger:

62. Investments increase the likelihood of users passing through the Hook again by loading the next trigger to start the cycle all over again. For example, with Pinterest, each pin, repin, like, or comment gives Pinterest tacit permission to contact the user with a notification when someone else contributes to the thread, triggering the desire t visit the site again to learn more. 

Chapter 6: What Are You Going to Do with This?

63. The first 5 chapters equip you to use the Hook Model to ask 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 action 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 wanting 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)

64. On the Morality of Manipulation:

The Manipulation Matrix: a simple decision support tool for entrepreneurs

  • Facilitators use their own product and believe it can materially improve people’s lives.
  • Peddlers believe their product can materially improve people’s lives but do not use it themselves. The odds of successfully designing products for a customer you don’t know extermely well are depressingly low. Peddlers tend to lack the empathy and insights needed to create something users truly want.
  • Entertainers use their product but do not believe it can improve people’s lives. These products often lack staying power.
  • Dealers neither use the product not believe it can improve people’s lives.

 

Obviously, you can guess which one of these categories has the highest chance of success.

Chapter 7: Case Study – The Bible App

Consider picking up the book for this chapter, in which Nir shows uses the Hook Model framework to show you how it all comes together in one of the world’s most popular apps.  

Chapter 8: Habit Testing and Where to Look for Habit-Forming Opportunities

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

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

  1. Identify your product’s habitual users.
  2. Codify the steps they took using your product to understand what hooked them. Look for  habit path — a series of similar actions shared by your most loyal readers.
  3. Modify. 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 iwsh someone else would solve for me?” — Paul Graham

 On Nascent Behaviors:

66. When technologies are new, people are often skeptical. Old habits die hard and few people have the foresight to see how new innovations will eventually change their routines.

In Conclusion:

The Hook Canvas

#####

Nir Eyal writes, consults and teaches about the intersection of psychology, technology, and business. He spent years in the video gaming and advertising industries, where he learned and tested the techniques described in Hooked to motivate and influence users. He is a frequent speaker at industry conferences and Fortune 500 companies, and has taught at the Stanford Graduate School of Business. His writing has appeared in Harvard Business Review, The Atlantic, Forbes, TechCrunch and Psychology Today. He lives in Palo Alto, CA, and blogs at NirAndFar.com

Disclaimer: I actually received an early copy of Nir’s hardback from the team at Penguin Random House in anticipation of the November 4 release. They were explicit that there were no strings attached; however, I’m certain they appreciate me sharing with all of you (albeit a bit later than I intended). Please know that for every one of these books I accept to review, I turn down 10 others. My nightstand stays full and I only review books I know that I will enjoy and that are applicable to share with all of you. Here are other book reviews I’ve done in the last few years.