Hooked: How To Build Habit Forming Products

Overview

Hooked lays the foundation for understanding user psychology and what techniques companies can use to create user habits. VERY informative and I think this should be mandatory reading for everyone who uses a smart phone or social media.

Intro

Habit-forming products attach themselves to internal triggers (emotions, daily routines, desires, validation, etc)
4 steps of the hook model: trigger, action, variable reward, investment.
Variable rewards surge dopamine , creates a focused state which suppresses areas of brain associated w/judgement & reason but activates parts of want and desire
Investment involves input from user (time, data, social cap, money, effort) to improve the service on next use (inviting friends, stating preferences, building virtual assets, learning how to use features)

Chapter 1: Habit Zone

Habits give us the ability to focus our attention on other things by storing automatic actions in the Basal Ganglia. (pg 16)

Building user habits for a product increases the CLTV (customer life time value)
As customers become attached to a product they are less Sensitive to price increases.
Goal of freemium models is to get users to form habit by the time they need to pay
Goal of forming habit is to increase user engagement.

“Most important factor to achieving growth is Viral cycle time"-David Skok ; VCT = time it takes for user to invite another user

frequent engagement w/ a product in short period of time increases likelihood that it'll become a habit.

"many innovations fail because consumers overvalue the old and companies overvalue the new" - John Gourville "must be 9 x better"

consumers value you more if you show them competitive price information

Measure habit forming potential with:

frequency (how often behavior occurs)
Perceived Utility (in users' minds)

"a habit is when not doing an action causes pain" -Nir Eyal (pg 34)

Chapter 2: Trigger

Habits aren't created, they're built upon
More choices is bad. requires evaluation. Reducing the thinking required to take the next action increases it's likelihood of occurring unconsciously

Types of External Triggers

Paid triggers ---- best used for new users, not sustainable for most models.
Earned Triggers ----Ex. Press mentions, Viral videos, features
RelationshipTriggers ---- Someone telling someone else
Owned triggers ---- Ex. subbed to Newsletter, app notifications anything that owns a share of your attention

Types of Internal Triggers

When a product is tightly coupled w/ a thought, an emotion, or a pre-existing routine, it leverages an internal trigger.
particularly negative emotions: bored, lonely, frustrated, confused
achieving this is the gold standard in consumer tech
New habits are sparked by external triggers but associations w/internal triggers are what keep users hooked

Building for triggers

"Ultimate goal at habit forming product is to solve the users pain by creating an association so that the user identifies the product as the source of relief"

Identify pain point in emotional terms do this by writing user narratives, personas, empathy maps, and asking "5 why's"

Chapter 3: Action

Fogg Behavior Model (B= MAT) (Behavior = motivation x action x trigger)
3 ingredients required to initiate behavior

User must have sufficient motivation
User must have ability to complete desired action
Trigger must be present to activate behavior

Fogg's 6 elements of simplicity (factors that influence a task's difficulty)

Time - How long it takes to complete an action
Money -the fiscal cost of taking action.
Physical effort- amount of labor involved
Brain cycles- level of mental effort and focus required
Social Deviance - How accepted action is by others
Non-routine- how much action matches/disrupts current routines

Fundamental steps of innovation (from Something Really New by Denis Hauptly)

1st: Understand reason people use a product
2nd: Lay out the steps it takes for them to get the job done
3rd: Once understood from inception to completion start removing steps until the most simple process is reached.

"Take a human desire, preferably one that's been around for a really long time... identify that desire then use modern technology to take out steps.'' - Evan Williams

4 Brain Biases that increase user motivation **

1. Scarcity effect

the appearance of scarcity increases user perception of value if a product starts off as scarce then becomes abundant; the perceived value of the product goes down

2. The Framing Effect

The mind takes shortcuts informed by our surroundings to make quick, sometimes erroneous judgement.
The perceived value of a product is heavily influenced by how it's framed. Ex. location, presentation, price
In a study done to see if price had any influence on wine taste they presented users w/samples of wine & told then the price ranged from $5-90. They measured their pleasure sensors in the brain w/an fMRI while they told them the price. The higher priced wines spiked higher pleasure. However all of the samples were the same wine.

3. The Anchoring Effect

people often anchor to ONE piece of info when making a decision. Ex. on sale vs. not on sale

4. The Endowed Progress Effect

A phenomenon that increases motivation as users believe they are nearing a goal
Ex. LinkedIn using a" profile strength" born to motivate users to provide more information.
Always start users out w/ progress already made.

*These 4 effects are just a few examples of cognitive heuristics. Resource for more is Mental Notes tool by Stephen Anderson (Deck of 50 cards w/different heuristic on each card).

Chapter 4: Variable Rewards

"What draws us to act is not the sensation from receiving the reward but rather the need to alleviate the craving for that reward."

to hold human attention, products must have an ongoing degree of novelty. (ie. variability)
Adding variability increases the # of times user completes desired action.
B. F. Skinner 1950's pigeon experiment *

3 types of variable rewards

1. Rewards of the tribe (social rewards) -

Our brains are adapted to seek rewards that make us feel accepted, attractive, important & included
Utilize "social learning theory" (Albert Bandura) when we see someone else (especially someone like us or a role model) getting rewarded then we feel the need to emulate their actions.
Examples: FB using likes, Stack overflow rewarding points for valuable answers gives users recognition in a community they care about
seems as tho the pattern is user-to-user and whatever one user is giving another user needs to add up to show validation and rank

2. Rewards of the Hunt

The need to acquire physical objects, such as food & other supplies that aid our survival, is part of Our brains operating system.

Examples:

Gambling mixes variable rewards in for an endless pursuit of a jackpot
Social users scroll on an endless feed to search for useful or exciting information. Not every post is useful/exciting and that creates variable rewards.
Pinterest boards are built so at the bottom some images appear cut or out of view. barely visible but can be easily revealed if they continue scrolling. Endless.

3. Rewards of Self

-fueled by intrinsic motivation. Self-determination theory espouses that peopledesire to gain a sense of competency.Examples:

certain schooling & pursuit for certificates
Video Games and the neverending journey of "leveling-up" to get new items or badges that show your level of competency/mastery
Email and the constant pursuit of achieving "inbox zero"

Important considerations for designing variable reward systems

The phrase "But you are free to accept or refuse" placed at the end of a request double the likely hood of people saying yes. (note 24)
Our ability to choose needs to be reaffirmed.
The phrase "but you are free" disarms our instinctive rejection at being told what to do

"companies that successfully change behaviors present users w/an option between their old way and a new, more convenient way to fill existing needs"

An element of mystery is an important component of user interest
Experiences w/finite variability become less engaging b/c they eventually become predictable

Chapter 5: Investment

"the more users invest time & value into something, the more they value it."

We irrationally over value our efforts
We try to be consistent w/our past behavior w/o realizing it.
Users should adopt a very tiny investment/habit that builds up.

cognitive dissonance - changing preferences to justify, validate, or fit in. How we rationalize things to make us feel better.

Ex. our bodies are built not to like beer or spicy food but we learn to like it.
Asking users to do an investment comes AFTER users have received variable rewards *
Value, Value, Value, investment, repeat.
w/each investment they make the product needs to become better and more personalized for them. In this case, investment should be stored value

Examples of stored value:

Content ---- playlists on Spotify ,pictures on profile. The collection of memories & experiences grows over time and becomes more valuable.
Data ----- Ex. LinkedIn users load all of their resume data and experience on there. Mint aggregating all of your financial data in one place.
Followers ---- If you build an audience on 1 platform that has value stored in it.
Reputation ----- If you're a really high level in COD. If you have 500 ''5star" ratings on Airbnb.
Skill ----- If you learn Adobe photoshop you have skill stored in that platform. less likely to switch to another model.

Loading the next trigger

users setup future trigger during investment stage

Chapter 8: Habit Testing & where to look for habit forming technology

Habit Testing: Lean Startup Methodology for habits

Step 1: Identify
- Who are the product's habitual users? How often "should" they use?

Step 2: Codify

-Once at least 5% of users are habitual, codify the habit path they took while using your product.

Step 3: Modify
-Modify on boarding process to follow the same habit path that hooked the habitual users.

Discovering habit-forming opportunities

Always solve problems that you have first, don't try & guess at others problems. Ask yourself "why you do or don't do certain things, can it be made easier or more rewarding?"

Enabling Technologies

tech waves come every-10 years
each won follows a 3 phase pattern

Advances in infrastructure
Enabling tech/platforms create the basis for new applications.
waves crest/subside to make room for next

"whenever new tech makes behavior easier, new possibilities are born"

Deliverables for building your own product

*(Summary of the "Do this now" sections at the end of each chapter)*

Chapter 1:The Habit Zone

What habits does your business model require?
What problems are users turning to your product to solve?
How do users currently solve that problem & why does it need a solution? How frequently do you expect users to engage w/your product?
What user behavior do you want to make into a habit?

Chapter 2: Trigger