Heuristics: The Most Overlooked Source of Decision-Making & Growth Hacking

There are 3 main types of heuristics. They are the bread and butter of most decisions we make. Here’s how to use heuristics in your favor when building products.

7:15am.

My horribly obnoxious alarm yells at me. My boyfriend’s cat b*tch slaps me in the face. I open my eyes halfway, squint at the sunlight bleeding through the blinds, lethargically stretch my arms out like an exhilarated sloth, and haphazardly feel the nightstand for my glasses.

But no, my glasses escape my grasp and fall on the floor. And after knocking over 5 more things, I finally reach my phone.

Then, all hope is lost. I succumb to the vicissitudes of social media, opening Facebook while holding the phone about 3 inches from my face with one eye open (because if both eyes were open, I’d literally see two of everything). I tap the notifications tab, then go back to the newsfeed and scroll through a Happy Meal full of HuffPo links, BuzzFeed listicles, former high school classmates’ engagement pictures, and TONS of clickbait. Then, the process inevitably repeats itself on Instagram.

This series of actions begs the question — why do I even do this? After all these years, am I even aware of what I’m doing, or is this all just instinct?

The most successful companies in the world didn’t just code pretty apps, but they are responsible for what Nir Eyal and Ryan Hoover, writers of “Hooked,” call “Habit-forming products.” If you’re an entrepreneur, this is a MUST-READ. Forgo the Seamless order today and get your hands on this book instead.

Get the book here

Facebook, Instagram, and Twitter essentially translated the fundamental human need for social acceptance into something tangible and, more importantly, incredibly easy to fulfill.

With every tap, from opening Facebook to seeing that red circular number float above my notifications tab, I get a tiny dopamine rush.

And herein lies the magic of heuristics.

What are heuristics? Simply put, heuristics is a term in psychology used to describe the mental shortcuts and quick associations we make to drive easier decision-making, no matter how small or large. Heuristics come in 3 forms:

  1. Availability Heuristic: the ease at which a particular idea can be brought to mind. When you estimate the likelihood or frequency of an event, you are employing the availability heuristic. For example, in light of the recent Powerball Lotto craze, to someone buying a ticket, the well-publicised, jubilant winners are more available than the millions of people who have won nothing.

2. Representativeness Heuristic: making associations about we see based on our pre-conceived notions of it. For example, if your college professor looked and sounded like Donald Trump, you may be predisposed to assuming that he’s a trainwreck of a human being, when in fact he’s actually super nice and fun.

3. Anchoring and Adjustment Heuristic: starting from a readily available statistic (the ‘anchor’) and making estimates based on it. For example, many retail stores like Macy’s might mark a $200 Ralph Lauren cashmere sweater down 40% to $120, yet sell a competing brand of similar quality at a $95 full price. By using the 40% discount as an anchor, you would feel more inclined to buy the $120 sweater because it’s 40% off, even though the $95 is technically cheaper (though not marked down).

How do this all translate to growth hacking for companies?

Accounting for these heuristics is integral to building habit-forming products that, as “Hooked” describes in 4 steps, ultimately form naturally recurring internal triggers in a user’s mind.

We’ll dive into each of these steps in more detail in my next post, but for now, if you made it this far, you deserve a cashmere sweater. Bye!

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