Hooked: How To Build Habit-Forming Products — Book Notes
What This Book Is About:
This book explains the Hook Model: a four-step process embedded into the products of many successful companies to subtly encourage customer behavior.
Hooked is not abstract theory, but a how-to guide for building better products. Hooked is written for product managers, designers, marketers, start-up founders, and anyone who seeks to understand how products influence our behavior.
Chapter 1: The Habit Zone
- Ingrained habits are behaviours done with little or no conscious thought and they guide nearly half of our daily actions.
- Habits are one of the ways the brain learns complex behaviours.
- Neuroscientists believe that habits give us the ability to focus our attention on other things by storing automatic responses in the basal ganglia, an area of the brain associated with involuntary actions.
- Habits form when the brain takes a shortcut and stops actively deliberating over what to do next. The brain quickly learns to codify behaviours that provide a solution to whatever situation it encounters.
Why Habits Are Good For Business
1. Increase Customer Lifetime Value
- Customer Lifetime Value (CLV): 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.
2. Provide Pricing Flexibility
- As customers form routines around a product, they come to depend on it and become less sensitive to price.
- Habits give companies greater flexibility to increase prices.
3. Supercharge Growth
- Users who continuously find value in a product are more likely to tell their friends about it.
- Frequent usage creates more opportunities to encourage people to invite their friends, broadcast content and share through word-of-mouth.
- Hooked users become brand evangelists, bringing in new users at little or no cost.
- Products with higher user engagement also have the potential to grow faster than their rivals.
4. Sharpen Competitive Edge
- User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies.
- A classic paper by John Gourville, a professor of marketing at Harvard Business School claims that for new market entrants to stand a chance, they can’t just be better, they must be nine times better.
- The high bar comes about because old habits die hard and new products and services need to offer dramatic improvements to shake users out of old routines.
- Products that require a high degree of behaviour change are doomed to fail even if the benefits of using the new product are clear and substantial.
In The Habit Zone
- A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency (how often the behaviour occurs) and perceived utility (how useful and rewarding the behaviour is in the user’s mind over alternative solutions.)
- A behaviour that occurs with enough frequency and perceived utility enters The Habit Zone, helping to make it a default behaviour.
- If either of these factors falls short and the behaviour lies below the threshold, it is less likely that the desired behaviour will become a habit.
- Some behaviours will never become habits because they do not occur frequently enough.
- On the other hand, even a behaviour that provides minimal perceived benefit can become a habit simply because it occurs frequently.
Vitamins Versus Painkillers
- One aspect is common to all successful innovations = they solve problems
- Investors want to invest in painkillers — as they 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.
- What about social media? Many people would say they are selling vitamins as their users are not doing anything particularly important than perhaps seeking a quick boost of social validation.
- However, consider this idea: a habit is when not doing an action causes a bit of pain.
- Habit-forming technologies are both vitamins and painkillers.
- They are at first offering nice-to-have vitamins, but once the habit is established, they provide an ongoing pain remedy.
Do This Now
If you are building a habit-forming product, write down the answers to these questions:
- What habit does your business model require?
- What problem are users turning to your product to solve?
- How do users currently solve that problem and why does it need a solution?
- How frequently do you expect users to engage with your product?
- What user behaviour do you want to make into a habit?
Chapter 2: Trigger
- New habits need a foundation upon which to build. Triggers provide the basis for sustained behaviour change.
- A trigger is the actuator of behaviour.
- It comes in two types: external and internal.
- Habit-forming technologies start changing behaviour by first cueing users with a call-to-action.
- External triggers are embedded with information, which tells the user what to do next.
- An external trigger communicates the next action the user should take.
- Often, the desired action is made explicitly clear.
- An external trigger online may take the form of a prominent button, etc.
Types of External Triggers
1. Paid Triggers
- E.g advertising, search engine marketing and other paid channels.
- Effective but costly ways to keep users coming back.
- Habit-forming companies tend not to rely on paid triggers for very long, if at all.
- Because paying for reengagement is unsustainable for most business models, companies generally use paid triggers to acquire new users and then leverage other triggers to bring them back.
2. Earned Triggers
- They are free in that they cannot be bought directly, but often require investment in the form of time spent on public and media relations.
- E.g favourable press mentions, featured app store placements, viral videos etc.
3. Relationship Triggers
- One person telling others about a product or service can be a highly effective external trigger for action.
- Proper use of relationship triggers requires building an engaged user base that is enthusiastic about sharing the benefits of the product with others.
4. Owned Triggers
- Owned triggers consume a piece of real estate in the user’s environment.
- They consistently show up in daily life and it is ultimately up to the user to opt-in to allow these triggers to appear.
- E.g app icon, email newsletter, app notification etc.
- As long as the user agrees to receive a trigger, the company that sets the trigger owns a share of the user’s attention.
- While paid, earned and relationship triggers drive new user acquisition, owned triggers prompt repeat engagement until a habit is formed.
- Without owned triggers and users’ tacit permission to enter their attentional space, it is difficult to cue users frequently enough to change their behaviour.
- When a product becomes tightly coupled with a thought, an emotion or a pre-existing routine, it leverages an internal trigger.
- You can’t see, touch or hear an internal trigger.
- Internal triggers manifest automatically in your mind. Connecting internal triggers with a product is the brass ring of consumer technology.
- 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.
- Positive emotions can also serve as internal triggers, and may even be triggered themselves by a need to satisfy something that is bothering us. The desire to be entertained can be thought of as the need to satiate boredom. A need to share good news can also be thought of as an attempt to find and maintain social connections.
- Users who find a product that alleviates their pain will form strong, positive associations with the product over time.
- After continued use, bonds begin to form between the product and the user who need it satisfies. Gradually, these bonds cement into a habit as users turn to your product when experiencing certain internal triggers.
- Once we’re hooked, using these products does not always require an explicit call-to-action. Instead, they rely upon our automatic responses to feelings that precipitate the desired behaviour.
- Once a technology has created an association in users’ minds that the product is the solution of choice, they return on their own, no longer needing prompts from external triggers.
- The association between an internal trigger and the product is not formed overnight. It can take weeks or months of frequent usage for internal triggers to latch onto cues.
Building For Triggers
- Products that successfully create habits soothe the user’s pain by laying claim to a particular feeling.
- To do so, product designers must know their user’s internal triggers — that is, the pain they seek to solve.
- It requires designers to dig deeper to understand how their users feel.
- 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 or service as the source of relief.
- The company must first identify the particular frustration or pain point in emotional terms, rather than product features.
- 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 users’ problems.
- A clear description of users — their desires, emotions, the context with which they use the product, is paramount to building the right solution.
- One method is to try asking the question “Why?” as many times as it takes to get to an emotion. Usually this happens on the fifth why.
- When it comes to figuring out why people use habit-forming products, internal triggers are the root cause, and “Why?” is a question that can help drill right to the core.
Do This Now
- Who is your product’s users?
- What is the user doing right before your intended habit?
- Come up with three internal triggers that could cue your user to action. Refer to the 5 Whys Method.
- Which internal trigger does your user experience most frequently?
- Finish this brief narrative using the most frequent internal trigger and the habit you are designing: “Every time the user (internal trigger), he/she (first action of intended habit).”
- Refer back to the question about what the user is doing right before the first action of the habit. What might be places and times to send an external trigger?
- How can you couple an external trigger as closely as possible to when the user’s internal trigger fires?
- Think of at least three conventional ways to trigger your user with current technology. Stretch yourself to come up with at least three crazy or currently impossible ideas for ways to trigger your user.
Chapter 3: Action
- Is there a formula for behaviour? Can a product designer influencer users to act?
- Fogg Behaviour Model -> B = MAT, where B = behaviour, M = motivation, A = ability, T = trigger
- If any component of this formula is missing or inadequate, the user will not cross the “Action Line” and the behaviour will not occur.
- Example: your mobile phone rang but you didn’t answer.
- If your phone was buried in a bag and difficult to reach = ability was limited.
- If you thought the caller was a telemarketer = lack of motivation
- Ringer on phone silenced = no trigger
- The level of desire to take that action or the “energy for action”.
- 3 Core Motivators:
- Seek pleasure and avoid pain
- Seek hope and avoid fear
- Seek social acceptance and avoid rejection
- Ability of the user to take action easily or capacity to do a particular behaviour.
- Any technology or product that significantly reduces the steps to complete a task will enjoy high adoption rates by the people it assists.
- Easier = better
Elements of Simplicity
- Factors that influence a task’s difficulty
1. Time: how long it takes to complete an action
2. Money: the fiscal cost of taking an action
3. Physical Effort: the amount of labour involved in taking the action
4. Brain Cycles: the level of mental effort and focus required to take an action
5. Social Deviance: how accepted the behaviour is by others.
6. Non-routine: how much the action matches or disrupts existing routines
- Increasing motivation is expensive and time consuming.
- It is much easier to make your product so simple that users already know how to use it.
Heuristics and Perception
- Heuristics — mental shortcuts we take to make decisions and form opinions.
1. Scarcity Effect
- Experiment 1: one jar held 10 cookies and another contained just 2. Which cookies would people value more?
- Although the cookies and jars were identical, participants valued the ones in the near-empty jar more highly.
- Experiment 2: Participants were given jars with either 2 cookies or 10. The people in the group with 10 cookies suddenly had 8 taken away. Conversely, those with 2 had 8 new ones added. How would these changes affect the way participants valued the cookies?
- The group left with only 2 cookies rated them to be more valuable, while those experiencing sudden abundance valued the cookies less.
2. Framing Effect
- World-class violinist Joshua Bell decided to play a free impromptu concert in a Washington DC subway station. Bell regularly sells out venues like Carnegie Hall for hundreds of dollars per ticket, but when placed in the context of the DC subway, his music fell upon deaf ears.
- Perception can form a personal reality based on how a product is framed, even when there is little relationship with objective quantity.
3. Anchoring Effect
- People often anchor to one piece of information when making a decision.
4. Endowed Progress Effect
- What happens if retailers handed customers punch cards with punches already given? Would people be more likely to take action?
- The answer is yes.
- Endowed Progress Effect is the phenomenon that increases motivation as people believe they are nearing a goal.
Do This Now
- Walk through the path your users would take to use your product or service, beginning from the time they feel their internal trigger to the point they receive their expected outcome. How many steps does it take before users obtain the reward they came for? How does this process compare with the simplicity of some of the examples described in this chapter? How does it compare with competing products and services?
- Which resources are limiting your users’ ability to accomplish the tasks that will become habits?
- Brainstorm three testable ways to make intended tasks easier to complete.
- Consider how you might apply heuristics to make habit-forming actions more likely.
Chapter 4: Variable Reward
- To keep users engaged, products need to deliver on their promises.
- You reward your users by solving a problem, reinforcing their motivation for the action taken in the previous phase.
- There is a part of the brain (the nucleus accumbens) that is the pleasure center of the brain.
- Things that feel good activate this particular neural region.
- We act not because of the sensation we receive from the reward, but the need to alleviate the cravings for that reward.
- To hold our attention, products must have an ongoing degree of novelty.
- Once we understand causal relationships, we retain that information in memory. Our habits are simply the brain’s ability to quickly retrieve the appropriate behavioural response to a routine or process we have already learned.
- When something breaks the cause-and-effect pattern we’ve come to expect, we suddenly become aware of it again.
- Novelty sparks our interest and makes us pay attention.
Three Types of Variable Rewards
1. Rewards of the Tribe
- We are a species that depends on one another. Rewards of the tribe are driven by our connectedness with other people.
- Our brains are adapted to seek rewards that make us feel accepted, attractive, important and included.
- Many institutions and industries are built around the need for social reinforcement.
- Sites that leverage tribal rewards benefit from “social learning theory” — people who observe someone being rewarded for a particular behaviour are more likely to alter their own beliefs and subsequent actions.
2. Rewards of the Hunt
- The need to acquire physical objects, such as food and other supplies that aid our survival is part of our brain’s operating system.
- Where we once hunted for food, today we hunt for other stuff, like information.
3. Rewards of the Self
- Fueled by intrinsic motivation. People desire, among other things, to gain a sense of competency.
- We are driven to conquer obstacles, even if just for the satisfaction of doing so.
Important Considerations for Designing Reward Systems
- Only by understanding what truly matters to users can a company correctly match the right variable reward to their intended behaviour.
- Variable rewards are not magic fairy dust that a product designer can sprinkle onto a product to make it instantly more attractive. Rewards must fit into the narrative of why the product is used and align with the user’s internal triggers and motivation.
- When our autonomy is threatened, we feel constrained by our lack of choices and often rebel against doing a new behaviour. Psychologists call this reactance. Maintaining a sense of user autonomy is a requirement for repeat engagement.
- Companies that successfully change behaviours present users with an implicit choice between their old way of doing things and a new, more convenient way to fulfill existing needs.
- Experiences with finite variability become less engaging because they eventually become predictable.
- Games like World of Warcraft offers infinite variability because it is played with other teams, and the hard-to-predict behaviour of others keep the game interesting.
Do This Now
- Speak with 5 of your customers in an open-ended interview to identify what they find enjoyable or encouraging about using your product. Are there any moments of delight or surprise? Is there anything they find particularly satisfying about using the product?
- Review the steps your customer takes to use your product or service habitually. What outcome (reward) alleviates the user’s pain? Is the reward fulfilling, yet leaves the user wanting more?
- Brainstorm three ways your product might heighten users’ search for variable rewards using:
- Rewards of the tribe
- Rewards of the hunt
- Rewards of the self
Chapter 5: Investment
- The second most important factor in habit formation (besides frequency) is a change in the participant’s attitude about the behaviour.
- In order for a change in attitude to occur, there must be a change in how users perceive the behaviour.
- A psychological phenomenon known as the escalation of commitment has been shown to make our brains do all sorts of funny things.
- The more users invest time and effort into a product or service, the more they value it.
- We irrationally value our effort — businesses that leverage user effort confer higher value to their products simply because users have put work into them.
- We also seek to be consistent with our past behaviours.
- We avoid cognitive dissonance (the psychological pain of two conflicting ideas)
- These tendencies of ours lead to a mental process known as rationalization, in which we change our attitudes and beliefs to adapt psychologically.
- Rationalization helps us give reasons for our behaviours, even when those reasons might have been designed by others.
- In the investment phase, asking users to do a bit of work comes after users have received variable rewards, not before.
- The big idea behind the investment phase is to leverage the user’s understanding that the service will get better with use and personal investment.
- The stored value users put into the product increases the likelihood they will use it again in the future and comes in a variety of forms.
- Every time users of Apple’s iTunes add a song to their collection, they are strengthening ties to the service. The songs on a playlist are an example of how content increases the value of a service.
- Content can also be created by a service’s users, e.g Facebook.
- Sometimes, users invest in a service by either actively or passively adding their own personal data, e.g LinkedIn.
- The more information users invested in the site, the more committed they became to it.
- Nobody wants to abandon a platform in which they have spent effort and time building and curating an audience.
- E.g eBay, Airbnb, Yelp
- Investing time and effort into learning to use a product, e.g Photoshop
- The investment phase is not a carte blanche tool for asking users to do onerous tasks.
- In order to achieve the intended behaviour in the investment phase, the product designer must consider whether users have sufficient motivation and ability to engage in the intended behaviour.
Loading The Next Trigger
- Habit-forming technologies leverage the user’s past behaviour to initiate an external trigger in the future.
- Users set future triggers during the investment phase, providing companies with an opportunity to reengage the user.
Do This Now
- Review your flow. What “bit of work” are your users doing to increase their likelihood of returning?
- Brainstorm three ways to add small investments into your product to:
- Load the next trigger
- Store value as data, content, followers, reputation and skill
- Identify how long it takes for a “loaded trigger” to reengage your users. How can you reduce the delay to shorten time spent cycling through the Hook?
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