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A 4-Step Process to Build Habit-Forming Products

by Greg Cargopoulos

A 4-Step Process to Build Habit-Forming Products

Research suggests that about half of our day is made up of habitual activity that requires little or no conscious thought. Some habits keep you healthy, like brushing your teeth, whereas others can be dangerous, like smoking cigarettes. These habits are feedback loops that become stronger over time—for better or worse.

Nir Eyal's book Hooked shows how companies build habit-forming products that link their products or services to these subconscious daily routines. By doing so, companies can evaluate potential business models, maximize the effectiveness of marketing campaigns, and build products and services that connect with users on a deeper level.

Let's take a high-level look at Nir Eyal's four-step process to build habit-forming products detailed in his book.

Companies that tap into the psychology of habits can link their products to their customers' daily routines.

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#1. Create a Trigger

Habit-forming products start with external triggers, such as an email or push notification, with a call to action. For example, an email from a brokerage might contain a button prompting a reader to place a trade. The most effective external triggers are a simple call to action that clearly and unambiguously shows the desired action.

There are a few types of external triggers:

  • Paid Triggers - Many businesses use ads to get users' attention and prompt them to act. While they're effective for gaining new users, they're not very cost-effective or scalable over time.

  • Earned Triggers - Earned triggers are free but require time and effort. For instance, a business may reach out to journalists regularly in the hopes of receiving a favorable press mention.

  • Relationship Triggers - One of the most influential external triggers is a recommendation from a friend. These kinds of relationship triggers are the cornerstones of viral growth.

  • Owned Triggers - Most businesses try to get users to opt-in to give them a share of their attention. For instance, a user might subscribe to a newsletter and spend every Monday morning reading it.

Over time, successful habit-forming products become tightly coupled with internal triggers, like thoughts or emotions. So, for example, you might grab your phone to scroll through social media when you feel stressed out and need to relax. Internal triggers can be positive or negative (or even neutral), depending on the product and user.

When developing triggers, ask yourself what users really want and what pain point you're solving for them. Then, ask what brings users to your product or service. If these questions sound familiar, that's because they closely follow UX research and design principles.

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#2. Prompt an Action

Actions are behaviors that users take in anticipation of a reward, such as clicking a button in an email. In addition to exposing users to a trigger, users must have the ability and motivation to take the action. While motivation is driven by factors like time, money, or effort, motivation is driven by emotions, like pleasure, hope, and social acceptance.

There are several ways to encourage actions:

  • Scarcity - The appearance of scarcity affects a user’s perception of value. For example, if something is only available for a limited time, users may feel more compelled to take action before time runs out.

  • Framing - The human mind takes shortcuts by looking at its surroundings to make quick decisions. For instance, a business might frame a product as a way to save time, reduce cost, or accomplish other goals, depending on the target audience.

  • Anchoring - Most people anchor to a single piece of information when deciding. The classic example is using multiple tiers on a pricing page. By anchoring users at a high price point, it’s easier to justify a mid-tier price as a “deal.”

  • Endowed Progress - Endowed progress makes users feel like they're close to achieving something. For example, a website with a form may show a progress bar to keep users engaged and likely to complete the entire thing.

It’s usually a good idea to focus on ability over motivation, since motivation is expensive and time-consuming. In other words, try to increase a product’s ease of use and find the most straightforward thing a user can do in anticipation of a reward.

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#3. Offer a Variable Reward

Variable rewards are the secret sauce to keeping users coming back. While dopamine surges in anticipation of a reward, introducing variability multiplies the effect and suppresses areas of the brain associated with judgment and reason. That's why it's more entertaining to spend an hour on a slot machine than work for an hour at a set wage.

There are three types of rewards:

  • Tribe - Social rewards fuel connectedness with other people. For example, receiving "likes" on a social media post releases dopamine because it indicates social acceptance.

  • Hunt - The act of searching for and finding something of value triggers dopamine releases. For example, you might scroll through social media and see a relevant and valuable tweet.

  • Self - Intrinsic rewards, like mastery, competence, and completion, also trigger dopamine release. For instance, many video games involve "leveling up" and scoring points.

The key to successful variable rewards is finding things that leave users fulfilled but still wanting more in the future. Of course, these rewards must also align with the user’s internal triggers and motivations while fitting in with the overall product narrative.

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#4. Encourage an Investment

Investment occurs when users put something into the product or service, such as time or effort. For example, they might invite friends to join a network or create content that builds up over time. Unlike variable rewards, investment involves the anticipation of rewards in the future while prompting users to come back and repeat the entire process.

Investments are powerful for a few reasons:

  • We tend to value things that we put time and effort into

  • We want to be consistent with our past behaviors

  • We adapt our preferences to avoid cognitive dissonance

Successful investment means finding something that users can put into your product or service to make it more valuable over time. Then, you can stage investments in a way that lets them start small and build up to more difficult investments over time.

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The Bottom Line

Successful products and services embed themselves into the lives of their users. For example, tax preparation software may send an email near tax season saying that tax season is coming up (trigger), encourage them to discover their refund amount (trigger, variable reward), and then get them to at least start putting in their information (investment).

At the core, Hooked is about understanding customers and what makes them tick. If you want a better understanding of your customers, Intent can help you conduct UX research and fine-tune your designs to minimize distraction and maximize motivation.

Contact us today!


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