V2 how to build habit forming products by ar
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The document discusses how to build habit-forming products using a "Hooked Model". The model involves 4 steps: 1) Triggers that prompt action, 2) Actions that anticipate rewards, 3) Variable rewards that satisfy cravings but leave users wanting more, and 4) Investments that increase the likelihood of returning. Triggers can be external cues from the environment or internal cues from user emotions. Actions depend on user motivation and ability. Rewards activate the nucleus accumbens and keep users engaged through variability. Investments load the next trigger and improve the product with use. The model provides a framework to understand user behavior and design addictive products.
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V2 how to build habit forming products by ar
- 1. How to Build Habit-Forming Products? Warsaw Venture Café, 20th January 2022 Asif Rajani
- 2. Products can profoundly change our behavior
- 3. Habit: An impulse to do a behavior with little or no conscience thought
- 4. How to test the habit- forming potential of your product?
- 5. The importance of habits in business • Increased customer lifetime value (CLTV) – the amount of money that the company can make from customers before they move to competing offerings • More flexibility in raising prices or charging for premium services • Supercharged growth by word-of-mouth greater competitive edge, because the competition finds it difficult
- 6. Hooked Model • Based on hooks • The hook is an experience designed to connect the user’s problems to your product … with enough frequency to form a habit • Hooks are a series of experiences that can together modify user behavior and encourage formation of new habits
- 7. Hooked Model
- 8. 1. Trigger
- 9. External triggers • These are bits of information from users’ surroundings that prompt them to perform an action. • Paid triggers – channels like advertising that capture attention, but are too expensive for the long run • Earned triggers – continued media presence, like viral video and press mentions, which can be difficult to sustain for any product • Relationship triggers – come from engaged users who enthusiastically share information with other potential users • Owned triggers – most useful, as these employ tacit permission from users to send triggers like app updates and periodic notifications into their personal space
- 10. Internal Trigger Internal triggers are driven by users’ emotions and associations stored in their memory.
- 11. Internal triggers • Indecisive • Lonesome • Powerless • Tense • Dissatisfied • Confused • Inferior • Fatigued • Discouraged • Bored • Fear of Loss
- 14. When we are bored …
- 15. How do you know your customer’s internal trigger? • Cohort analysis • Check what the user’s are doing to solve their problem today • 5 Why’s
- 16. 2. Action
- 17. Action: The simplest behavior in anticipation of a reward
- 22. Motivation: “The energy for action” Edward Deci
- 23. 6 factors to increase motivation • Seeking pleasure • Seeking hope • Seeking acceptance • Avoiding pain • Avoiding fear • Avoiding rejection
- 24. Ability: The capacity to do a particular action.
- 25. What factors moderate the ability of people? • The time it takes to use it • The money it costs • The degree of physical effort involved • The level of mental labor needed • The product’s social acceptability • The degree to which it matches or disrupts current routines
- 26. Examples
- 27. On Heuristics and Perception • The scarcity effect – the scarcer a product is, the higher is its perceived value, e.g. the ‘limited stock’ tag on Amazon products ends up increasing sales for those products • The framing effect – context can alter the desirability of a product, e.g. the same wine is reported to be tastier if the price is increased • The endowed progress effect – in case of reward programs, the closer users feel they are to the goal the more motivated they become
- 28. On Heuristics and Perception (II) • The anchoring effect – one aspect of a product is given undue importance over other features
- 31. Nucleus Accumbens • Olds & Milner, 1945 • Is activated when we crave.
- 32. The stress of desire • Were Olds & Milner stimulating pleasure? • Not exactly. • They were stimulating the Stress of Desire • Knutson 2008: • “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.”
- 33. The unknown is fascinating • Variability causes us to focus and engage… and increases behavior • Nucleus Accumbens is stimulated by variability
- 34. Variable Rewards
- 35. Rewards of the Tribe • Empathetic joy, partnership, competition
- 36. Rewards of the Hunt • Hunt for variable material/information rewards
- 37. Rewards of the Self • Levelling-up reflects mastery and competency
- 38. Build variable rewards that satiate users itch but leave them wanting more
- 39. 4. Investment
- 40. 4. Investment • Increases the likelihood of the next pass through the hook in 2 ways: 1. Loading the next trigger 2. Investments store value, improving the product with use
- 41. What makes users commit to a product?
- 42. Stored Value
- 43. 5 questions to apply this model What external trigger gets the user to the product? What is the simplest behavior in anticipation of reward? Is the reward fulfilling, yet leaves the user wanting more? What investment is done to increase the likelihood of returning? What internal trigger is the product addressing?
- 44. Quick Case Study
- 47. The Morality of Manipulation This is akin to exploitation of the customer, with quick income the only guiding principle. Not using the product themselves can rob them of the insight needed to design a truly successful product. Their products are short-lived trends and doing well requires them to keep coming up with new ideas to hook users. They have a clear understanding of their customers’ needs from personal experience and, as a result, have the greatest chance of success.
Editor's Notes
- WC Swimmer – Phellps WC Investor – Warren Buffett WC Cook – you call Magda Gessler… If we want to become the best in business and change habits for the better.. Changed billions lives and generate billions of revenues… Partly because they mastered the art of creating habit-forming products.
- to make inroads, e.g. people continue to use the QWERTY keyboard despite better keyboards available But people are creatures of habits, and creating new ones requires them to forget certain old ones. This means that for new types of behavior to really become ingrained into our decision-making systems, they need to be reinforced again and again. The benefit is that once you have succeeded in turning your product into a habit, another competing product will find it tougher to displace your product, e.g. Google’s ubiquity and synonymity with Internet search has meant that products that are not particularly bad, like Bing, have failed to become as popular.
- Use the frequency-vs.-perceived utility plot. If the product falls in the Habit Zone, i.e. is used often and has a high enough utility compared to competing solutions, then using it can become default behavior for a consumer. In one of the two examples marked in the figure, a single search result on any engine other than Google is not noticeably poorer than what you would get on Google, but Google is used so frequently that it is the option most of us turn to. On the other hand, purchasing on Amazon is nowhere as frequent as much of our other online activity, but its perceived utility is higher because we know that every time we log on to Amazon, the likelihood of finding the product we are looking for is high and it is also going to be available at a competitive price. The position of a product on this chart is not static - many habit-forming products start off as vitamins, but with repeated use, turn into painkillers that satisfy the itch to use them. Vitamins are products that do not solve an obvious problem, but feel nice to have, while painkillers are products that cater to a very obvious need. Many products that are habits for us now because of their perceived utility to us might have been less important to begin with.
- But how do successful companies actually go about creating habit-forming products? Is this all chance, or is there a technique to it? This book covers some of the key aspects that any designer or seller of a habit-forming product would do well to keep in mind.
- Trigger – External or internal cues that prompt certain behavior Action – Use of the product, based on ease of use and motivation Variable Reward – The reason for product use, which keeps the user engaged Investment – A useful input from the user that commits him to go through the cycle again We will look at these four phases in greater detail in chapters after the next one, and also explore some ideas related to this whole field of user manipulation.
- Habits, much like pearls, need a foundation and layer upon layer (of continued behavior change) to be completely formed. Triggers are the cue or the foundation for this behavior change. Triggers can be of two types: external and internal.
- The information on what to do next is informed through an association in the user’s memory For a product to truly become a habit, its triggers need to move from the external forms to the internal. Internal triggers are driven by users’ emotions and associations stored in their memory. … and particularly negative emotions.
- Trying to rid oneself of negative emotions like boredom and loneliness are powerful triggers for using a particular product. As a product relieves these negative emotions repeatedly, our mind subconsciously begins to associate it with this relief. This gradually strengthens the bond with a product, resulting in the formation of a habit, e.g. our reliance on Facebook or Twitter for instant social connection. Designing a habit-forming product requires an understanding of the emotions that are tied to these internal triggers, as well as knowledge of how external triggers can be used effectively to urge a user to perform a certain action.
- Habits, much like pearls, need a foundation and layer upon layer (of continued behavior change) to be completely formed. Triggers are the cue or the foundation for this behavior change. Triggers can be of two types: external and internal.
- The Behavior Model developed by Dr. B.J. Fogg of Stanford University says that the user’s action depends on three prerequisites (B = MAT): M – sufficient motivation A – ability to perform a certain action T – a trigger to prompt the action Therefore, for a clear trigger to be effective, the user should be motivated enough and should be able to perform the action with minimal effect.
- Trying to rid oneself of negative emotions like boredom and loneliness are powerful triggers for using a particular product. As a product relieves these negative emotions repeatedly, our mind subconsciously begins to associate it with this relief. This gradually strengthens the bond with a product, resulting in the formation of a habit, e.g. our reliance on Facebook or Twitter for instant social connection. Designing a habit-forming product requires an understanding of the emotions that are tied to these internal triggers, as well as knowledge of how external triggers can be used effectively to urge a user to perform a certain action.
- Even when there is a successful trigger and a compelling enough motivation, a person needs to be able to perform an action. The easier it is to perform it, the greater is the likelihood of it becoming a habit, e.g. the boom in blogging in the 2000s after Blogger made it possible to open a blogging account within minutes or the ease of taking photos with an iPhone. The lower the time, money, physical effort or mental labor involved, or the more socially acceptable it is, or the least deviation it requires from a user’s existing routine, the easier it is for him to perform an action. Consequently, the greater is the likelihood of the product becoming a habit.
- Between motivation and ability, it is easier to target the latter. Design your products such that it reduces the effort involved for the user, instead of trying to build motivation levels. Both motivation and ability can also be increased using counter-intuitive methods called heuristics. These are mental shortcuts that all of us employ to make quick decisions. Examples include: The scarcity effect – the scarcer a product is, the higher is its perceived value, e.g. the ‘limited stock’ tag on Amazon products ends up increasing sales for those products The framing effect – context can alter the desirability of a product, e.g. the same wine is reported to be tastier if the price is increased The anchoring effect – one aspect of a product is given undue importance over other features, e.g. people end up buying more products of a brand that has a discount sticker on it, even if its quality and the effective cost might be no different than other competing products in the vicinity The endowed progress effect – in case of reward programs, the closer users feel they are to the goal the more motivated they become, e.g. the ‘Improve Your Profile Strength’ step in LinkedIn has a completion bar that starts off all users with part of the bar already filled, strengthening their belief that a full profile is not far away.
- Habits, much like pearls, need a foundation and layer upon layer (of continued behavior change) to be completely formed. Triggers are the cue or the foundation for this behavior change. Triggers can be of two types: external and internal.
- Activated when we crave Not pleasure Stress of desire Our reward system activates with anticipation… and calms when we get what we want That’s the itch we seek to scratch
- Variable rewards, and not just any rewards, make users come back to a product again and again by reinforcing the motivation. Finite variability can become boring after a while, while infinite variability sustains user interest. Thus, variable rewards should not only satisfy one or more user needs, but also keep them interested in engaging again (and again) with the product. There are three types of variable rewards: Rewards of the tribe – those that satisfy our social needs by making us feel more important and accepted, e.g. Likes, shares and comments on Facebook Rewards of the hunt – those that satisfy our basic survival instincts by helping us acquire things we consider important, like cash and information, e.g. the mix of mundane and relevant content on Twitter entices users to Rewards of the self – intrinsic value, not coming from others or cash/information
- But gamification, or the introduction of rewards, cannot be used blindly to drive user engagement. It is extremely important for product designers to figure out the kind of reward that will motivate their intended users, e.g. Mahalo, a Q&A forum gave monetary rewards to answerers, but bombed, while Quora, a similar service, only provides upvotes, and is very successful. It is also important to provide users with a sense of autonomy or choice – a reward when they feel constrained might not work. If they feel that they are being forced to adapt a certain behavior, they can rebel – a phenomenon known as reactance.
- habit-forming products is that they build an anticipation of future benefits in the mind of the user. Whatsapp: open invitation for an external trigger to be returned
- • There are three common tendencies that can lead to this commitment, all involving a process known as rationalization: › Our tendency to irrationally overvalue our work, e.g. IKEA products elicit an irrational following because users assemble the furniture themselves › Our tendency to seek consistency with past behavior – having made a small commitment eases the path to make bigger ones › Our tendency to avoid cognitive dissonance through reconciliation of conflicting ideas, e.g. people conditioning their bodies to like alcohol or spicy food because everyone else seems to derive pleasure from these
- Habits, much like pearls, need a foundation and layer upon layer (of continued behavior change) to be completely formed. Triggers are the cue or the foundation for this behavior change. Triggers can be of two types: external and internal.
- We live is time in which the majority of the people are being manipulated by some simple concepts we learned today. But … But the tools and knowledge we have, can also be use for the good.