Hooked: How to Build Habit-Forming Products

by Nir Eyal

Companies increasingly find that their economic value is a function of the strength of the habits they create.

Companies leverage two basic pulleys of human behavior to increase the likelihood of an action occurring: the ease of performing an action and the psychological motivation to do it.10

Variable rewards are one of the most powerful tools companies implement to hook users;

Introducing variability multiplies the effect, creating a focused state, which suppresses the areas of the brain associated with judgment and reason while activating the parts associated with wanting and desire.

The exciting juxtaposition of relevant and irrelevant, tantalizing and plain, beautiful and common, sets her brain’s dopamine system aflutter with the promise of reward.

The investment phase increases the odds that the user will make another pass through the Hook cycle in the future. The investment occurs when the user puts something into the product of service such as time, data, effort, social capital, or money.

The Hook Model has four phases: trigger, action, variable reward, and investment.

Habits are one of the ways the brain learns complex behaviors. Neuroscientists believe 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.

Caching with less than perfect retrieval

Some products have a very high CLTV. For example, credit card customers tend to stay loyal for a very long time and are worth a bundle. Hence, credit card companies are willing to spend a considerable amount of money acquiring new customers. This explains why you receive so many promotional offers, ranging from free gifts to airline bonus miles, to entice you to add another card or upgrade your current one.

Hooked users become brand evangelists—megaphones for your company, bringing in new users at little or no cost.

Having a greater proportion of users daily returning to a service dramatically decreases Viral Cycle Time for two reasons: First, daily users initiate loops more often (think tagging a friend in a Facebook photo); second, more daily active users means more people to respond and react to each invitation. The cycle not only perpetuates the process—with higher and higher user engagement, it accelerates it.

Exponential growth. I need to find a good way to boost VCT.

Not only does Amazon make money from the ads it runs from competing businesses, it also utilizes other companies’ marketing dollars to form a habit in the shopper’s mind. Amazon seeks to become the solution to a frequently occurring pain point—the customer’s desire to find the items they want.

“Are you building a vitamin or painkiller?”

A habit is when not doing an action causes a bit of pain.

Habit-forming products often start as nice-to-haves (vitamins) but once the habit is formed, they become must-haves (painkillers).

More choices require the user to evaluate multiple options. Too many choices or irrelevant options can cause hesitation, confusion, or worse—abandonment.4 Reducing the thinking required to take the next action increases the likelihood of the desired behavior occurring unconsciously.

Relationship triggers can create the viral hyper-growth entrepreneurs and investors lust

Without owned triggers and users’ tacit permission to enter their attentional space, it is difficult to cue users frequently enough to change their behavior.

When a product becomes tightly coupled with a thought, an emotion, or a preexisting routine, it leverages an internal trigger.

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 appearance of scarcity affected their perception of value.

The mind takes shortcuts informed by our surroundings to make quick and sometimes erroneous judgments.

Little did the study participants realize that they were tasting the same wine each time. This study demonstrates how perception can form a personal reality based on how a product is framed, even when there is little relationship with objective quality.

People often anchor to one piece of information when making a decision.

The study revealed that 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.

Why searching for it often is more fun.

Researchers believe laughter may in fact be a release valve when we experience the discomfort and excitement of uncertainty, but without fear of harm.3

Why jokes are funny; they do the same thing.

Without variability we are like children in that once we figure out what will happen next, we become less excited by the experience.

Skinner’s pigeons tell us a great deal about what helps drive our own behaviors. More recent experiments reveal that variability increases activity in the nucleus accumbens and spikes levels of the neurotransmitter dopamine, driving our hungry search for rewards.

Video games.

During the chase, the runner is driven by the pursuit itself; this same mental hardwiring also provides clues into the source of our insatiable desires today. The dogged determination that keeps San hunters chasing kudu is the same mechanism that keeps us wanting and buying.

The need to acquire physical objects, such as food and other supplies that aid our survival, is part of our brain’s operating system.

The rewards of the self are fueled by “intrinsic motivation” as highlighted by the work of Edward Deci and Richard Ryan. Their self-determination theory espouses that people desire, among other things, to gain a sense of competency. Adding an element of mystery to this goal makes the pursuit all the more enticing.

placed at the end of a request, are a highly effective way to gain compliance, doubling the likelihood of people saying yes.24 The magic words the researchers discovered? The phrase “But you are free to accept or refuse.”

Companies that successfully change behaviors 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.

The more users invest time and effort into a product or service, the more they value it. In fact, there is ample evidence to suggest that our labor leads to love.

In other words, those who invested labor associated greater value with their paper creations simply because they had worked on them. Ariely calls this the IKEA effect.

Little investments, such as placing a tiny sign in a window, can lead to big changes in future behaviors.

Here, users are prompted to put something of value into the system, which increases the likelihood of their using the product and of successive passes through the Hook cycle.

The results showed that reciprocation is not just a characteristic expressed between people, but also a trait observed when humans interact with machines.

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).

1. What do users really want? What pain is your product relieving? (Internal trigger) 2. What brings users to your service? (External trigger) 3. What is the simplest action users take in anticipation of reward, and how can you simplify your product to make this action easier? (Action) 4. Are users fulfilled by the reward yet left wanting more? (Variable reward) 5. What “bit of work” do users invest in your product? Does it load the next trigger and store value to improve the product with use? (Investment)