Hooked: How to Build Habit-Forming Products

by Nir Eyal

Punch cards are often used by retailers to encourage repeat business. With each purchase customers get closer to receiving a free product or service. These cards are typically awarded empty; in effect customers start at 0 percent complete. What would happen if retailers handed customers punch cards with punches already given? Would people be more likely to take action if they had already made some progress? An experiment sought to answer this very question.11 Two groups of customers were given punch cards awarding a free car wash once the cards were fully punched. One group was given a blank punch card with eight squares; the other was given a punch card with ten squares that came with two free punches. Both groups still had to purchase eight car washes to receive a free wash; however, the second group of customers—those that were given two free punches—had a staggering 82 percent higher completion rate.