Hooked: How to Build Habit-Forming Products

by Nir Eyal

fully one-third of Americans say they would rather give up sex than lose their cell phones.

It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later. It’s the urge you likely feel throughout your day but hardly notice.

define habits as “automatic behaviors triggered by situational cues”: things we do with little or no conscious thought.

The products and services we use habitually alter our everyday behavior, just as their designers intended.6 Our actions have been engineered.

Forming habits is imperative for the survival of many products. As infinite distractions compete for our attention, companies are learning to master novel tactics to stay relevant in users’ minds. Amassing millions of users is no longer good enough. Companies increasingly find that their economic value is a function of the strength of the habits they create. In order to win the loyalty of their users and create a product that’s regularly used, companies must learn not only what compels users to click but also what makes them tick. Although some companies are just waking up to this new reality, others are already cashing in. By mastering habit-forming product design, the companies profiled in this book make their goods indispensable.

Companies that form strong user habits enjoy several benefits to their bottom line. These companies attach their product to internal triggers. As a result, users show up without any external prompting.

Instead of relying on expensive marketing, habit-forming companies link their services to the users’ daily routines and emotions.7 A habit is at work when users feel a tad bored and instantly open Twitter. They feel a pang of loneliness and before rational thought occurs, they are scrolling through their Facebook feeds. A question comes to mind and before searching their brains, they query Google. The first-to-mind solution wins.

Today, small start-up teams can profoundly change behavior by guiding users through a series of experiences I call hooks. The more often users run through these hooks, the more likely they are to form habits.

Notable companies were making hundreds of millions of dollars selling virtual cows on digital farms while advertisers were spending huge sums of money to influence people to buy whatever they were peddling. I admit I didn’t get it at first and found myself standing at the water’s edge wondering, “How do they do it?” At the intersection of these two industries dependent on mind manipulation, I embarked upon a journey to learn how products change our actions and, at times, create compulsions.

Through consecutive Hook cycles, successful products reach their ultimate goal of unprompted user engagement, bringing users back repeatedly, without depending on costly advertising or aggressive messaging.

Hooks can be found in virtually any experience that burrows into our minds (and often our wallets).

A trigger is the actuator of behavior—the spark plug in the engine. Triggers come in two types: external and internal.8 Habit-forming products start by alerting users with external triggers like an e-mail, a Web site link, or the app icon on a phone.

the external trigger’s call to action (in marketing and advertising lingo) intrigues her and she clicks. By cycling through successive hooks, users begin to form associations with internal triggers, which attach to existing behaviors and emotions.

When users start to automatically cue their next behavior, the new habit becomes part of their everyday routine. Over time, Barbra associates Facebook with her need for social connection.

Following the trigger comes the action: the behavior done in anticipation of a reward.

This phase of the Hook, as described in chapter 3, draws upon the art and science of usability design to reveal how products drive specific user actions. 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.

What distinguishes the Hooked Model from a plain vanilla feedback loop is the Hook’s ability to create a craving. Feedback loops are all around us, but predictable ones don’t create desire.

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

levels of the neurotransmitter dopamine surge when the brain is expecting a reward.11 Although dopamine is often wrongly categorized as making us feel good, introducing variability does create a focused state, which suppresses the areas of the brain associated with judgment and reason while activating the parts associated with wanting and desire.

some people eventually lose their taste for certain experiences and how variability impacts their retention.

The last phase of the Hooked Model is where the user does a bit of work. The investment phase increases the odds that the user will make another pass through the 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. However, the investment phase isn’t about users opening up their wallets and moving on with their day. Rather, the investment implies an action that improves the service for the next go-around. Inviting friends, stating preferences, building virtual assets, and learning to use new features are all investments users make to improve their experience. These commitments can be leveraged to make the trigger more engaging, the action easier, and the reward more exciting with every pass through the Hooked Model.

As companies combine their increased connectivity to consumers, with the ability to collect, mine, and process customer data at faster speeds, we are faced with a future where everything becomes potentially more habit forming.

the world will get more addictive in the next 40 years than it did in the last 40.”

“If it can’t be used for evil, it’s not a superpower.” He’s right. And under this definition, building habit-forming products is indeed a superpower. If used irresponsibly, bad habits can quickly degenerate into mindless, zombielike addictions for some users.

Perhaps technology’s unstoppable progress—ever more pervasive and persuasive—has grabbed us in a fearful malaise at the thought of being involuntarily controlled.

products can do far more good than harm.

Choice architecture, a concept described by famed scholars Thaler, Sunstein, and Balz in their same-titled scholarly paper, offers techniques to influence people’s decisions and affect behavioral outcomes. Ultimately, though, the practice should be “used to help nudge people to make better choices (as judged by themselves).”

the trinity of access, data, and speed presents unprecedented opportunities to create positive habits.

Hooks connect the user’s problem with a company’s solution frequently enough to form a habit.

Habits are defined as “behaviors done with little or no conscious thought.” The convergence of access, data, and speed is making the world a more habit-forming place. Businesses that create customer habits gain a significant competitive advantage. The Hooked Model describes an experience designed to connect the user’s problem to a company’s product frequently enough to form a habit. The Hooked Model has four phases: trigger, action, variable reward, and investment.

the nature of ingrained habits—behaviors done with little or no conscious thought—which, by some estimates, guide nearly half of our daily actions.

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.2 Habits form when the brain takes a shortcut and stops actively deliberating over what to do next.3 The brain quickly learns to codify behaviors that provide a solution to whatever situation it encounters.

when the behavior occurs for no conscious purpose—simply as an automatic response to a cue—the habit is in control.

For many persistent nail-biters, the unconscious trigger is the unpleasant feeling of stress. The more the biter associates the act of nail chomping with the temporary relief it provides, the harder it becomes to change the conditioned response. Like nail biting, many of our daily decisions are made simply because that was the way we have found resolution in the past. The brain automatically deduces that if the decision was a good one yesterday, then it is a safe bet again today and the action becomes a routine.

Habit-forming products change user behavior and create unprompted user engagement. The aim is to influence customers to use your product on their own, again and again, without relying on overt calls to action such as ads or promotions. Once a habit is formed, the user is automatically triggered to use the product during routine events such as wanting to kill time while waiting in line.

Entrepreneurs should evaluate how user habits impact their particular business model and goals. While the viability of some products depends on habit-formation to thrive, that is not always the case.

MBAs are taught that a business is worth the sum of its future profits. This benchmark is how investors calculate the fair price of a company’s shares.

CEOs and their management teams are evaluated by their ability to increase the value of their stocks—and therefore care deeply about the ability of their companies to generate free cash flow. Management’s job, in the eyes of shareholders, is to implement strategies to grow future profits by increasing revenues or decreasing expenses.

Fostering consumer habits is an effective way to increase the value of a company by driving higher customer lifetime value (CLTV): 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 l...

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 ...

as customers form routines around a product, they come to depend upon it and become less sensitive to price. The duo have pointed to consumer psychology as the rationale behind their famed investments in companies like See’s Candies and Coca-Cola.5 Buffett and Munger understand that habits give companies greater flexibility to increase prices.

in the free-to-play video game business, it is standard practice for game developers to delay asking users to pay money until they have played consistently and habitually. Once the compulsion to play is in place and the desire to progress in the game increases, converting users into paying customers is much easier. The real money lies in selling virtual items, extra lives, and special powers.

The game’s “freemium” model converts some of those users into paying customers, netting the game’s maker nearly $1 million per day.6

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

Products with higher user engagement also have the potential to grow faster than their rivals. Case in point: Facebook leapfrogged its competitors, including MySpace and Friendster, even though it was relatively late to the social networking party. Although its competitors both had healthy growth rates and millions of users by the time Mark Zuckerberg’s fledgling site launched beyond the closed doors of academia, his company came to dominate the industry. Facebook’s success was, in part, a result of what I call the more is more principle—more frequent usage drives more viral growth.

“The most important factor to increasing growth is … Viral Cycle Time.”7 Viral Cycle Time is the amount of time it takes a user to invite another...

It is logical that it would be better to have more cycles occur, but it is less obvious just how much better.”

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.

User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies.