hooked

Creating habits as a marketing strategy

The strapline for Nir Eyal’s book is ‘How to build habit-forming products’ because 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. Cognitive psychologists define habits as “automatic behaviours triggered by situational cues”; things we do with little or no conscious thought. The products and services we use habitually alter our everyday behaviour, just as their designers intended. Our actions have been engineered.

Creating habits as the marketing strategy

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.

The problem

“Many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.” John Gourville a professor of Marketing at Harvard says “that for new entrants to stand a chance, they can’t just be better, they must be nine times better.” Old habits die hard and new products or services need to offer dramatic improvements to shake users out of old routines. Gourville writes that products that require a high degree of behaviour change are doomed to fail even if the benefits of using the new product are clear and substantial.

Old habits die hard

The enemy of forming new habits is past behaviours, and research suggests that old habits die hard. Even when we change our routines, neural pathways remain etched in our brains, ready to be reactivated when we lose focus.

  • Two-thirds of alcoholics who complete a rehabilitation program will pick up the bottle, and their old habits, within a year’s time.
  • Research shows that nearly everyone who loses weight on a diet gains back the pounds within two years.

Behaviours are LIFO (last in, first out)

The nature of motivation is a widely contested topic in psychology.  Dr BJ Fogg who founded the Persuasive Technology Lab at Stanford University has done extensive research on credibility and behavioural design. Behavioural design is where psychology and technology meet – a systematic way to influence the desired behaviour, one step at a time.  Fogg argues that three core motivators drive our desire to act.

  1. to seek pleasure and avoid pain;
  2. to seek hope and avoid fear;
  3. and finally, to seek social acceptance and avoid rejection.

Competitive advantage

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

From bushmen to businessmen

For years, scientists have tried to answer a central question of human evolution: How did early humans hunt for food? We know our ancestors handcrafted spears and arrows for hunting, but evidence shows that these weapons were only invented five hundred thousand years ago, whereas we’ve been eating meat for over 2 million years. How, then, did we hunt during the first 75% of our existence? According to Harvard evolutionary biologist Daniel Lieberman, we chased down our dinner. Early humans killed animals using a technique known as “persistence hunting,” a practice still common among today’s few remaining pre-agrarian tribes

Persistence hunting

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 hunters chasing is the same mechanism that keeps us wanting and buying.

Hook model

Eyal has pulled together three years of distilled research and real-world experience resulting in the creation of the Hook model. A four-phase process companies use to form habits. Businesses that create customer habits gain a significant competitive advantage.

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.

  1. Trigger: How does the loop initiate? In the beginning, this may be through external triggers (such as an email, notification, icon badge, etc.) but through successive loops, the user eventually creates internal triggers where a particular thought or emotion will send them back to your product.
  2. Action: Once the user is aware they need to use your product (through the trigger), what it the simplest action they can perform to get some kind of reward. For example, a Facebook “Like”.
  3. Variable reward: How are they rewarded for this behaviour? This could be social validation (e.g. “my friends approve!”), a collection of material resources (e.g. add a photo to a collection) or personal gratification (e.g. inbox zero). The “variable” part is important – rewards should not always be predictable, encouraging users to repeat the cycle. Classic examples include slot machines and lotteries.
  4. Investment: Finally, the user needs to put something back in to increase the chance of repeating the loop. This could be content (e.g. a book in your Kindle), user entered data (e.g. profile information or linked accounts), reputation (e.g. something to gain a 5-star seller review), or a learned skill (e.g. I’m now really good at this software program). The investment also sets up the trigger for the next cycle of the loop.

Habit-forming technology

It is already here, and it is being used to mould our lives. The fact that we have greater access to the web through our various connected devices—smartphones and tablets, televisions, game consoles, and wearable technology—gives companies far greater ability to affect our behaviour. 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. Ultimately, user habits increase a business’s return on investment. Higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharpened competitive edge together equal a more powerful bang for the company’s buck.

Important questions

Eyal says that he “embarked upon a journey to learn how products change our actions and, at times, create compulsions “  When you look at Industries that are dependent on mind manipulation this book tries to show how these companies engineer user behaviour. That raises two fundamental questions:

  1. What are the moral implications of building potentially addictive products?
  2. Could the same forces that made these experiences so compelling also be used to build products to improve people’s lives?

 

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Hi, my name is Ron Immink, I am a business coach, author and speaker, working with companies to improve their future prospects and improve their business models.
If you have any further questions that the website is not answering, feel free to send me a WhatsApp message and I will respond asap.
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