How to keep users coming back

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TODAY’S READ

What it’s about

Hooked: How to Build Habit-Forming Products by Nir Eyal explores the psychology behind creating products that form addictive habits in users. The book introduces the Hook Model, a four-step process for building habit-forming products: Trigger (external or internal cues), Action (user behavior), Variable Reward (varying rewards), and Investment (user commitment). Eyal discusses ethical considerations and how companies can create products that keep users coming back. Get the book here.

TAKEAWAYS

1. The Hook Model: This is a four-step process that companies use to create habit-forming products. The four steps are:

   • Trigger: An actuator of behavior, can be external or internal.

   • Action: The behavior done in anticipation of a reward.

   • Variable Reward: A reward from the action, usually has an element of unpredictability.

   • Investment: User contributes back into the product, like time, data, or effort.

2. Habits are good for business: Habits increase Customer Lifetime Value (CLTV), provide pricing flexibility, supercharge growth, and sharpen the competitive edge. Habit-forming products have lower churn rates and higher lifetime value (LTV), making them more profitable for businesses.

3. Successful companies understand users’ triggers: Companies use triggers to prompt users to take action. Understanding these triggers allows companies to create more engaging and effective products.

4. The importance of heuristics in product design: Heuristics are rules of thumb that guide decision-making and problem-solving. They are critical in product design as they help designers make informed decisions about their products, avoid building features that don’t align with the product’s goals, and prioritize features.

5. Companies use gamification with varying success: Gamification involves applying game design elements in non-gaming contexts. Companies use gamification to enhance user engagement, knowledge acquisition, and retention.

6. The IKEA effect: The IKEA effect is a cognitive bias where people place a disproportionately high value on products they partially created. This effect can be leveraged by companies to increase customer engagement and loyalty.

7. Understanding the Manipulation Matrix: The Manipulation Matrix is a framework that helps companies understand how they can ethically manipulate user behavior to create habit-forming products.

8. Three core motivators in human beings: The desire for pleasure, for hope, and social acceptance. These motivators drive user behavior and can be leveraged by companies to create more engaging and effective products.

9. Ease of using the product: The lesser the product disrupts the user’s routine, the more likely it is to form a routine with the user. This is why user-friendly design is crucial in product development.