Building a Habit-Forming Product: the Addiction is REAL!

Everyone can create a brand with a wide range of products - but not many have catched the essence of building a successful product. It isn't merely about acquisition of new customers, but retention of existing customers to maximize customers lifetime value (CLV), which is essential to a brand's sustainability.

Summarized by Javen Loh, Marketing Manager of White Forest Suites

Book: Hooked: How to Build Habit-Forming Products

Author: Nir Eyal with Ryan Hoover

The author of this top-selling book, Hooked: How to Build Habit-Forming Products, by Nir Eyal, recognizes that many of these addictive products have used the ‘Hook Model’ to get us hooked, makes us keep returning to the same routine and become addicted to them. For businesses, this means a significance increase in the lifetime value of each customer (CLV) by retaining existing customer base.

Think about it – how has social media become essential in our lives? It’s because of the habit-forming traits they possess. In order to form a habit, it basically involves 2 aspects – frequency and perceived utility. Imagine something is so useful like Taobao where you can find everything under the sun using this application, you’ll soon find that it has become a daily routine that you just tend to keep scrolling to discover things you want. And just like Facebook and Instagram, it’s the first thing you do in the morning and the last thing you do at night, you browse it when you’re waiting for your food, when you’re stuck in the traffic, and especially when you’re relieving yourself in the toilet. Despite the fact that they might not bring much meaning to our lives, we use them so frequently that they have become part of our lives.

As such, to create a habit-forming product, it involves 4 important steps: Trigger, Action, Variable Reward, Investment.

Trigger

Triggers are everywhere. When you’re scrolling through your social media and you see learn more, shop now, send message ; when you go shopping, you pass by a store and you see Try Me; or if you subscribed to a Youtube channel, it reminds you when there are new post from the people you follow. These are all external triggers that are trying to persuade you into clicking them. However, external triggers alone are insufficient. To drive repetitive behavior, you must go from external to penetrate the internal part of us - the users’ emotions. You must understand what the negative emotions people are seeking to get rid of. We scroll Instagram probably because we’re bored; perhaps some are following others to keep up with the latest update because they don’t want to get left behind; checking Facebook from time to time so that we won’t miss out any recent drama and we can share the news before other people do. As such, you must consider these negative emotions such as Fear of Missing Out (FOMO), Boredom, or Desire to Fit into the Community. Use these emotions as internal triggers that urge users to perform certain actions.

Action

Dr Fogg from Stanford University has developed the Behavior Model. This model tells us that a behavior or an action depends on 3 factors, called MAT.

M stands for Motivation; A means ability; and T means Trigger.

A clear trigger can be effective only when the users is motivated and has the ability to perform the action with minimal effort. Just imagine when your phone rings and you really want to answer the call, but it is buried deep inside your handbag that you don’t have the ability to answer it. Another scenario is that the phone in your hand rings but it’s the insurance agent calling again and you won’t feel like answering it for sure. Lastly, it’s your crush calling, and your phone is actually right beside you. But you accidentally put in on silent mode! You’re able to reach your phone and definitely want to answer it but there’s no trigger here. Hence, the Behavior Model emphasize on Motivation, Ability as well as Trigger to be the essential elements in driving customers’ actions. Many businesses have been spending money on advertisements, which is a kind of external trigger, and find it difficult to get sales despite all the effort. If you’re facing this problem, you probably should consider if your audience have the ability to perform the next steps. Always remember that the easier it is to perform an action, the greater the likelihood that it’ll become a habit. To simplify everything, there are some elements to be considered, such as the time it takes, money it costs, degree of physical or mental effort involved, and whether it matches or disrupts our current routine. If something takes little time, cost little money or effort and matches our existing routine, it is very likely to become our new habit.

Variable Reward

In phase 3, you need to understand the significance of Variable Rewards. Imagine going to a café for the first time. You must be very excited to try out their best dish. After you go there for a few times, there’s no doubt that you’d eventually get bored of them no matter how delicious they are. People simply don’t like doing the same thing to get the same rewards every single time. That’s why people love gambling, that’s why we keep refreshing our news feed, that’s why we’re so excited about the parcel we receive and the reason why so many people loving going for omakase - because we don’t know what we’ll be getting next. And this is what makes people keep coming back. When they keep coming back for more, the frequency becomes higher and soon it’ll become a habit.

Investment

Finally, investment. After your audience got their reward and they’re happy with it, it’s now the time to ask for a little contribution. Ask them to work a little and store value in the product itself. This will bring a magical effect that makes them become sticker to your products, we call this the IKEA effect. You know why IKEA has become so popular that I’m sure everyone has heard of it. It’s not the cheapest and definitely not of the highest quality. However, it seems that people love the furniture more than it deserves. This is simply because we put it our own effort in assembling the furniture and people tend to cherish something made by themselves more compared to those which are not. This is why involving your audience is a great idea so as to turn them into your loyal customers.

To create a habit-forming product, you must go through these 4 steps to form a cycle that guide users to go through it without any conscious thought required on their parts. It must be simple enough that people could just do it without even realizing it.

To conclude, this Hook model is an extremely powerful one. Just be sure to use it in a way not to manipulate people, but to benefit your audience.