How to build habit forming products

Updated: Feb 28

Have you ever wondered why some people are hooked to Facebook, TikTok, Instagram, or other specific apps? What makes these apps so addictive?


Research shows that an average smartphone user downloads nearly 80 apps, yet, they only use nine apps daily out of the possible 80.


What does this imply? Why do people download apps and never use them, yet they remain addicted to others?


It's simple. Humans are habitual.


If a mobile app is interesting and informative, users will feel the need to stick around.



Habits & The Hook Model


The Hook Model is a four-step process that can be embedded in a product to create and increase user engagement. The product could be a mobile app, a website, a subscription, or even a physical one.


To understand the Hooked Model better, we need to understand — what is a habit? why and how are habits formed?


What is a habit?

James Clear, the author of the book Atomic Habits says — “A habit is a behaviour that has been repeated enough times to become automatic”


I like the definition of behavioural scientist Jason Hreha better, “Habits are, simply, reliable solutions to recurring problems in our environment.”


Why habits are formed?

Whenever we come across a new situation, our brain has to make a decision. Our conscious brain gets into the mode of finding the correct response to that situation.


The brain activity during that time is very high as it’s taking in tons of new information and trying to make sense of it all. It’s busy learning the most effective course of action.


This takes up a lot of energy and our conscious mind can only pay attention to one problem at a time. As a result, the brain is always on the lookout for ways to preserve our conscious attention for whatever is most essential.


So, whenever possible brain delegates the task to the non-conscious mind to do it automatically. This is precisely why habits are formed.


How are habits formed?

James Clear in his book Atomic Habits has shown how all habits proceed through four stages — Cue, Craving, Response, and Reward.


He writes — Rewards are the end goal of every habit. The cue is about noticing the reward. The craving is about wanting the reward. The response is about obtaining the reward. We chase rewards because they serve two purposes: (1) they satisfy us (2) they teach us.


This four-step pattern is the backbone of habit formation, and our brain runs through these steps in the same order each time.


Hook Model Explained

The hooked model is very similar to James Clear's model for habit formation. However, the focus is to help create habit-forming products.


The first step of the hooked model — Trigger. It is any signal that can kickstart a behavior that involves using our product. Triggers can be of two types — external & internal.

External triggers are signals that explicitly tell our users their next action. Like, our promotional email in their inbox, our app notification, our listing on the search engine (paid/organic), our app icon on the home screen, etc.


Internal triggers are signals that are tightly coupled with our users thought, an emotion, or a preexisting routine. They can manifest automatically in our user's minds whenever they feel or think something.

Consider the following situations  — 

You forgot your laptop charger at home.

You are hungry and there is nothing to eat at home.

You feel like going out for drinks and don’t know where to go.

Getting bored at home.

Did Dunzo, Swiggy, Zomato, Netflix come to your mind?

That’s what internal triggers are about.

Connecting an internal trigger with a product is the ultimate goal of the hooked model.

It’s a really powerful thing.

The second step of the hooked model is the Action phase. Triggers, either external or internal, are useless if the user doesn’t take the action.

For the hooked model to work, the effort required by the user to perform the action should be as little as possible.

Dr. B.J. Fogg, Author of the book Tiny Habits, has developed a model represented in the formula B = MAT, to explain what drives us to take action.



Fogg explains that there are three important ingredients required to initiate any behavior(B) — 

  1. The user must have sufficient (M)otivation.

  2. The user must have the (A)bility to complete the desired action.

  3. A (T)rigger must be present to activate the desired behavior.

If any component of this formula is missing or inadequate, the user will not cross the “Action Line” and the behavior will not occur.

So, we must ensure that the action that we want our users to take on a recurring basis should be as easy as possible.

The third step of the hooked model — Variable Rewards phase in which we reward our users by solving a problem, reinforcing their motivation for taking the action in the previous phase.

A recent study by Standford Professor Brian Knutson revealed that what draws us to act is not the sensation we receive from the reward itself, but the need to alleviate the craving for that reward.

Now, why variable rewards?

In 1950, psychologist B.F. Skinner conducted experiments to understand how variability impacts behavior.

First, Skinner placed hungry pigeons inside a box that delivered a food pellet to the birds every time they pressed a lever. As a pigeon accidentally pressed the lever for the first time and received the food, it started repeatedly pressing the level.

In the next part of the experiment, Skinner added variability by configuring the machine to deliver food after a random number of taps. So, pigeons would press the lever and they may or may not receive the food.

Skinner revealed that in the second experiment, the number of times pigeons tapped the level increased dramatically.

Also, recent experiments have revealed that variability increases the level of the neurotransmitter dopamine in our brain that drives our hungry search for rewards.

Variable rewards are the reason why gambling, slot machines, roulette, spin the wheel are so addictive. People crave dopamine.

The very recent example of variable rewards is the one discussed previously, Tez (now Google Pay) growing to 140 million transactions within three months of the launch. For every transaction, they were giving away Scratch Cards that could get users between 0 (i.e. Better Luck Next Time) to ₹1000.

Variable Rewards doesn’t necessarily have to be monetary. According to Hooked Model, variable rewards come in three types — 

  1. Rewards of the tribe (or Social Rewards) — Variable rewards that can make us feel accepted, attractive, important, and included. Likes on your Instagram Pic, Number of your Twitter followers, Upvotes on your Quora/Stackoverflow answer are some common examples of social rewards.

  2. Rewards of the hunt — Variable rewards that can satisfy our primitive brain’s need to acquiring things. Winning Money in Gambling, Twitter or Linkedin Feed (we are endlessly scrolling to acquire information that can be valuable for us).

  3. Rewards of the self — Variable rewards that we seek for a personal form of Gratification. Unlocking new abilities in a video game, Zero unread emails, Acquiring a rare badge in Stackoverflow are some of the examples of Rewards of the self.

By implementing variable rewards in our product, we can greatly increase the chances of a user coming back and repeating the desired action.

The fourth part of the Hooked Model is the Investment phase — This is the last part of the model and a critical step.

Unlike the action phase, which delivers immediate gratification, the investment phase is about the user’s anticipation of rewards in the future.

The goal of the investment phase is to increase the likelihood of the next pass through the hook. It can be in two ways:

  • Using investments to load the next trigger of the hook — Connecting calendar in task management like Any.do is a perfect example of this type of investment.

  • Storing value. Posting content on Medium, Creating Playlists on Spotify, Following Amazing People on Twitter/collecting followers are all about storing the value in some form or other.

Remember this — before users create mental associations that activate their automatic behaviours, they must first invest in the product.

I have tried to take out the best available information from various books and blogs to explain the concepts of habits, the hooked model, and how to use them in your products.


Conclusion


Think of some of the top performing apps in India - Google Pay, Cred, Swiggy - all have created strong habits around their product.


You need to think in terms of habits not features when thinking customer retention.


PS - I learnt the concept of hook model and customer retention the hard way and had written a 3-part blog on my lessons from taking AppBrowzer from 0 to 1 million users. You can learn a lot from my mistakes here.



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