Hooked: How To Build Habit-Forming Products

Lesson 3 of 14

Forming a Habit-Frequency

 

Hooked: How To Build Habit-Forming Products

Lesson 3 of 14

Forming a Habit-Frequency

 

Lesson Info

Forming a Habit-Frequency

So what does it take to form a habit? Well, turns out we only need two things only two things matter when it comes to forming a habit. The first of those two things is that the behavior occur with sufficient frequency a frequency is super important in this study done in oxford they took a group of subjects and they saw who would form habit around flossing their teeth. Turns out about sixty percent of population, doesn't floss her teeth so they had plenty of people to choose from and they wanted to see who would form this flossing habit. And it turns out the people who flossed most often the ones who did the behavior most frequently were the ones who sustained that habit now there's all kinds of urban legends when it comes to habits you may have heard some of these myths like you know there's a magic number around the number of days you need to do a habit behavior before it becomes a habit right twenty nine days no, no, no it's forty five days no it's sixty days that you have to do ah h...

abit before it becomes something that's part of your day to day routine turns out it's book there's no scientific evidence that there is one magic number but here's what we do know two things number one we know that the more frequently a behavior occurs the more likely it is to become habit so when you think about some of the products we mentioned earlier facebook and twitter and instagram and what's happened slack and snapchat how often are these products used constantly right not just daily intra daily some of the statistics show us that people are using their phones their smartphones one hundred and fifty times a day so the habit forming potential off these products is very, very high because we use them so frequently the second thing we know is that there's a precipitous drop off in the likelihood of forming a habit if the behavior does not occur within a week's time or less so some of you might be having an oh crap moment because I know you took this course because you're looking for ways to build habits within your customer base so if your user behavior is not occurring within a week's time or less you may have a problem. Okay, so what does that mean if you say look, you know my product is just not use that frequently well, I had this very similar situation and this very similar question when I gave a talk recently in front of seven hundred real estate agents and the person who brought me in introduced me and said here's nearly all he's an expert on habit forming products he's going to tell you how to make buying and selling a home a habit well, I got up there and let me be very clear here buying and selling home is never going to be a habit remember the definition of a habit of behavior done with little or no conscious thought well, buying a home is the exact opposite of that right you over deliberating we analyze we talk about it not going to be a habit and it just doesn't occur with sufficient frequency so instead if your product is the kind of prague which just isn't used frequently enough you've got to find a different way to engage your users you've got to find that other behavior to bring people back. So here's what somebody from the audience that day one of the real estate agents came up to me and said I got idea I'm not going to make buying and selling a home a habit what I'm going to do is I want to create this association with my customer base with people in my neighborhood that any time they think they have financial stress any time they're worried about their kids college fund or the gyrations of the stock market or paying their bills I want them to come to me I want them to call me I want them to come to my website I want them to check my app I want them to be in touch with me I want to make getting in touch with me a habit then who do you think they're going to buy a home or sell a home with when that that neighbor actually decides to transact of course it's going to be that agent so here's here's one of the first principles that I want you to take away from today that monetization is a result of engagement right so that if the companies that are first to mind the people that are first to mind the services that are first to mind those are the companies and products and services that win and they do that by keeping people engage by creating these these habits okay yes what do you think happened in case of airbnb where you only think of airbnb its first to mind if you've used it before you loved it but it's not very frequent I mean people might travel less than once a quarter right so we're going to get into what kind of businesses need need habits and what kind of businesses don't need have it there's lots of businesses that don't need habit right this isn't magic pixie dust that we can pour in every business and poof you're gonna have the next facebook some businesses just don't need habits right they can bring customers back in all sorts of ways and we'll get to that a little later okay so we know that frequency is very important that's the number one criteria here's the only other thing we need to form a habit what we need is attitude change remember that that study I just told you about the flossing study? Well, that same flossing study found that people who change their perception of the behavior people who went from thinking you know, I don't really need to floss my teeth that's why I pay my dentist right the people who went from thinking that that's why that was their attitude around flossing their teeth that it's just not something they do those who could shift their perception of their behaviour those who had an added to change around that behavior those are the ones who then sustain that habit six, twelve, twenty four months into this study so we need frequency and attitude change. Now frequency is going to be your job right designing a product that is used frequently enough that has this frequency requirement to be used often enough that's kind of endemic to your product or service for the majority of today's workshop. What we're going to be focusing on is how do you change attitudes and more specifically, how do experiences change attitudes you know used to be the way we used to change attitudes was mad men style, right? We would show people lots and lots and lots of of advertising and that would change the perception well, now you know these companies that we mentioned earlier, they're not necessarily advertising their changing perceptions through an attitude change and that's going to be the core of today's of today's workshop right there, how these experiences change people's perceptions and attitudes before we dive into the mechanics of how do we change perceptions and attitudes? Let me dive into a bit around. Why does this even matter, right? Why, from a business perspective, why our habits so important for the bottom line? So the first reason that habits matter for business is that have its increased customer lifetime value that when the longer product is used, the more valuable each customer is to the enterprise rights customer, lifetime value. The second reason is that habits give us greater pricing flexibility, so when people form these routines around the products they use, they're less sensitive to small fluctuations in price. You know, I was just reminded on the way here starbucks recently raised their prices no, but how many people just stop drinking their mourning a lot because of a ten cent price increase, right? Not not not too many people because it's just become part of their day to day habits their day to day routine so the company has greater pricing flexibility next habits, supercharged growth you know, here in silicon valley everybody talks about how they want their products to go viral right that's kind of the new hot buzzword everything has to go viral viral, viral but when people say they want their product to go viral, here's what they really mean, what they really want is they want to see a growth chart that looks like this right? This exponential growth this hockey stick growth chart that's what everybody wants to see but it turns out that straight veracity is not enough if you think about the definition of a product going viral is when one person sort of speak infects right? They tell more than one person about their particular product or service. So if I tell cynthia and chic about a particular product, that product has by definition gone viral but that's not good enough and here's why? What of that transmission? What if me telling more than one person about your product of service on ly happens once a year what's happening toe all the rest of your users that you need to collect in order to get that kind of growth there constantly churning right? People are constantly leaving your product or service so if that transmission isn't occurring frequently if people aren't telling others about your practice service all the time it's very difficult if not impossible to ever get that hockey stick growth. So with these products or services that are used frequently enough that are used as these habits that ever have a chance of getting this kind of hockey stick growth curve and finally habits increased defense ability that when you think about when we former routine around a product or service it's very hard for the competition to swoop in and take that customer away uh, let me do a quick demonstration here I want you to raise your hand for me if you've searched with google in the past twenty four hours who searched with google everybody's had all right, terrific. What about if you searched with being or yahoo in the past twenty four hours? Anybody sorts of being, you know, no, nobody nobody has searched with anything other than google in the past twenty four hours. Now why is that? Is that because google is just such a far superior product of have the geniuses down a mountain view just come up with better algorithms? Well, turns out that if you do head to head comparisons, there's been third parties that have done these comparisons, analyzing how to customers respond to google versus being when they strip out the branding and users don't know whose search engine is whose turns out it's about a fifty fifty split that customers can't really tell the difference between the search engine results, right? And yet all of us right, everybody in this room just goes to google every day did you know? And this isn't an not an endorsement for anyone search engine I don't work for any of these guys, but did you know that being will actually pay you to search with them they will give you points that are redeemable for money to search with their search engine and yet we don't even give them a chance we don't even think about an alternative solution which brings me to the cold hard fact that when it comes to many products in the market it's not the best solution that necessarily wins frequently if the product that's able to form the sticking your customer habit that's able to carry the day as demonstrated with cool versus being so we know have its increase customer loyalty they increased defense ability so we know habits could be very good for our users they could help them form healthy habits improve their lives we know habits could be very good for our bottom line they're very good for business here's the problem forming user habits are very hard work and exceptionally rare when we think about how many products over the past five to ten years have become part of our day to day lives have formed new habits in our in our daily interactions we're talking about maybe a handful of companies maybe too they're exceptionally rare but those who are able to do that create a tremendous amount of economic and customer value so if your business model requires what I call unprompted engagement and by the way a zanon mentioned earlier you know not every business needs a habit okay, not every business needs a habit. There are plenty of ways to bring customers back on their own are not on their own right, with some kind of prompting using search engine optimization using advertising, you know? Heck, you could have a physical store front, right? You can open up ah shop to bring people to your place of business, but if your business model, if the way that you create and deliver value to your customers requires unprompted user engagement requires people to come back on their own. Just as all those other companies that we mentioned earlier facebook and twitter and instagram what's happened slack, think about it. Those companies would go out of business if they had to spend on advertising to bring people back every time, right there models depend upon forming these customer habits. And so if your business model is that style of business, if your business model necessitates unprompted user engagement, what I'm going to share with you today is a design pattern to help you build better product hypotheses. Now thats a mouthful. Let me unpack that a bit better product hypotheses now, how many of us are familiar with lean startup methodologies? Because every know about lean startup has espoused by eric reese steve blank, they tell us that the way to build products better is through this build measure learn loop right build measure learned that's kind of the lean started methodology and so it's a great methodology it's a lot better than the way we used to build products right? We used to build products with this waterfall methodology where we put a bunch of engineers a bunch of coders in a room they'd sit there for a year or so then they'd come out and make a product and typically nobody wanted to use that product but now we're in line right now we use build measure learn methodologies and we talked to our customers we get user feedback that's what allows us to build better products but what's the most expensive part of build measure learn where does all the money the blood, sweat and tears all ago build measure or learn building right it's the building that's so expensive the measuring in the learning that's fun right that's easy once you set up the infrastructure the measuring in the learning is great that's relatively quick it's the building that's so expensive it's figuring out what we put into our product and what do we not put into our product? Which features do we build and which do we toss? And so what I propose is that we don't just listen to our customers which we should certainly dio right we should get user feedback we should hear what they have to say but it turns out that there's all these things that drive customer behavior in ways that users can't articulate things, that people just can't tell you about how they are, how their behavior will manifest, and yet will change their behaviour all these in articulate herbal needs. And so what I propose is that we go deeper than what just customers are able to tell us they need and to look to consumer psychology to better understand our customers, to get inside our customers heads, and if we conduce that if we can better understand our customersneeds, maybe even better than they understand them themselves, that defines what we will build and what we will not build and makes all the difference between product's success and product failure. Okay, so today's the goal of today's workshop is to help you generate new hypotheses, new ideas that, after this workshop, you can apply for the rest of your career, right? You can take in the business you're working on today and the business you'll work on in a few years and apply many of these techniques two, two year product or service. Now, if your business is not something that necessarily requires a habit, okay, that's, not a deal killer, right? You can still have a very successful product or service without forming a customer habit, it's just that you don't need the entire package of what I'm going to show you today, what you can do with today's workshop is you, khun, use piecemeal. I'm going to teach you a lot of different tenants off consumer psychology, and you'll be able to take those separate tenants on their own. Okay, but if you're forming a habit, if you're building a product that requires a habit, you're gonna need it all. Are you gonna need the whole model? And this model that I'm going to show you today is called the hook model. The hook model. Ah, hook is an experienced designed to connect your users problem to your solution with enough frequency to form a habit connecting your users. Problem to your solution with enough frequency to form a habit. So the rest of today's workshop is going to be all about. How do we form these hooks in our products, right? If they require habit, how do we make sure that we can build in these hooks?

Class Description

Customers who come back save you time and money. You don’t have to expend as much energy attracting them – they already know you and what you do – and they are a more predictable source of revenue. Learn the science of creating a repeat customer in Hooked: How To Build Habit-Forming Products.

Nir is a writer and thinker whose primary focus is helping businesses unlock the power of habits. In this class, he’ll teach you how to build products and experiences that are inherently “sticky.” 


You’ll learn:

  • The psychology of triggers and how to build them into your product/service
  • How to use variable rewards to increase engagement
  • The stages of habit formation and how to optimize them for better retention

Nir will teach you how habits develop and he’ll show you how to apply those insights to your business – no matter what kind of service or products you sell. You’ll also learn about the common design patterns of habit-forming products.

If you want to lower the cost of doing business by increasing the number of repeat customers you work with, don’t miss Hooked: How To Build Habit-Forming Products. 

Reviews

a Creativelive Student
 

The information presented by Nir was excellent and pertinent to today's evolution of business development and success. This was beyond my expectation. There was great material that was stimulating and engaging.

Jason Casher
 

Loved it! Was thorough and gave a strong sense of direction, as well as clear methods to check to see if you are on right track.

Liza
 

Nir Eyal is great! Insightful, interesting course on how habits are created, established and reinforced.