What I Have Learnt About Habit Forming Products

Every morning, within minutes of waking up, I turn to my iPhone and check Facebook, Whatsapp, Instagram and my email (in that order). This is before I do anything else — wash my face, brush my teeth, have my routine cup of tea… before I even sit up in bed. A friend recently Whatsapped me this revealing picture:

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“I need to go here” was my response. “Please share eye exercises with me,” was hers.

Let’s face it, me and several million others like me are hooked. Products are no longer something we use out of necessity, but rather out of addiction. Do I really need to see the latest “Throwback Thursday” post when my alarm goes off at 8:45 am on a Thursday morning? To be entirely honest, most of the time I am too groggy to even consciously be aware of what I am doing at that hour. Turning to my phone and tapping on those all too familiar icons has become an unconscious behaviour doomed to repeat itself — one that I in fact unwittingly partake in even when me eyes open mid-slumber, at 2, 3, 5 am…

Mildly reassuringly, statistics indicate that I am not alone. 22 percent of social media users use social networking platforms several times a day. Think of anything else that you do several times a day? The list is not very long…

While there is a fine line between habit and addiction, this blog post will concern itself with the former, and more so, with how products today — more than ever before — are creating habit-forming behaviours.

Habit, according to the Merriam Webster dictionary is “a behavior pattern acquired by frequent repetition or physiologic exposure that shows itself in regularity or increased facility of performance; an acquired mode of behaviour that has become nearly or completely involuntary.” The fact that I automatically pick up my phone as soon as I wake up — often not being aware of the action entirely — fits in with the definition of a habit.

I recently finished reading Nir Eyal’s book, “How To Build Habit Forming Products” that provides an insight into some of what I have raised above. “How do companies, producing little more than bits of code displayed on screen, seemingly control users’ minds? What makes some products so habit forming?” Eyal asks.

I wish I could say the book (or literature elsewhere) reveals the answer in categorical terms; a step-by-step guide to creating that habit-forming multi-million dollar product. That, of course, is not the case. At best, and this is a pretty good best, we can only look at what some habit-forming products did right, and try and establish trends that explain the how and the why.

Here are few things that I have learnt thus far about habit-forming products:

1. Good marketing is not expensive marketing, but rather emotive marketing. 

I log on to Facebook and see a selfie of my friend, let’s call him Rahul, floating over Cappadocia in a hot air balloon. I am planning a trip to Cappadocia in a couple of months, so immediately click on his photo. Before I know it, I have wasted half an hour of precious work time stalking through Rahul’s 200-plus photos of his trip with his family to Turkey. I don’t even particularly care about Rahul.

Next, I tag my friend, let’s call her Swati, on one of the photos, and add the comment: “Can’t wait to be doing this next month!” This is what David Skok, a tech entrepreneur calls “Viral Cycle Time.” Specifically, VCT is the amount of time it takes a user to invite another user to the product. “For example, after 20 days with a cycle time of two days, you will have 20,470 users,” Skok writes. “But if you halved that cycle to one day, you would have over 20 million users! It is logical that it would be better to have more cycles occur, but it is less obvious just how much better.”

This aspect of Facebook is more effective as a marketing tool than the billions the company can invest in billboards or TV ads (I can bet you have never seen Facebook on a billboard or TV ad). What makes Facebook so effective is the desire for social connectivity that fuels my use of the networking site, and aspects in its code that enable stories that would interest me to appear higher on my newsfeed, the compulsion to tag other people who would probably not have seen that post otherwise, and most importantly, the ability to keep me coming back for more.

In other words, marketing is no longer about newspaper ads, TV ads, billboards or other conventional forms of advertising, but rather, the emotional connect that a product can establish directly with its customer base, without resorting to any external medium.

2. Habits are not easy to form, nor to change

The answer to the question “how are habits formed” is easy enough. If I repeat the same activity thousands of times over, eventually the brain will reconstitute it into a habit. I probably visited Facebook consciously thousands of times before my brain unconsciously turned to my phone at 8:45 am one fine day.

The more pertinent question here is how can products get a user to perform one action (namely using the product) thousands of times, willingly? Like I said, there is no easy answer, but the example above of an emotive connect is definitely part of the answer. I log on to Facebook every day to see pictures like the one Rahul posted, to read interesting articles that some of the people I have followed and pages I have liked are sharing, to connect with my childhood friend who lives half-way across the world… the social networking site’s ability to use my information (based on the kind of posts I am clicking on, sharing, and posting) to target information to me makes the experience more immersive.

In psychological terms, habits are formed through what Charles Duhigg, a reporter for The New York Times and author of The Power of Habit, refers to as a “habit loop.” There is a cue or trigger, which signals to your brain to turn a behaviour into an automatic routine, followed by the actual routine of the behaviour, and then the reward. Specific to my Facebook use, the little blue icon on my phone is the trigger or cue — making checking my newsfeed an automatic routine possible in the first place. The reward is the emotional gratification I get from seeing photos, images, articles and other such material posted on Facebook.

Once the habit loop is secured, the action becomes a habit, and the brain takes a break. “In fact, the brain starts working less and less,” Duhigg said. “The brain can almost completely shut down. And this is a real advantage, because it means you have all of this mental activity you can devote to something else.” Facebook, after years of using it, is now a habit.

This would explain why every time Facebook changes its layout, I cringe. I had just about gotten used to the previous format, and they changed it! If Facebook let’s you opt in to the change before making it compulsory, I always opt-out.

The fact that you are not thinking about what you are doing when it becomes a habit is the very reason why habits are so hard to change. “What we know from lab studies is that it’s never too late to break a habit,” Duhigg said. “Habits are malleable throughout your entire life. But we also know that the best way to change a habit is to understand its structure — that once you tell people about the cue and the reward and you force them to recognise what those factors are in a behaviour, it becomes much, much easier to change.”

That, or don’t give people a choice, the way Facebook does it.

3. Get them hooked before trying to monetise

Now that we have briefly understood habit forming behaviour, let’s look at how this applies directly to products, specifically in terms of monetising products. There is an optimal point to monetise: too soon and you will risk losing the customer, too late and you lose out on revenue.

Let me give you a scenario. Say you have just downloaded a game “Zombies Versus Cats” from the app store. You have completed level 1, and a pop-up emerges saying that you need to pay Rs. 200/- to move to the next level. Chances are you will not authorise the payment and forget about the app, downloading the next free app on the iTunes app store charts instead.

Now let’s say you have downloaded “Zombies Versus Cats” and have progressed to level 50. You have done exceedingly well, placed fourth amongst the forty friends that the app tells you are also playing. The app now tells you that you can do even better if you buy an expansion pack with special weaponry for Rs. 200/-. Chances are that you will buy the expansion pack, and if not at Level 50, then at Level 60 when the competition gets more intense.

Eyal explains this better when he writes, “Once the compulsion to play is in place and the desire to progress in the game increases, converting users into paying customers is much easier. The real money lies in selling virtual items, extra lives and special powers.”

That would explain how Candy Crush Saga, downloaded more than 500 million times, makes nearly $1 million a day through in-app purchases.

This fact — of not trying to monetise too early — is applicable to products outside of the video-game market as well. Our website The Citizen aims to move to a subscription-based model in a few years… only after it has acquired a customer base that is hooked and will be willing to pay the subscription fees, as opposed to deleting the app from their phone and moving on to the next free newspaper-format app or website.

4. Do not build marginally better products

This is probably the single best piece of advice for would-be entrepreneurs: If the product that you have in mind is marginally better than its competitor, don’t bother building it. Entrepreneurs often fall into the trap of thinking that building a product that improves upon an existing product in the market on one or two aspects will be enough to woo customers away. Wrong, and why this is wrong links directly to the point about it being very hard to break habits once they are formed. To put things in perspective, two-thirds of alcoholics who complete a rehabilitation programme begin drinking within a years’ time; nearly every one who loses weight following a diet gains the kilos back within two years.

Old habits die hard and because of that better products do not always win, especially if a large number of users have already adopted a competing product.

John Gourville, a professor of marketing at Harvard Business School, puts it into perspective when he says, “many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.” According to Gourville, for a new product to stand a chance, it must be nine times better than its main competitor.

If I told you that there was a new email provider on the market, better than Gmail in what it offered, would you be inclined to make the switch?

Other than the fact that old habits are hard to break, users also store value in products. Gmail stores all the conversations and emails that have been sent and received. Instagram is now a users’ virtual diary of sorts. Facebook connects you to the hundreds of people you have met over the years. As Eyal writes, “the nontransferable value created and stored inside these services discourages users from leaving.”

At the same time, habits keep users loyal. Eyal draws a comparison between Google and Bing, and says, “If you’re skeptical that Google is habit forming, just try using Bing. In a head-to-head comparison of the efficacy of an incognito search, the products are nearly identical. Even if the geniuses at Google have in fact perfected an algorithm, the time saved is imperceptible to everyone but robots and Mr. Spock. Milliseconds matter, but they don’t hook users.”

Switching from one product to another requires cognitive effort — this explains why I cringe every time Facebook changes its layout. My brain is being forced to understand something that it is encountering for the first time, and even if it is a marked improvement, it is a cognitive burden. Facebook, however, doesn’t give you a choice, and you grudgingly make and then quickly adapt to the change. When choosing between products, however, this cognitive effort is make or break. Your decision to use Google over Bing isn’t because Bing is  technologically inferior, but because adapting to the differences in the Bing interface slows you down and makes Bing feel inferior.

And you thought you could build the next Snapchat? Think again.

5. Successful products solve problems

Let’s say you have splitting headache. I offer you a disprin for Rs. 50/- and assure, rather guarantee, that the pill will make the headache disappear within the span of half an hour. Now let’s say you have that same splitting headache, and instead of a disprin I offer you a Vitamin C tablet for Rs. 50/-. It will not make your headache go away immediately, but take a Vit C tablet every day for the next month, and you may have less frequent headaches.

In which scenario are you more likely to pay me Rs. 50/- for the tablet?

Products work the same way. Ask yourself whether you are building a Vitamin or a Painkiller? Painkillers have a higher chance of being successful in the market.

If you think that most successful products — Facebook, Twitter, Instagram — are more like Vitamins than Painkillers, then think again. They may have started out as Vitamins, but the itch that is relieved by using the product as dictated by habit puts them in the category of Painkillers. Eventually, your product should be able to address some sort of pain, or better worded, itch — specifically, an uncomfortable feeling that is relieved by action, namely, using your product.

The most successful companies are both Vitamins and Painkillers. If your product is more of one than the other, then a useful exercise would be in determining how to add attributes of the missing tablet. In the rapidly changing tech-world, it is not a choice between the red pill and the blue pill, but a clever mixture of both.

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