预计阅读本页时间：-
1. THE HABIT ZONE
广告：个人专属 VPN，独立 IP，无限流量，多机房切换，还可以屏蔽广告和恶意软件，每月最低仅 5 美元
When I run, I zone out. I don’t think about what my body is doing and my mind usually wanders elsewhere. I find it relaxing and refreshing, and run about three mornings each week. Recently, I needed to take an overseas client call during my usual morning run time. “No biggie,” I thought. “I can run in the evening instead.” However, the time-shift created some peculiar behaviors that night.
I left the house for my run at dusk and as I was about to pass a woman taking out her trash, she made eye contact and smiled. I politely saluted with, “Good morning!” — then caught my mistake. “I mean, good evening! Sorry!” I corrected myself, realizing I was about 10 hours off. She furrowed her brow and cracked a nervous smile.
Slightly embarrassed, I noted how my mind had been oblivious to the time of day. I chided myself not to do it again, but within a few minutes I passed another runner and again — as if possessed — I blurted out, “Good morning!” What was going on?
Back home, during my normal post-run shower, my mind began to wander again as it often does when I bathe. My brain’s autopilot switch turned on and I proceeded with my daily routine, unaware of my actions.
It wasn’t until I felt the nick of the razor cutting my face that I realized I had lathered-up and started shaving. Although it is something I do every morning, shaving was painfully unnecessary in the evening. And yet, I’d done it anyway, unknowingly.
The evening version of my morning run had triggered a behavioral script that instructed my body to carry out my usual, run-related activities — all without mindful awareness. Such is the nature of ingrained habits — behaviors done with little or no conscious thought — which by some estimates, guide nearly half of our daily actions.[xvii]
Habits are one of the ways the brain learns complex behaviors. Neuroscientists believe habits give us the ability to focus our attention on other things by storing automatic responses in the basal ganglia, an area of the brain associated with involuntary actions.[xviii]
Habits form when the brain takes a shortcut and stops actively deliberating over what to do next.[xix] The brain quickly learns to codify behaviors that provide a solution to whatever situation it encounters.
For example, nail biting is a common behavior that occurs with little or no conscious thought. Initially, the biter might start chomping on her cuticles for a reason — to remove an unsightly hangnail, for example. However, when the behavior occurs for no conscious purpose — simply as an automatic response to a cue — the habit is in control. For many persistent nail biters, the unconscious trigger is the unpleasant feeling of stress. The more the biter associates the act of nail chomping with the temporary relief it provides, the harder it becomes to change the conditioned response.
Like nail biting, many of our daily decisions are made simply because that was the way we have found resolution in the past. The brain automatically deduces that if the decision was a good one yesterday, then it is a safe bet again today and the action becomes a routine.
On my run, my brain had associated making eye contact with another person during my run with the standard “Good morning!” greeting, thus I automatically uttered these words no matter how inappropriately timed.
Why Habits are Good for Business
If our programmed behaviors are so influential in guiding our everyday actions, surely harnessing the same power of habits can be a boon for industry. Indeed, for those able to shape them in an effective way, habits can be very good for the bottom line.
Habit-forming products change user behavior and create unprompted user engagement. The aim is to influence customers to use your product on their own, again and again, without relying on overt calls-to-action such as ads or promotions. Once a habit is formed, the user is automatically triggered to use the product during routine events such as wanting to kill time while waiting in line.
However, the framework and practices explored in this book are not one-size-fits-all and do not apply to every business or industry. Entrepreneurs should evaluate how user habits impact their particular business model and goals. While the viability of some products depends on habit-formation to thrive, that is not always the case.
For example, companies selling infrequently bought or used products or services do not require habitual users — at least, not in the sense of everyday engagement. Life insurance companies, for instance, leverage salespeople, advertising, and word-of-mouth referrals and recommendations to prompt consumers to buy policies. Once the policy is bought, there is nothing more the customer needs to do.
In this book, I refer to products in the context of businesses that require ongoing, unprompted user engagement and therefore need to build user habits. I exclude companies that compel customers to take action through other means.
Before diving into the mechanics of how habits are made, we must first understand their general importance and competitive benefits for businesses. Habit formation is good for business in several ways.
Increasing Customer Lifetime Value
MBAs are taught that a business is worth the sum of its future profits. This benchmark is how investors calculate the fair price of a company’s shares.
CEOs and their management teams are evaluated by their ability to increase the value of their stocks — and therefore care deeply about the ability of their companies to generate free cash flow. Management’s job, in the eyes of shareholders, is to implement strategies to grow future profits by increasing revenues or decreasing expenses.
Fostering consumer habits is an effective way to increase the value of a company by driving higher customer lifetime value (CLTV). CLTV is the amount of money made from a customer before she switches to a competitor, stops using the product, or dies. User habits increase how long and how frequently customers use a product, resulting in higher CLTV.
Some products have a very high CLTV. For example, credit card customers tend to stay loyal for a very long time and are worth a bundle. Hence, credit card companies are willing to spend a considerable amount of money acquiring new customers. This explains why you receive so many promotional offers, ranging from free gifts to airline bonus miles, to entice you to add another card or upgrade your current one. Your potential CLTV justifies a credit card company’s marketing investment.
Providing Pricing Flexibility
Renowned investor and Berkshire Hathaway CEO Warren Buffett once said, “You can determine the strength of a business over time by the amount of agony they go through in raising prices.”[xx] Buffett and his partner, Charlie Munger, realized that as customers form routines around a product, they come to depend upon it and become less price-sensitive. The duo have pointed to consumer psychology as the rationale behind their famed investments in companies like See’s Candies and Coca-Cola.[xxi] Buffett and Munger understand that habits give companies greater flexibility to increase prices.
For example, in the free-to-play video game business, it is standard practice for game developers to delay asking users to pay money until they have played consistently and habitually. 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. Selling virtual items, extra lives, and special powers is where the real money lies.
As of December 2013, more than 500 million people have downloaded Candy Crush Saga, a game played mostly on mobile devices. The game’s “freemium” model converts some of those users into paying customers, netting the game’s maker nearly a million dollars per day.[xxii]
This pattern also applies to other services. Take Evernote, the popular note-taking and archiving software, for example. The software is free to use but the company offers upgraded features like offline viewing and collaboration tools for a price — which many devoted users are happy to pay.
Evernote’s CEO Phil Libin shared some revealing insights about how the company turns non-paying users into revenue generating ones.[xxiii] In 2011, Libin published a chart now known as the “smile graph.” With the percentage of sign-ups represented on the Y-axis and time spent on the service on the X-axis, the chart showed that, although usage plummeted at first, it rocketed upward as people formed a habit of using the service. The resulting down and up curve gave the chart its emblematic smile shape (and Evernote’s CEO a matching grin).
In addition, as usage increased over time, so did customers’ willingness to pay. Libin noted that after the first month, only 0.5 percent of users paid for the service; however, this rate gradually increased. By month 33, 11 percent of users had started paying. At month 42, a remarkable 26 percent of customers were paying for something they had previously used for free.[xxiv]
Supercharging Growth
Users who continually find value in a product are more likely to tell their friends about it. Frequent usage creates more opportunities to encourage people to invite their friends, broadcast content, and share through word-of-mouth. Hooked users become brand evangelists — megaphones for your company, bringing in new users at little or no cost.
Products with higher user engagement also have the potential to grow faster than their rivals. Case in point: Facebook leapfrogged its competitors, including MySpace and Friendster, even though it was relatively late to the social networking party. Although its competitors both had healthy growth rates and millions of users by the time Mark Zuckerberg’s fledgling site launched beyond the closed doors of academia, his company came to dominate the industry.
Facebook’s success was, in part, a result of what I call the more is more principle — more frequent usage drives more viral growth. As tech-entrepreneur turned venture capitalist, David Skok points out, “The most important factor to increasing growth is ... Viral Cycle Time.”[xxv] Viral Cycle Time is the amount of time it takes a user to invite another user, and it can have a massive impact. “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 time 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.”
Having a greater proportion of users returning to a service daily, dramatically increases Viral Cycle Time for two reasons: First, daily users initiate loops more often (think tagging a friend in a Facebook photo); second, more daily active users means more people to respond and react to each invitation. The cycle not only perpetuates the process — with higher and higher user engagement, it accelerates it.
Sharpening the Competitive Edge
User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies.
Many entrepreneurs fall into the trap of building products that are only marginally better than existing solutions, hoping their innovation will be good enough to woo customers away from existing products. But when it comes to shaking consumers’ old habits, these naive entrepreneurs often find that better products don’t always win — especially if a large number of users have already adopted a competing product.
A classic paper by John Gourville, a professor of marketing at Harvard Business School, stipulates that, “Many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.”[xxvi]
Gourville claims that for new entrants to stand a chance, they can’t just be better, they must be nine times better. Why such a high bar? Because old habits die hard and new products or services need to offer dramatic improvements to shake users out of old routines. Gourville writes that products that require a high degree of behavior change are doomed to fail even if the benefits of using the new product are clear and substantial.
For example, the technology I am using to write this book is inferior to existing alternatives in many ways. I’m referring to the QWERTY keyboard which was first developed in the 1870s for the now-ancient typewriter. QWERTY was designed with commonly used characters spaced far apart. This layout prevented typists from jamming the metal typebars of early machines.[xxvii] Of course, this physical limitation is an anachronism in the digital age, yet QWERTY keyboards remain the standard despite the invention of far better layouts.
Professor August Dvorak’s keyboard design, for example, placed vowels in the center row, increasing typing speed and accuracy. Though patented in 1932, the Dvorak Simplified Keyboard was written off.
QWERTY survives due to the high costs of changing user behavior. When first introduced to the keyboard, we chicken-peck at the keys one-by-one, usually with just a finger or two. After months of practice, we instinctively learn to activate all our fingers in response to our thoughts with little to no conscious effort, and the words begin to flow effortlessly from mind to screen. But switching to an unfamiliar keyboard — even if more efficient — would force us to re-learn how to type. Fat chance!
As we will learn in chapter five, users also increase their dependency on habit-forming products by storing value in them — further reducing the likelihood of switching to an alternative. For example, every email sent and received using Google’s Gmail is stored indefinitely, providing users with a lasting repository of past conversations. New followers on Twitter increase users’ clout and amplify their ability to transmit messages to their communities. Memories and experiences captured on Instagram are added to one’s digital scrapbook. Switching to a new email service, social network, or photo-sharing app becomes more difficult the more people use them. The non-transferrable value created and stored inside these services discourages users from leaving.
Ultimately, user habits increase a business's return on investment. Higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharpened competitive edge together equal a more powerful bang for the company’s buck.
***
Building the Mind Monopoly
While user habits are a boon to companies fortunate enough to engender them, their existence inherently makes success less likely for new innovations and startups trying to disrupt the status quo. The fact is, successfully changing long-term user habits is exceptionally rare.
Altering behavior requires not only an understanding of how to persuade people to act — for example, the first time they land on a webpage — but also necessitates getting them to repeat behaviors for long periods, ideally for the rest of their lives.
Companies that succeed in building a habit-forming business are often associated with game-changing, wildly successful innovation. But like any discipline, habit design has rules and caveats that define and explain why some products change lives while others do not.
For one, new behaviors have a short half-life, as our minds tend to revert to our old ways of thinking and doing. Experiments show that lab animals habituated to new behaviors tend to regress to their first learned behaviors over time.[xxviii] To borrow a term from accounting, behaviors are LIFO — “last in, first out.” In other words, the habits you’ve most recently acquired are also the ones most likely to go soonest.
This helps explain the overwhelming evidence that people rarely change their habits for long. Two-thirds of alcoholics who complete a rehabilitation program will pick up the bottle, and their old habits, within a year’s time.[xxix] Research shows that nearly everyone who loses weight on a diet gains back the pounds within two years.[xxx]
The enemy of forming new habits is past behaviors, and research suggests that old habits die hard. Even when we change our routines, neural pathways remain etched in our brains, ready to be reactivated when we lose focus.[xxxi] This presents an especially difficult challenge for product designers trying to create new lines or businesses based on forming new habits.
For new behaviors to really take hold, they must occur often. In a recent study at the University College London, researchers followed participants as they attempted to form a habit of flossing their teeth.[xxxii] As one of its findings, the study concluded that the more frequently the new behavior occurred, the stronger the habit became. Like flossing, frequent engagement with a product — especially over a short period of time — increases the likelihood of forming new routines.
Google Search provides an example of a service built upon a frequent behavior that helped create users’ habits. If you’re skeptical that Google is habit-forming (and you are a frequent Google user), just try using Bing. In a head-to-head comparison of the efficacy of an incognito search, the products are nearly identical.[xxxiii] Even if the geniuses at Google have in fact perfected a faster algorithm, the time saved is imperceptible to everyone but robots and Mister Spock. Milliseconds matter, but they don’t hook users.
So why haven’t more Google users switched to Bing? Habits keep users loyal. If a user is familiar with the Google interface, switching to Bing requires cognitive effort. Although many aspects of Bing are similar to Google, even a slight change in pixel placement forces the would-be user to learn a new way of interacting with the site. Adapting to the differences in the Bing interface is what actually slows down regular Google users and makes Bing feel inferior, not the technology itself.
Internet searches occur so frequently that Google is able to cement itself as the one and only solution in the habituated user’s mind. Users no longer need to think about whether or not to use Google, they just do. Furthermore, whenever the company can identify the user through tracking technology, it improves search results based on past behaviors to deliver a more accurate and personalized experience, reinforcing the user’s connection with the search engine. The more the product is used, the better the algorithm gets and thus, the more it is used. The result is a virtuous cycle of habit-driven behavior resulting in Google’s market domination.[xxxiv]
Habit as Strategy
Sometimes a behavior does not occur as frequently as flossing or Googling, but it still becomes a habit. For an infrequent action to become a habit, the user must perceive a high degree of utility, either from gaining pleasure or avoiding pain.
Take Amazon as an example: The e-tailer has its sights set on becoming the world’s one-stop shop. Amazon is so confident in its ability to form user habits that it sells and runs ads for directly competitive products on its site.[xxxv] Customers often see the item they are about to buy listed at a cheaper price and can click away to transact elsewhere. To some, this sounds like a formula for disaster. But to Amazon, it is a shrewd business strategy.
Not only does Amazon make money from the ads it runs from competing businesses, but it also utilizes other companies’ marketing dollars to form a habit in the shopper’s mind. Amazon seeks to become the solution to a frequently occurring pain-point — the customer’s desire to find the items they want.
By addressing shoppers’ price concerns, Amazon earns loyalty even if it doesn’t make the sale, and comes across as trustworthy in the process. The tactic is backed by a 2003 study, which demonstrated that consumers’ preference for an online retailer increases when they are offered competitive price information.[xxxvi] The technique has also been used by Progressive, the car insurance company, to drive over $15 billion of annual insurance sales, up from just $3.4 billion before the tactic was implemented.
By allowing users to comparison shop from within the site, Amazon provides tremendous perceived utility to its customers. Although shopping on Amazon may not occur as frequently as searching on Google, the company solidifies its place as the default solution to customers’ purchasing needs with each successful transaction. In fact, people are so comfortable comparison shopping on Amazon that they frequently use the company’s mobile app to check prices when standing in the aisles of real stores — often making a purchase from inside a competing retailer.[xxxvii]
In the Habit Zone
A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency (how often the behavior occurs) and perceived utility (how useful and rewarding the behavior is in the user’s mind over alternative solutions).
Googling occurs multiple times per day, but any particular search is negligibly better than rival services like Bing. Conversely, using Amazon may be a less frequent occurrence, but users receive great value knowing they’ll find whatever they need at the one and only “everything store.”[xxxviii]
As represented in figure 1, a behavior that occurs with enough frequency and perceived utility enters the Habit Zone, helping to make it a default behavior. If either of these factors falls short and the behavior lies below the threshold, it is less likely that the desired behavior will become a habit.
Note that the line slopes downward but never quite reaches the perceived utility axis. Some behaviors never become habits because they do not occur frequently enough. No matter how much utility is involved, infrequent behaviors remain conscious actions and never create the automatic response that is characteristic of habits. On the other axis however, even a behavior which provides minimal perceived benefit can become a habit simply because it occurs frequently.
Figure 1
This concept is meant to be a guiding theory and the scale of the illustration is intentionally left blank. Unfortunately for companies, research thus far has not found a universal timescale for turning all behaviors into habits. A 2010 study found that some habits can be formed in a matter of weeks while others can take more than five months.[xxxix] The researchers also found that the complexity of the behavior and how important the habit was to the person greatly affected how quickly the routine was formed.
There are few rules when it comes to answering “how frequent is frequent enough?” and the answer is likely specific to each business and behavior. However, as the previously mentioned flossing study demonstrates, we know that higher frequency is better.
Think of the products and services you would identify as habit-forming. Most of these are used daily, if not multiple times per day. Now, let’s explore why we use these products so frequently.
***
Vitamins vs. Painkillers
It’s never been easier to launch a new product or service, yet most new endeavors fail. Why? Products fail for a variety of reasons: Companies run out of funding, products enter markets too early or too late, the marketplace doesn’t need what companies are offering, or founders simply give up. Just as failure has many causes, success too can be attributed to a variety of factors. However, one thing is common to all successful innovations — they solve problems. That may seem obvious, but understanding the kind of problem a new product solves can be a topic of much debate.
“Are you building a vitamin or painkiller?” is a common, almost clichéd question many investors ask founders eager to cash their first venture capital check. The correct answer, from the perspective of most investors, is the latter: a painkiller. Likewise, innovators in companies big and small are constantly asked to prove their idea is important enough to merit the time and money needed to build it. Gatekeepers such as investors and managers want to invest in solving real problems — or, meeting immediate needs — by backing painkillers.
Painkillers solve an obvious need, relieving a specific pain and often have quantifiable markets. Think Tylenol, the brand name version of acetaminophen, and the product’s promise of reliable relief. It’s the kind of ready-made solution for which people are happy to pay.
In contrast, vitamins do not necessarily solve an obvious pain-point. Instead they appeal to users’ emotional rather than functional needs. When we take our multivitamin each morning, we don't really know if it is actually making us healthier. In fact, recent evidence shows taking multivitamins may actually be doing more harm than good.[xl]
But we don't really care, do we? Efficacy is not why we take vitamins. Taking a vitamin is a "check it off your list" behavior we measure in terms of psychological, rather than physical, relief. We feel satisfied that we are doing something good for our bodies — even if we can’t tell how much good it is actually doing us.
Unlike a painkiller, which we can not function without, missing a few days of vitamin popping, say while on vacation, is no big deal. So perhaps managers and investors know best? Perhaps building painkillers, not vitamins, is always the right strategy.
Not so fast.
Let’s consider a few of today’s hottest consumer technology companies — say Facebook, Twitter, Instagram, and Pinterest. What are they selling — vitamins or painkillers? Most people would guess vitamins, thinking users aren’t doing much of anything important other than perhaps seeking a quick boost of social validation. After all, think back to before you first started using these services. No one ever woke up in the middle of the night screaming, “I need something to help me update my status!”
But like so many innovations, we did not know we needed them until they became part of our everyday lives. Before making up your mind on the vitamin or painkiller debate for some of the world’s most successful tech companies, consider this idea: A habit is when not doing an action causes a bit of pain.
It is important to clarify that the term “pain,” as it is frequently used in business school and marketing books, is somewhat hyperbolic. In reality, the experience we are talking about is more similar to an “itch,” a feeling that manifests within the mind and causes discomfort until it is satisfied. The habit-forming products we use are simply there to provide some sort of relief. Using a technology or product to scratch the itch provides faster satisfaction than ignoring it. Once we come to depend on a tool, nothing else will do.
My answer to the vitamin or painkiller question is that habit-forming technologies are both. These services seem, at first, to be offering nice-to-have vitamins, but once the habit is established, they provide an ongoing pain remedy.
Seeking pleasure and avoiding pain are two key motivators in all species. When we feel discomfort, we seek to escape the uncomfortable sensation. In the next chapter, we will explore how emotions, often negative ones, trigger users to reach for solutions. But for now, the important thing to remember is that habit-forming products create associations in users’ minds — and that the solution to their pain may be found in your product’s use.
We’ll discuss the morality of manipulation in chapter eight; however, it is worth noting that although some people use the terms interchangeably, habits are not the same things as addictions. Addictions are persistent, compulsive dependencies on a behavior or substance. Addictions, by definition, are self-destructive. Thus, it is irresponsible to make products that rely on creating and maintaining user addiction, since doing so would mean intentionally harming people.
A habit, on the other hand, is a behavior that can have a positive influence on a person’s life. Habits can be healthy or unhealthy, and you likely have several helpful habits you carry out throughout your day. Did you brush your teeth today? Take a shower? Did you express gratitude by saying “thanks?” Or in my case, say “Good morning” while on an evening jog? These are common behaviors done with little or no deliberation — they are habits.
***
Diving Into The Hook Model
Ready to learn more about creating positive user habits? Read on to gain a deeper understanding of the Hook Model: A simple yet powerful way to help your customers form habits that connect their problem with your solution.
In the next chapters, we dive into each phase of the Hook Model. Along the way, I will provide examples you can use in the design of your own product or service. By learning a few fundamentals of how the mind works, you will increase your odds of building the right product faster.
By progressing users through the four steps of the Hook Model, — trigger, action, variable reward, and investment — hooks form habits.
***
Remember and Share
- For some businesses, forming habits is a critical component to success, but not every business requires habitual user engagement.
- When successful, forming strong user habits can have several business benefits including: higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharper competitive edge.
- Habits can not form outside the “Habit Zone,” where the behavior occurs with enough frequency and perceived utility.
- Habit-forming products often start as nice-to-haves (vitamins) but once the habit is formed, they become must-haves (painkillers).
- Habit-forming products alleviate users’ pain by relieving a pronounced itch.
- Designing habit-forming products is a form of manipulation. Product builders would benefit from a bit of introspection before attempting to hook users to make sure they are building healthy habits, not unhealthy addictions (more to come on this topic in chapter eight).
***
Do This Now
If you are building a habit-forming product, write down the answers to these questions:
- What habits does your business model require?
- What problem are users turning to your product to solve?
- How do users currently solve that problem and why does it need a solution?
- How frequently do you expect users to engage with your product?
- What user behavior do you want to make into a habit?
