Hooked : How to build habit-forming products by Nir Eyal - Book Summary

 

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Hooked
79% of smartphone owners check their device within fifteen minutes of waking up every morning - Nir Eyal

Big internet businesses like Google and Facebook are immensely successful not simply because of their marketing techniques, but also because they have successfully tapped into the right nerves of their consumers. Users keep scrolling and swiping constantly because their products are so fascinating. They've figured out how to utilize human behaviors and emotions to stay relevant in the minds of users.

For instance, when you need to find information, Google is likely to be the first thing that comes to mind. When you want to buy something, you usually use Amazon.

Hooked users become brand evangelists - a megaphone for your company, bringing new users at little or no cost - Nir Eyal.

The Hook Model is a four-phase technique described in this book.

•Trigger
•Action
•Variable reward
•Investment

The Habit Zone

Habits are "automatic acts driven by situational cues": activities we perform without thinking.

Businesses benefit from user habits because they improve user engagement without the need for an external trigger.

Companies benefit from user behaviors in several ways:

The increased lifetime value of customers.
CLTV is the amount of money that is made by a customer before he switches to a rival or discontinues the use of the product.

Flexibility in pricing
Because repeat customers are more sensitive to price changes, the product's price may be adjusted accordingly.

Accelerated development
Users that enjoy the product also tell their friends about it, resulting in viral growth.

Increasing the competitive advantage
More than anything else, user behaviors provide a product with a competitive advantage. It elevates the entry barrier for newcomers.

When you don't do something, it causes you agony.

Habit-forming items begin as nice-to-haves, but once a habit is established, they become essential and a part of your routine.

Trigger
Triggers encourage users to engage with the product. These triggers lead to the formation of habits over time.

These external triggers instruct the user to take specific actions, and the user develops their internal triggers. The extrinsic cues are primarily visual. Any sponsored advertisement, a simple phone notification, or social media interactions can be used as triggers. There are four different kinds of external triggers.

Triggers For Sale
Advertising, search engine marketing, and other paid channels are examples.

Triggers earned
Media relations and public engagement on social media platforms are examples.

Triggers in Relationships
Word-of-mouth advertising is one of them.

Triggers You Own
App alerts and opt-in newsletters are examples.

Internal triggers are psychological and originate from the inside. They arise when a product is consistently connected with specific feelings or thoughts. When you're bored, for example, you go to Instagram and start browsing.

Action
The trigger instructs the user to take a certain action. It would be pointless if it did not lead to action. As a result, action must be simpler than thought.

To achieve the intended behavior, adequate motivation, the ability to finish the activity, and an effective trigger are required.

Motivation + Ability + Trigger = Behavior

Motivation 
Humans are driven by pleasure and avoidance of suffering. Motivation is tough to develop or enhance. As a result, the product should appeal to basic human drives such as social approval and the need for pleasure.

Ability
It is the ability to carry out a specific action.
The product should determine the user's motivation and map out the steps required to fulfill the tasks. It should make every effort to decrease the number of steps required to execute the activities. This increases the product's acceptability.

Trigger
Something that starts a process.

4 heuristics or mental biases that impact user decisions:

The Scarcity Effect - The illusion of scarcity has an impact on the product's perceived worth.

The Framing Effect - To make rapid judgements, the mind makes conclusions depending on the surroundings.

The anchoring effect - When making a choice, people frequently attach to a single piece of information.

The Endowed Progress effect - A psychological phenomenon that boosts motivation when people think they are getting closer to achieving a goal.

Variable Reward
The user anticipates a reward after finishing the action.

To hook a user, the incentives must be flexible. If a user can predict the reward, he or she may lose interest in the product. User engagement is increased when incentives are variable.

Variable reward types include:

The Tribe's Benefits
When a reward is linked to social acceptability, approval, or significance, it piques the user's attention. When consumers see someone being rewarded for a certain behavior, they are more likely to change their behavior. This is particularly effective for social media products.

Self-satisfaction
We want to improve and become more competent at things. The aim becomes considerably more intriguing when a changeable reward is added. When users gain badges on competitive websites, they return to earn more.

"Finite variability experiences become less interesting over time because they become predictable."
Understanding what your audience values can help you enhance user engagement.

Investment
Users must invest in the product after receiving the reward to establish stronger mental connections. Their time, money, effort, or social connections might all be put to good use. The more time and effort people put into a product or service, the higher its value.

Users place a far higher value on their work than on that of others of comparable quality. The IKEA effect is another name for this. IKEA furniture must be self-assembled to be more appealing than furniture that has already been constructed.

People aim to maintain consistency with their previous actions. As a result, if consumers agree on one action, requesting another becomes easy.

We stay away from cognitive dissonance. We gradually modify our view of something we used to dislike, such as drinking alcohol, as a result of societal pressure.

All of this leads to rationalization or changing our attitudes and ideas to adapt psychologically. Rationalization allows us to offer explanations for our actions, even if those justifications were created by others.
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