How to create habit-forming products

What do Duolingo, Peloton and Starbucks all have in common? They've all mastered the art of turning products into habits.

This post runs though Nir Eyal's must-read 'Hooked', a company-building bible describing habit-forming best practice from some of the world's most successful products.

We'll focus on the low-hanging fruit most relevant for MVPs and prototypes; actionable steps & hacks, 3rd party tools, key questions to think about, and case studies from our own clients to help you make fast improvements quickly without breaking the bank.

What is a habit?

Habits are actions we take without thinking. Our brain does this to conserve energy, by not engaging our conscious decision-making capability before triggering every single action. When you pick up your toothbrush, you don't consciously think about what needs to happen next. Learning how to leverage this internal auto-pilot is an incredibly powerful tool when developing products.

Why do companies invest so much money in creating habit-forming products?

Simply put, habit-forming products generate a higher LTV (lifetime value). User retention is significantly higher, dwell time is longer, average spend is higher, users return for free, are more likely to refer and are retained for longer even if competitor's products are better. Genuine habits are hard to break!

How do normal behaviours turn into habits?

Habits form when we repeatedly perform a behaviour, and our brains associate it with an emotion. The first time a user jumps on their Peloton bike, they do so consciously. You've come back from work, you’re tempted to just flop on the couch but you promised yourself that you'd exercise 3 times this week, so on you get. Our brain remembers this behaviour (using Peloton), and slowly but surely associates it with the positive emotions we feel as a result (achievement, belonging to a community etc.). 

Slowly but surely, our mind will unconsciously draw us to that behaviour in future. Brain imaging shows that when a habit is established, the part of our brain responsible for reward (the nucleus accumbens) is activated when we anticipate the behaviour, not just when we receive it.

Easy right? Not quite, there's a reason around 55% of us drop our New Year's Resolution in a year and Peloton's annual retention is 90%+.

How to build habit-forming products

1. Understand your users' "why"

• If we want our users to associate our product with an emotion, we need to understand them.
• When speaking to your users, keep asking why. At the end of this series of questions, you’ll find the emotional driver behind the need to use the product.
• Not all users are the same, but when time/resources are tight you shouldn't need more than 5 interviews before you start identifying the emotional drivers behind your user base.
• At Blue Mongoose, we use SuperNormal to pull out the highlights from our user interviews so we can stay engaged without needing to take notes.
  
  

2. Design a trigger

• Before behaviours become habits, they need to be triggered.
• For MVPs and early-stage products, you'll need to leverage external triggers such as push notifications, emails, marketing etc. These channels (particularly those that are paid) are an important first step and can provide valuable data to iterate on, but they shouldn’t be relied upon entirely to create truly habit-forming products. 
• The holy grail of habit-forming products is to use internal triggers, leveraging the emotional needs we identified in step 1.
• At Blue Mongoose, we add the Onesignal plugin to our Bubble products (it takes less than an hour to get up and running). We deliver targeted notifications to our users, measure open rates and can start to verify our assumptions in step 1 instantly.
  

3. Streamline the path from trigger to reward

• Lowest friction products are typically the best at converting behaviours to habits.
• Every login, click and scroll that separates your user from that emotional need should be scrutinised.
• We implement the Hotjar plugin in all our products from day 1; it maps user journeys and creates heatmaps to help us identify sticking points.

4. Deliver what you promised

• After your user has responded to your perfectly designed trigger and seamlessly moved through your user flow, it is important to provide them with the benefit they expect. Consistently.
• Remember, behaviours become habits not from 1 fantastic user experience, but a series of them.
• This will be different for each product, but the route there is likely the same: a commitment to experimentation and user interviews.
• Try to analyse your most engaged users (try the top 5%). How do they use your product? How can we get the second 5% to that same level, or find users that are similar to those power users?
• Amplitude is a good tool for this, but we also build custom product dashboards for our clients.

Bonus: Variable rewards

• Humans like uncertain rewards. There is a reason we like to receive wrapped presents, and they are proven to be an effective way to turn behaviours into habits.
• Implementing an element of community is an effective, quick way to implement this uncertainty for early-stage businesses. The actions of other users are hard to predict and can be light on development time to implement.
• Peloton has done an amazing job at creating a sense of community in their users, but behind the scenes, we see the same impact in products like Figma. Their commenting and tagging features are great for collaboration, but have a hidden emotional payoff as well.

What does success look like and how do we measure it?

• The brands doing this brilliantly are using internal triggers and leveraging users’ emotional needs:
• Linkedin: Personally, I check it far too much, especially when I’m in need of a quick distraction. I've turned off notifications but still need to block it for chunks of the day so that I remain productive!
• Instagram: they’re expert at playing on our need for social validation and human connection.
• Peloton: their users get on a  bike for the exercise but stay for that feeling of self-improvement, achievement and community.
• To see if you’re achieving a similar result, try tracking KPIs that relate to users visiting your product without being prompted. 

Some closing questions

Can every product be habit-forming?

• Is B2B payroll software likely to be as habit-forming as a social media app? No, but applying these tips and tricks to less sexy, less frequently used products that don't naturally scream 'habit-forming' can still decrease churn and increase positive user experiences.

Should every product be habit-forming?

• Habit-forming is a powerful tool, and can be used to encourage behaviours that have both positive and negative effects for our users. There are plenty of examples of both.
• As founders, investors and product owners of fast-growing companies, it's important to think carefully about the impact of what we build!

Thank you for reading! Do you know anyone launching products? Please forward the link to this article if you think they would find it useful.