HOOKED How to Build Habit-Forming Products - NIR EYAL - 4. Variable Reward

VARIABLE_REWARD.md

HOOKED How to Build Habit-Forming Products - NIR EYAL

4. Variable Reward

Variable reward phase: in which you reward your users by solving a problem, reinforcing their motivation for the action taken in the previous phase

Understanding Rewards

The study revealed that what draws us to act is not the sensation we receive from the reward itself, but the need to alleviate the craving for the reward.

Rewards of the Tribe, the Hunt, and the Self

Habit-forming products utilize one or more of three variable reward types: the tribe, the hunt, and the self

Rewards of the Tribe

Driven by our connectedness with other people

• Social rewards
• Rewards of the tribe

Our brains are adapted to seek rewards that makes us feel accepted, attractive, important, and included.

Social learning theory: the power of modeling and ascribed special powers to our ability to learn from others. People who observe someone being rewarded for a particular behaviour are more likely to alter their own beliefs and subsequent actions.

This technique works well when people observe the bahaiour of people most like themselves or who are slightly more experienced.

1. Facebook

• Logging in: endless stream of content is a reward for visitors
• Like/Comment: reward for content's creators

2. Stack Overflow

• voting the response up or down: reward for responders
• point, levels, earn badges: rewards for questioners and responders
• Software engineers find satisfaction in contributing to a community they care about

3. League of Legends

• Honor Points: encourage positive behaviour and eliminate trolls

Rewards of the Hunt

The need to acquire physical objects, such as food and other supplies that aid our survival, is part of our brain's operating system.

1. Machine Gambling

• Everybody knows "The house always wins"
• Yet gambling industry continues to thrive

2. Twitter, 3. Pinterest

• Endless feed: the UI makes for a compelling reward of the hunt

Rewards of the Self

We are driven to conquer obstacles

The rewards of the self are fueled by "intrinsic motivation" as highlighted by the work of Edward Deci and Richard Ryan. Their self-determination theory espouses that people desire, among other things, to gain a sense of competency. Adding an element of mystery to this goal makes the pursuit all the more enticing.

1. Video Games

• Players seek to master the skills: Leveling up, unlocking special powers, seeing progression and completion

2. E-mail

• "You are done" message: Feeling of completion and mastery

3. Codecademy

• Interactive lessons: deliver immediate feedback
• Competency level: users work to advance through levels, mastering the curriculum
• Turning a difficult path into an engaging challenge

Important Considerations for Designing Reward Systems

Variable Rewards Are Not a Free Pass

A&A sites

• Mahalo: Real money as a reward

  • Over time, users began to lose interest
  • People like money, but if they want monetary rewards, they work

• Quora: Social Rewards

  • gamification - points, badges, leaderboards

Only by understanding what truly matters to users can a company correctly match the right variable reward to their intended behaviour.

Rewards must fit into the narrative of why the product is used and align with the user's internal triggers and motivations

Maintain a Sense of Autonomy

• Quora: Enabled view feature - you can see each user's viewing question history (bad)
• "But you are free to accept or refuse.": The magical phrase a stranger asks for bus fare. It doubled the amount people gave (good)
  • "But you are free" disarms our instinctive rejection of being told what to do
• MyFitnessPal: if you forget logging, it's useless. The app forces you to adopt a weird new behaviour - calorie tracking (bad)
• Fitcracy: having its own online community, encouraging each other - Social Acceptance - develops new habits (good)

Companies that successfully change behaviours present users with an implicit choice between their old way of doing things and a new, more convenient way to fulfill existing needs.

Beware of Finite Variability

• FarmVille: They produced multiple ~ville games
  • Players had lost interest, finite variability, an experience that becomes predictable after use

Experiences with finite variability become less engaging because they eventually become predictable.

Studio model

Deep-pocketed company provides backing and distribution to a portfolio of movies or games, uncertain which one will become the next mega-hit

Infinite variability

YouTube, Facebook, Pinterest, and Twitter all leverage user-generated content

Which Rewards Should You Offer?

Giving users what they want is not enough to create a habit-forming product. The feedback loop of the first three steps of the Hook - trigger, action, and variable reward

Do this now

• Speak with five of your customers in an open-ended interview to identify what they find enjoyable/encouraging (...)
• Review the steps your customer takes to use your project or service habitually (...)
• Brainstorm three ways your product might heighten users' search for variable rewards using:
  1. Rewards of the tribe - gratification from others
  2. Rewards of the hunt - material goods, money, or information
  3. Rewards of the self - mastery, completion, competency, or consistency