“Every company is now a tech company.” The statement sounds like a pandemic outcome that came as a result of forced adoption of Zoom meetings, Slack DMs, and file-sharing via Google Drive.
But in fact, it’s a headline from a 2018 Wall Street Journal article. It’s also a 2016 headline in Techcrunch. It’s also an extension of the ideas shared in Marc Andreesen’s famous 2011 essay about software eating the world. For the last two decades, we have made technology part of our everyday lives.
And now, while every company may be a tech company, the ones who will lead the next 20 years are those who understand how to hook their users.
“It used to be that people thought that Facebook, Instagram, and Slack got lucky,” Nir Eyal tells us in an interview. “Turns out that’s not the case. They engineer this stuff. They understand what makes you click, and what makes you tick better than you understand yourself.”
The author, consultant, entrepreneur, and professor is an expert on manufacturing desire to encourage a user to return to a product or service using what he coined the “Hook Model.” He wrote a best-selling book on the topic, and shares the principles of it on his website.
“As infinite distractions compete for our attention, companies are learning to master new tactics to stay relevant in users’ minds and lives,” Eyal writes on his website.
How the Hook Model manufactures desire
In short, Eyal says a habit-forming product has to hit four steps:
- The first step is a trigger that convinces someone to first use a product or service
- Next, an action must be taken by the consumer to satisfy the trigger
- From there, they need to experience a reward for having engaged with the product or service
- And finally an investment is made that embeds the importance of the experience or product in the user’s psyche
The intermittent reward leaves the user wanting more. Variable rewards have been found to have the most success in building habits in people, with slot machines being a good example of “hooking” a subject.
The final step, Eyal clarifies, is not about a consumer opening their wallets to spend, but instead performing actions that improve the experience and bring them back — inviting friends or building virtual assets will encourage the user to build a commitment to the product. These investments can make the trigger more engaging, the action easier, and the reward of dopamine more exciting every time they return.
“It’s absolutely essential that we understand consumer psychology, and that we take it very seriously,” Eyal says. “Because, if we don’t, our competition will.”
COVID-19 accelerated the digital transformation of every business, and dominance of technology in our lives. With many people now having new digital habits that were formed during the pandemic, there is a lot we can now reflect on and incorporate from the Hook Model.
In a post-pandemic world, leadership teams can use it to build closer bonds with a remote workforce, HR leaders can deepen employee engagement, and sales teams can build relationships with new customers.
The key to being successful with the Hook Model, Eyal says, is to plan ahead, pay attention to the consumerization of B2B software, and be ready for a future world without screens.
Psychology matters more than features when you’re starting
To tap into instinctual user behaviours, it’s important to think about how your customers’ habits affect their day-to-day lives, says Eyal.
Before you commit to code or design the user experience, you must understand the psychology of your user.
“Customers can say one thing and most of the time they’re going to do something else,” he says. “So it’s absolutely essential that we not only understand their articulable needs, but also their in-articulable needs by looking at psychology research.”
Nailing the four steps of the Hook Model is key to success, Eyal says, and the more times you can send people through that user experience, the more likely you are to change consumer behaviour for good.
Eyal points to social media apps and games as examples of the Hook Model done well, but he believes there’s room for improvement in healthcare, fintech and within many Software-as-a-Service (SaaS) products.
“It’s absolutely essential that customers form habits with the product,” says Eyal.
The consumerization of B2B software is not to be underestimated
Many of us spend a lot of time using software and apps in our personal lives, and as such, we have developed habits and expectations in how we want digital products to function.
That means when we show up at work, we expect our office tools to function as well as our personal software. People have become accustomed to flexibility, choice and user experience.
“With SaaS products — particularly catering to the enterprise — we went from people saying, ‘You have to use this because your boss said so,’ to ‘That doesn’t cut it anymore’,” Eyal says. “If you make crappy software, or inflict crappy software on your users or your employees — I’ve heard of people just quitting,” Eyal says. “[They say], if you make me use this terrible software, I’m out of here, I can’t do this, it’s driving me crazy.”
Eyal says this is especially important given the labour shortages that have impacted every industry.
“I’ve heard stories of complete company failures, where IT professionals will walk off the job because management says they’re going to use software with terrible design, with terrible UX,” he says. “It’s no longer acceptable to just stuff bad software in front of people’s faces and expect them to be happy and use it.”
Preparing for a world without screens
Companies are also adapting to the rise of voice-centric apps and shrinking screens, which introduces both challenges and opportunities when deciding which features to build into a product.
“As technology becomes more pervasive, it’s also becoming more persuasive,” Eyal says. “As we went from desktop, to laptops, to mobile devices, to wearable devices, now the screen is disappearing altogether. That means that habits become increasingly important.”
People can now use their voice to communicate with nearly everything their phone can connect to — messaging apps, home lighting, garage door openers, vehicles and more. Forecasts suggest that by 2024 “the number of digital voice assistants will reach 8.4 billion units – a number higher than the world’s population.”
So what is a company to do in the face of growing use of voice?
“The same principles apply — trigger, action, reward, investment,” Eyal says, referencing the Hook Model. “I think it just becomes even more important.”
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