You’re familiar with the phrase, “A creature of habit.” Yet, as we strive to disrupt industries, take out the competition and launch innovative new products, we forget the power of habit.
Think about what dish soap is sitting by your sink or under the counter. When is the last time you put serious thought into what dish soap to buy? What about your toothbrush? Toothpaste?
We buy the dish soap we buy out of habit. Of course, habits aren’t only affecting the promotion and sale of household cleaning supplies and toiletries. They’re affecting every decision we make, every decision your visitors make, whether we realize it or not.
What Do Habits Have to Do with Conversion Rate Optimization?
When most people think of the word “habit”, they think of something they do over and over again. As Nir Eyal, author of Hooked: How to Build Habit-Forming Products and founder of Habit Summit (March 22nd, 2016), explains, it’s a little more complex than that…
For example, Ann Graybiel, an MIT neuroscientist, began exploring habits over a decade ago. She put rats into a T-shaped maze with chocolate waiting for them at one end. When the rat was released into the maze for the first time, it would slowly move down the main aisle and sniff / scratch the walls. It could smell the chocolate, but it didn’t know how to find the chocolate.
While it didn’t seem like the rats were putting in much effort to actually find the chocolate, the equipment Ann used to track their brain activity told a different story. Their brains were in overdrive as they slowly sniffed / scratched.
So, she ran the experiment again and again and again. Eventually, the rats stopped sniffing / scratching and began speeding through the maze. However, as the rats’ ability and speed increased, their brain activity decreased. Ann’s equipment was showing a huge decline in mental activity.
Why? Because navigating the maze and finding the chocolate became a habit, so the rats had to think about finding the chocolate less and less. This entire process is called chunking and we rely on chunks every single day. Chunks can be a simple sequence of actions or a sequence so complex you’re surprised a habit could have formed at all.
Think about your habits. They might include…
- You make the bed every morning.
- You make yourself breakfast.
- You drive your usual route home from work.
- You brush your teeth.
- You “get ready for bed”.
These actions require very little, if any, conscious thought. If you’re thinking about something important, you can concentrate on it fully while performing these routines. Why? Because your actions are merely repetitions.
We all have hundreds of habits, even Nir…
Why Do Habits Matter?
So, why do habits matter to optimizers? Because habits drive decision-making. The more you understand about human (i.e. consumer) psychology, the more visitors you will be able to convert into buyers.
As optimizers, we’re focused on building products and sites that people will find valuable, that will compel people to perform our most wanted action. Consumer psychology, which habits are a huge part of, helps us do that…
To summarize, there are three types of products / sites:
- Products / Sites created listening to the HiPPO (highest paid person’s opinion).
- Products / Sites created listening to the customer.
- Products / Sites created listening to consumer psychology, which tells you what the customer is not willing or able to.
Always strive for that third type of product / site.
When you find out that you’re expecting a baby, your buying habits change in two ways. First, you begin buying more. You need an entire list of essentials before you can welcome a new baby into the world. And after the baby arrives? Well, not much changes on the buying front.
Second, your habits become more flexible. It’s a major point of change, so you’re more likely to switch brands, change your routine, etc.
Of course, most companies know this, especially those in the eCommerce space. That’s why the moment a couple have a new baby, companies use public birth records to send them offers and incentives. By then, however, it’s often too late.
Target wanted to identify women in their second trimester, which they believed is when most women begin buying new things.
Target had two options:
- They could use their Baby Shower Registry.
- They could use the unique shopper codes they assign to each person to identify certain behavioral patterns that indicate pregnancy.
They chose to start with the former and move on to the latter. After analyzing the data, Andrew finally began to notice some patterns. Expectant mothers buy lots of lotion and supplements, they found. Eventually, they could make statements like, “When someone suddenly starts buying X and Y, along with A and B, they could be getting close to delivery.
Andrew then began assigning shoppers “pregnancy prediction” scores. The data was so specific that he could estimate a woman’s due date without ever having met her. Of course, that allowed Target to send coupons based on each stage of pregnancy…
How Habitual Is the Average Person?
Even if you don’t believe you’re a habitual person, you’re a habitual person.
It’s not just Dan Ariely and Kahneman who argue that the majority of our decisions are driven by subconscious factors. In fact, CMO.com sent out a survey and more than 85% of respondents believe that the majority of factors and cues driving decision-making are subconscious.
If you think B2B is exempt from this, you’re wrong. Nearly 85% of respondents believe that habituated buying decisions are just as relevant to B2B marketing as B2C marketing. According to CMO.com, other studies are reporting that business people, just like you, display many of the same buying habits as consumers.
A study from Duke University found that roughly 45% of the choices you make every day are due to habits, not conscious decision-making.
Habit isn’t just the reason many people still smoke or don’t stay in shape. Habit is what secretly drives buying decisions.
How Are Habits Formed?
When dealing with habits, you have two options: create a new habit or change an existing habit.
Create a New Habit
This is perhaps the most obvious and popular option. You want to create a product or service that creates a new habit. It’s what the concept of growth hacking is founded on.
The model for creating a new habit, created by Nir, is simple to understand, but difficult to execute effectively. Take a look at the Hook Model…
As you can see, there are four different steps: trigger, action, reward, and investment. To create a new habit, you must first perfect each step. If even one step is weak, you’ll fall short of creating a new habit.
The trigger is the cue that leads the visitor to trying the product or service. You can use either an external or internal trigger. An external trigger is an environmental trigger. An internal trigger is an emotional trigger.
For example, Instagram created an external trigger by having their visitors’ perfectly filtered images flood existing social media networks like Twitter and Facebook.
The action is the task you want the visitor to perform. It must be presented in its most basic form so that it’s as simple as possible to perform. Of course, action requires ability and motivation. Most marketing efforts are focused on creating motivation, on making people want a product. Improving ability (i.e. making the action simple) is, sadly, less emphasized.
When the action is complete, you must reward the visitor. Since the brain is so fond of surprise, variable and unexpected rewards are especially effective. There are three different types of rewards: social rewards (e.g. Facebook likes, acceptance), monetary rewards, and achievement rewards (e.g. mastery, competency, recognition).
After you’ve given the visitor a reward, you have to get them to invest something themselves. If they invest, they are more likely to restart the process because the investment “loads” the next trigger and the investment feels like a commitment.
Investment can be anything from time and money to effort and social capital.
Your goal as an optimizer looking to create a new habit is to send your visitors through those four steps as quickly and as frequently as possible.
Change an Existing Habit
Here’s Nir to explain why the idea of habits lasting “for forever and ever” is ridiculous, no matter how powerful they can be…
So, yes, it is possible to change a visitor’s habits. But it won’t be as simple as getting your visitors to do something for 21 days.
Of course, some habits are more difficult to change than others. Charles Duhigg, author of The Power of Habit, explains…
According to Charles, the more your visitors think about a habit, the easier it will be to change that habit. Why? Because that indicates that there is still a good deal of conscious thought being applied to the habit. It might be an early stage habit or a less frequently triggered habit, for example.
Nir offers a real solution for optimizers looking to change visitor habits…
Humans want to get from the trigger to the reward as quickly as possible. People develop habits based on what they believe is the fastest way to get from the trigger to the reward. If you can reduce the time it takes to get from that trigger to that reward, you can change the existing habit.
Now, when Charles explains habits, he uses a three part cycle…
According to Charles, all cues fall into one of five categories…
- Time of day
- Particular place
- Particular emotion
- Presence of particular people
- Ritualized behavior
Once the brain receives the cue, it launches the routine. The reward comes when the routine is finished successfully. (Do you ever wonder why you feel so much pride after you finish cleaning the house?)
If you want to change (or eliminate) a habit, you must focus on each of the three parts of the cycle…
How to Measure and Analyze Habit Formation
Traditionally, optimizers have been taught to optimize for the initial conversion. Your goal is to get visitors in and get their money before they decide to leave. Instead, you have to begin optimizing for retention and habit formation, which requires a shift in thinking…
Once you’ve changed your mindset, you can begin focusing on the effectiveness and frequency of the four steps…
So, to summarize…
- If you’d rather rely on prompted user engagement, just stick to advertising, SEO, social media, email marketing, etc.
- If you’re looking for unprompted user engagement, which is what growth hacking is all about, you need people checking in with you at least once a week.
- Identify your weaknesses and optimize the four steps of the Hooked Model to improve user engagement frequency.
3 Steps to Changing Existing Habits
Before you dive into creating a new habit, try changing existing habits to include your product. It’s a three step process: identify loops, identify your place, and identify points of flexibility.
1. Identify Cue-Routine-Reward Loops
Here’s a visual representation of the three part cycle Charles uses…
Your job as an optimizer is to identify as many of these loops that relevant to your product as possible. You can conduct qualitative research (i.e. user testing and 1-on-1 customer interviews) to help with the identification process.
Eventually, you’ll have a long list of loops. For best results, record these loops in a spreadsheet. Obviously, note the specific cue, routine and reward. Also note how frequently the loop is used.
2. Analyze the Loops and Improve Them
Analyze your list of loops and identify the 2-3 loops that are most relevant to your product. You can develop different messaging and conduct further audience research for each.
Your goal is to figure out how you can improve those loops. Often, this will require further qualitative research. Why? Because, as Febreze discovered, an incomplete understanding of existing habit loops can be detrimental.
Case Study: Febreze
Originally, Febreze launched two different TV ads. One showed Febreze removing the smell of cigarette smoke from clothes and the other showed Febreze removing the smell of pets on furniture. Sales were minimal.
Why? The marketing team realized that people weren’t aware of the bad smells plaguing their homes. Smokers don’t notice the smell of cigarette smoke after a while. Dog owners slowly stop noticing the smell of their furry friends.
The cue was the bad smell and the reward was a fresh-smelling home. People didn’t notice the bad smells and thus, thought they already had fresh-smelling homes.
The team turned to in-person interviews. They visited a woman who keeps a tidy home and uses Febreze after she is finished cleaning a room. During the interview, they realized that cleaning habit loops already existed.
Instead of creating a new habit, they needed to leverage existing habits. After analyzing existing cleaning loops, they decided that Febreze was most effective as part of the reward. Febreze was part of the “mini celebration” after successfully cleaning a room.
So, they created new ads that showed various cleaning loops with Febreze in the reward phase. Within two months, sales doubled. After a year, the Febreze had brought in $230 million. Today? They earn well over $1 billion a year.
3. Identify Points of Flexibility
Finally, you have to identify points of habit flexibility. If you recall, pregnancy is a point of habit flexibility.
Some people and habits are more susceptible to change. If you can target the right people and time your cue just right, your effort to change habits will be more effective.
Here’s Charles to explain who is more susceptible to habit change…
Here are some examples of points of flexibility…
- Entering college
- Graduating college
- Changing jobs
- Moving to a new town
- Entering a new relationship
- Getting married
- Getting divorced
- Having a baby
On your spreadsheet, add columns that track the demographics that commonly go through each loop (e.g. middle aged women, stay-at-home dads) and their recent / upcoming points of flexibility.
Whenever possible, you want to target demographics that are highly susceptible to habit change.
We’re all creatures of habit. As optimizers, we need to be in the habit of optimizing for habits. [Tweet It!]
Here’s how you can get started…
- Shift your optimization mindset. You want to focus on retention and habit formation.
- Decide whether you want to create a new habit or change existing habits.
- Identify cue-routine-reward loops.
- Analyze the loops. Decide where your product fits and how your product can improve them.
- Identify your demographic’s points of flexibility so that you’re targeting people who are more susceptible to habit change.
- Optimize your trigger, action, reward and investment. You want to compress the time it takes visitors to move through the steps and the increase frequency of which they engage your product.