Omnichannel commerce | Marketing
The 4 Hooks for Creating Repeat Customers
January 20, 2016
We all want to hook consumers on our products, services, and brands so that they'll come back again and again. Doing so boils down to implementing a four-part process, according to Nir Eyal, author of Hooked: How to Build Habit-Forming Products, and a speaker at the U.S. National Retail Federation's Big Show 2016.
Habit-forming products—and services and experiences, for that matter—have four hooks, Eyal explained during a session titled "Happy to Be Hooked: Design, Emotion, and the New Customer Experience": trigger, action, reward, and investment. One hook leads to the next to the next, ideally creating an endless loop.
Kicking off the chain is the trigger. Actually, there are two types of triggers, according to Eyal. A call-to-action button is an example of an external trigger. For external triggers to be most effective, they need to create an association with an internal trigger, usually an emotion. This is why food and beverage companies spend millions to have their products associated with good times and happy occasions. "The information for what to do next is informed through an association in the user's memory," Eyal said. Even if the trigger is a negative emotion (and according to Eyal, boredom, sadness, and other negative emotions are more powerful internal triggers than positive emotions), having your product or brand associated with positive memories will lead consumers to seek it out to relieve their negative sentiments.
The trigger leads to the action, and the simpler the action is, the more likely the consumer is to take it. That means making your website intuitive to navigate and use, making merchandise easy to find in your stores, making product and ordering information readily apparent in your catalogues, reducing the number of fields in any forms and the number of clicks to complete a web purchase.
The action results in the reward. This seems obvious enough, but Eyal said that the ideal reward has a bit of variability—not so much that the reward itself isn't fulfilling, but enough that the consumer will want to repeat the action in hopes of being pleasantly surprised next time. With Facebook, Pinterest, and other social media, this variability ("Oooh, I wonder who or what is going to pop up on my feed next?") is what encourages users to continue scrolling and to return to their page; in terms of retail, variability can come in the form of new, unexpected merchandise or loyalty-club rewards.
The final hook, investment, is a way of priming the pump of the next trigger. It's one reason frequent-buyer clubs can be so effective: The user is invested in reaching a certain spending threshold or purchase frequency in order to receive a reward. (And because this particular reward is above and beyond that of the usual action—a free lipstick with the 10th purchase at a drugstore, say, or 15% off any purchases after spending a certain amount—it incorporates variability as well.) Besides the more tangible investment in a loyalty club, storing value—such as product reviews on Amazon or TripAdvisor or images on Pinterest or Instagram—is a form of investment as well.
Ensuring that you have the most-effective triggers, actions, rewards, and investments in place requires—you guessed it—understanding your customers. "If you don't understand your customers' needs and motivations, you can't build a habit-forming product," cautioned co-presenter Chris Bye, of ByeDesign. "You want to understand people's hidden expectations and their needs vs. your wants."
You can find that information, Bye said, via "research, empathy, and immersion." When it comes to research, however, he advised against using focus groups. Because they place people in an artificial environment, subject to peer pressure, "customers will say all sorts of things in a focus group and then go out and do the opposite." He gave the example of Sony's desire to make boom boxes more appealing to teenagers. In focus groups teens said they'd love to buy colorful boom boxes rather than boring black ones. Yet when Sony produced a range of colorful boom boxes, they sat on store shelves. To find out where it had gone wrong, Sony set up more focus groups with teens, who again waxed enthusiastic about colorful boom boxes. Yet when, at the end of the sessions, the teens were given a chance to take home a free boom box, every single one selected... a black model.
In the end, Eyal said, "nobody says the best product wins. It's the product that owns the monopoly of the mind that carries the day."