Hooked - Chapter 5 - Investment

Investment

The investment stage is the 4th stage of the Hooked model - unlike action phase, which delivers immediate gratification, the investment phase concerns the anticipation of rewards in the future.

Remember and Share

The investment phase is the 4th step in the Hooked Model.

Unlike Action phase, which delivers immediate gratification, investment phase concerns the anticipation of rewards in the future.

Investments in a product create preferences because of our tendency to overvalue our work, be consistent with past behaviors, and avoid cognitive dissonance.

Investment comes after the variable reward phase, when users are primed to reciprocate.

Investments increase the likelihood of users returning by improving the service the more it is used.  They enable the accrual of stored value in the form of content, data, followers, reputation, or skill.

Investments increase the likelihood of users passing through the Hook again by loading the next trigger to start the cycle all over again.

Interesting Thoughts

Escalation of commitment - the more users invest time and effort into a product or service, the more they value it.  In fact, there is ample evidence to suggest that our labor leads to love.

3 Tendencies 

We irrationally value our efforts.

The more effort we put into something, the more likely we are to value it.

Example: IKEA- They make you work to assemble your furniture, and people have more attachment to their IKEA furniture because of it.

We seek to be consistent with our past behaviors

More likely to be consistent with our past behaviors.

Example: ugly yard sign - those that were asked to place ugly yard sign saying "slow down" were much less likely to follow through than those who had been asked same question BUT had already been asked to put a smaller less ugly yard sign in the weeks prior (17 percent vs 76 percent!!!)  Little investments, such as placing tiny sign in the window, can lead to big changes in future behaviors.

We avoid cognitive dissonance

Change our preferences to avoid cognitive dissonance.

Cognitive dissonance - 
  1. the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change.

Basically we want to conform to everyone else's beliefs (example Nir gave was beer)

Rationalization

we change our attitudes and beliefs to adapt psychologically.
Jesse Schell - talked about Mafia Wars - text-based game that makes over $100 million.
- Utilized info about Facebook friends - oh you compete against your friends to be better - oh you can pay $20 to be better - oh that confirms something you knew, you are better than your friends - (rationalization) this must be worthwhile - why? because I spent time on it.  

Other models 

Trigger -> action -> reward can change immediate behavior (such as radar gun) - but this differs when it comes to how we form habits with products - it is a design pattern to create unprompted engagement in order to connect the user's problem to the designer's product.

Unlike action phase - investments are about the anticipation of longer-term rewards, not immediate gratification.

Stored Value

The stored value users put into the product increases the likelihood they will use it again in the future and comes in a variety of forms.

Stored Value - Content

The collection of memories and experiences, in aggregate, becomes more valuable over time and the service beomes harder to leave as users' personal investment in the site grows.

Stored Value - Data

The company found that the more information users invested in the site, the more committed they became to it.

Stored Value - Followers

Investing in following the right people increases the value of the product by displaying more relevant and interesting content in each user's Twitter feed.  IT also tells Twitter a lot about its users, which in turn improves the service overall.

For many users, switching services means abandoning years of investment and starting over.

Stored Value - Reputation

Reputation makes users, both buyers and sellers, more likely to stick with whichever service they have invested their efforts in to maintain a high-quality score.

Stored Value - Skill

Once users have invested the effort to acquire a skill, they are less likely to switch to a completing product.

How to use

Product designer must consider whether users have sufficient motivation and ability to engage in the intended behavior.
Recommend that you progressively stage the investment you want from users into small chunks of work, starting with small, easy tasks, and building up to harder tasks during successive cycles through the Hooked Model.

Loading the next trigger

Habit-forming technologies leverage the user's past behavior to initiate an external trigger in the future.

Examples given:
Any.do - gets permission to send reminder on next calendar appointment.
Tinder - Simplified investment - loading next trigger on every swipe.
Snapchat
Pinterest




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