Have your customers been hooked? (CXL Review)

I don't even know what week this is... but time flies when you're having fun.

The CXL Institutes Digital Psychology and Persuasion course has been a huge eye opener and wealth of knowledge for me.

Today we are going to talk about Building Habits and Loyalty and how we can use our design to persuade.

Loyalty is getting your customer to come back again and again. Apple, Starbucks, and Nike are all companies that have used loyalty really well. This companies have become etched into their customers brains and they are hard pressed to change from these brands.

So how do we create this kind of loyalty in our brands?

We must remember that true loyalty comes from customer experience and emotional connection, not locking our customers in.

We should focus on our customer experience and we can do this with reward programs.

There's two types of rewards: Fixed and Variable

1. Fixed Rewards are rewards that come at a set interval like you get your 10th cup of coffee free... Something customers can look forward to. They need to come often enough to reinforce behavior but not so so often that the reward is no longer meaningful. Research has shown that reward redemptoin INCREASES reward seeking behavior aka coming back!
2. Variable rewards bring surprise and delight and must be desirable and achievable.

In using rewards it also benefits to use goal gradient. Studies show that the closer you get to a goal the faster you go to get it.

So when using reward programs to gain loyalty make sure to

• Show progress visually - Let them see their progress and give them a goal to obtain
• Start with free progress - Give them a head start. If you want to give them a reward in ten purchases put 12 spots and give them 2 spots and let them fill the other 10
• Be fair with your rules - Being unfair rules or even if the customers perceive them as unfair can backfire. Customers will say "I'm trying to be a loyal customer and this is the thanks I get?" It'll be hard to come back from that. If this happens to you, studies show that a simple apology with no excuses help to cancel out and mitigate this behavior.

The other way to create loyal customers is to get them HOOKED.

This idea and model was created by Nir Eyal. He studied the worlds most popular companies and found out how to create habit forming products that lead to loyalty.

Habits are doing behaviors with little or no conscious thought. This is what happens when you get your daily latte or not even think about getting a different phone than the iphone. It's little or no conscious thought and you've become loyal to these habits.

In order to do this companies connect your problem to their product or solution.

It takes four steps: Trigger, Action, Reward, Investment

Studies show that negative valence states are powerful triggers for you to look to solve a problem.

The first step of hooking customers is finding the problems and emotions that will push them to want to do something. Research shows that negative valence states are more powerful than positive ones so find the problem the want to solve and then create TRIGGER that will help them to solve this problem. Triggers tell you what to do next. There's external triggers like notifications. Internal triggers are the triggers we make in our head that lead to what we do next.

Taking action is the second part of the hook. This is the simplest behavior that is done in anticipation of reward. This can be a scroll on Pinterest, a like on Facebook, search on google or pressing play on YouTube.

Looking a BJ Foggs Behavior change model we can see that these two things must work together in order to move them to the next phase.

His model says Behavior change happens when there is motivation, ability and a trigger.

So to get them hooked there must be a problem or pain they're seeking to fix, a trigger and they must have the ability to do it. So pay attention to what their smallest action is and make sure it's as easy possible to do and remember the more we do a behavior the easier it becomes and the more likely we will do it in the future.

Next we have to reward them for taking this behavior... The itch is scratched, the problem is solved.

See the brain doesn't motivate us by pleasure but activates an itch called the stress of desire.

This is most active when anticipating rewards not when the reward is received.

So use rewards to scratch the itch from the beginning in the trigger stage.

Use variable rewards and that will stimulate the brains itch and fulfill their initial itch.

That could complete it to get a one time sale but we are trying to get them hooked and to do that there's one last step: Investments.

Investment increases the likelihood of the next pass into the hook. This can be done in two ways:

1) You could load up the next trigger like sending a message which will get a response and lead you back to the app to reply.

2) Storing value in your product - Good examples of this would be followers, storing data like google drive or reputation like linkedin.

This leads to another pass into the hook and each pass through the hook builds habit and your customers will become loyal to your brand.

So from start to finish these are the questions to ask to create a hook:

1) What is the internal trigger?

2) What is the external trigger?

3) What is the simplest behavior they can take in anticipation of a reward?

4) Is the reward fulfilling, yet leaves the user wanting more?

5) What work is done to increase likelihood of returning?

This all should've made you feel kind of icky. I know it did for me.

However, we should be doing this to help design healthy habits, products that can really help them.

This is the reason I took this course. A quote by Dan Kennedy changed my life and my views on marketing and sales.

He talked about how persuasion and manipulation have negative connotations but they are necessary tools when you have a product or service that you KNOW can change peoples lives.

It's unethical regardless of what you're doing to force something on someone that they don't need. But it's even more unethical to have something that can save someones life or change their life and not do everything in your power to get it to them.

I don't think pinterest or twitter or facebook are the tools people need to better their lives but there are products and services made by well meaning people that don't get in front of the right people because of their fear and lack of knowledge of marketing or sales.

I want to help those people create the change they want to make in the world and by taking this course I'll be able to do so!