We began this series with how product habits get made and why the neurotransmitter dopamine is so important for this process. Then we looked at the Hook Model, which Nir Eyal created to explain habit formation. Here in our concluding article, we will look at which products by definition cannot be habit-forming, what user habits can be confused with, and alternative ways to encourage users to interact with a product more often.

As described in the first article, a habit refers to an action performed unconsciously or subconsciously on a regular and frequent basis. The inability to perform this action for any reason can cause discomfort and unease.

Using these definitions and basic principles of the Hook Model, we examined different examples of when users don’t form a habit as well as cases when user behavior might resemble a habit, but is actually something else.

→ Test your product management and data skills with this free Growth Skills Assessment Test.

→ Learn data-driven product management in Simulator by GoPractice.

→ Learn growth and realize the maximum potential of your product in Product Growth Simulator.

→ Learn to apply generative AI to create products and automate processes in Generative AI for Product Managers – Mini Simulator.

→ Learn AI/ML through practice by completing four projects around the most common AI problems in AI/ML Simulator for Product Managers.

Products for rarely occurring jobs

Habits are a strong driver of retention. Long-term retention is at the core of product growth. In a product manager’s ideal world, users keep using a product multiple times every day. That’s quite plausible for consumer social products, of course, but not for many others. Maybe a user just doesn’t need to get that particular job done very often. And when an action isn’t repeated frequently, there’s no way for it to become a habit. If the job happens less than once a month, it’s extremely difficult to form a consistent habit—the frequency of the action is just not enough.

In the B2C segment, these less-than-frequently-needed services include real estate, hotels, and airlines. The jobs associated with these services do not happen as often as people use chat or social networks. For comparison: the average American in 2017 went on 2.5 plane flights. But 69% of Americans logged on to Facebook every day.

When someone comes back to a single product for accomplishing a rarely arising job, then the reason is probably loyalty or considering it the best among the available alternatives. We delved into the difference between loyalty and a habit in the first article of this series.

↓ This is the short series on how people get in the habit of using a particular product, what tools can be used to promote this, why this won’t work for all products, and how to apply this knowledge in practice as part of a product team.

→ How product habits are formed and what dopamine has to do with it.

→ Hook Model: encouraging a product habit to improve retention.

→ Not every product is habit-forming, but all products can have loyal users.

Tools are not habit-forming

Imagine that your favorite social network is down and you don’t yet know it. You get bored and your finger is hovering over the app icon. Your brain releases dopamine in anticipation of a social experience. But the app feed doesn’t update. You feel upset.

Now imagine a similar situation with a VPN that you need for work. Your annoyance stays within the rational part of your brain. You set about quickly finding an alternative or workaround to minimize the effect on your work.

A VPN is an example of a tool. Such products do not inspire emotional attachments, do not bring variable rewards to users, and do not form internal triggers—we don’t start using them out of boredom or loneliness. We want and expect predictability, clarity, and consistency from them. These products are not habit-forming.

B2B products are particularly illustrative in this context. Examples might include cloud services for business (like Microsoft Azure), ERP systems (like SAP ERP), or analytic systems (such as Amplitude). It doesn’t matter whether these products require constant user interaction or chug away in the background. These tools will not inspire a user habit.

Products with high cost of switching ≠ habit

Habits aren’t the only thing stopping users from finding alternatives. Products can make users stay put by making it expensive to switch. The cost of switching includes the effort, time, money, and emotional burden required to replace the product with something else. 

Switching to a new bank or brokerage, for example, takes a lot of effort. You have to switch the account for direct deposit of your paycheck and set up bill pay, maybe you have multiple savings accounts, etc. Even if there is a clear benefit to going elsewhere, the high cost of switching acts as a restraint.

The B2B products we just mentioned can also have a high cost of switching. Factors there include the high cost of competing solutions, long-term service agreement with the current provider, or need to retrain employees.

Here’s another example of the high cost of switching.

A 2010 FCC survey showed that only 36% of customers had changed their ISP within the last three years. They gave a number of reasons for being reluctant to switch. These included hassle and the high cost of new equipment. If the current provider is sufficiently reliable, then customers will have low motivation to switch if the cost of doing so is high.

Does this mean that users form a habit with regard to their ISP? Hardly.

Are Amazon and Google habit-forming?

In posts on product habits and the Hook Model, you can frequently see the question of whether Google, as a search engine, and Amazon, as an e-commerce platform, also create user habits.

Why might one consider Google habit-forming?

  • People use it frequently.
  • They perform searches without thinking (without weighing the alternatives).
  • A relevant search result can be like an unpredictable random reward that the user will be inspired to seek again and again.

What are the arguments for Amazon?

  • Amazon is the first place many people go for online shopping.
  • It gives a clear (although not variable) reward in the form of delivered merchandise.
  • Many people love to make spontaneous purchases (a.k.a. casual shopping or window shopping), and Amazon can fully take care of this felt need.

But we’d say that Google and Amazon are still closer to the “tool” category. These products truly do offer the most effective way for users to perform a certain job—thanks to Google’s quality and speed of search and Amazon’s wide selection, low prices, and fast delivery. 

What’s more, the two companies have created a high cost of switching for users. Fully parting with Google can mean losing one’s email, documents, and cloud storage. Besides providing relevant product recommendations, Amazon also bundles streaming media and quick delivery as part of a Prime subscription. These all make it harder for users to switch to another service.

Of course, some use cases are truly habit-driven, like with casual shopping. But overall usage is still utilitarian in nature.

A product can perform multiple jobs while being habit-forming for some of them and not for others.

Inspiring more frequent interaction with a product that’s not habit-forming

We already know that rarely used products will not lead to a user habit. At least in the sense in which we have been using the word. 

Let’s consider a few ways in which products needed infrequently can still become top-of-mind and convince users to select them when the job arises.

When the user has a rare job to get done, they start looking for a product. This could mean performing a Google search, asking for advice, and remembering previous experience and any brands they’re familiar with. It’s possible to win users over in several ways: 

  • Product-related content, like a high-quality blog, fosters reader trust in the company’s primary product if and when it is needed later.
  • Spin-off product for more frequent use. For example, real estate platform Zillow launched Zestimate, a product for homeowners to monitor the value of their home. Users will come for the latest valuations of their house much more often than they will actually buy or sell real estate.
  • Entry points within the marketing funnel. Most travel-related search results on Google will either belong to Booking.com or be integrated with it.
  • Investment in brand awareness. Searching for work is a relatively rare and unpredictable occurrence compared to ordering food or a taxi. So American company Indeed is spending over $100 million to get its name out there. The goal is not to get people to immediately open the site and look for new jobs. But when they eventually need to, they will be sure to use Indeed.
  • High cost of switching. For products that perform an infrequent job and aren’t habit-forming, something like a loyalty program can make the difference. This mechanic is actively used by airlines and retailers.

It’s certainly harder to retain clients for products that solve an infrequent job and are not habit-forming. But as we’ve seen, there are a range of other mechanisms for nudging a user to a certain product over the alternatives.

Conclusion

Not all products are conducive to habits. Perhaps the user rarely has a job for the product to do and doesn’t have any way to predict when. Or they view the product as a tool, for which habit formation is a priori impossible or possible only for a very narrow population of users or in a marginal number of use cases.

But even when no habit is forthcoming, there are plenty of other ways for convincing people to choose a product over the others. This can be done by making a spin-off product for more frequent use or investing directly in brand recognition via classic marketing channels. 

These mechanics keep the solution top-of-mind for the user, freeing them from the need to compare and select, even if using the product never results in dopamine release.