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Managing habits — variable reward and investment

Watch Alex Cowan talk about user habits and how they can help a product manager innovate new solutions that change the way users do things.
We’re going to pick up here on the hook framework to help you create habits around your product with the user. The next component is the variable reward. A reward is something that the user gets - it’s hopefully positive, but it could also be negative. The reward for scrolling through Facebook is you see some kind of interesting thing that you’re not expecting and on the posting something - if you post something, your variable reward is are you going to get one like or zero likes or 20 likes or are people are going to give you this sort of social acclimation? Let’s talk about the variable part for a second.
The idea with the variable part is that to the extent variability is relevant to your product, that will stimulate the creation of habits. And the reason is - if you think about gambling - why do we like - why do people gamble? It’s completely irrational, because without going into the details, it stimulates a pleasure center in our brain, this anticipation of a reward. So an example that you may think well, that just applies to consumer things, it’s not true.
If you look at a platform like Stack Overflow where developers answer questions, they created an enormous amount of habit around the - the variable reward of the Stack Overflow site where somebody posts a question about software development - or other things now, too - and people post answers. And those answers get responded to, up voted, down voted. So that’s a variable reward. And that’s a - not really a consumer thing, it’s a more of a - sort of business-oriented or -or technical thing. What would be the variable reward for Helen after she, in the process of - of giving people - candidates - these quizzes? Well, it’s interesting.
I mean, I think that probably after Helen gives the quiz; having the data; okay, it’s done. They got X score, there’s probably a certain reward there for her of just knowing that it worked and that she has this information now as part of the evaluation of this candidate. Since this process is a lot about how - how Helen facilitates the interaction between candidates and the hiring manager, their reactions might be part of the reward as well. If the candidate likes the quiz and says oh, this is fine; you know, I kind of understand what the job’s about better and it was sort of interesting; that’s - that’s a positive reward, that’s good for our product.
If the candidate says well, I’m an engineer, everybody wants to hire me because I’m in an area that I’m good and I am in an area that people want and I don’t like this quiz, then that’s bad. That’s going to be a negative reward and hurt our product. And how does Frank or Francine, the hiring manager, relate to these quizzes?
Do they like it? Do they find it useful? That’s going to create a positive reward for Helen and the reverse is also true. As a product manager, your job is to hypothesize what these rewards are, test somehow
<v ->and there’s a lot different ways and we’ve talked about some of the methods</v> to create quantitative and qualitative observations - test those ideas and then for the positive rewards, we want to try and amplify those for the user and think about how we can make them even more rewarding, if you will. Now the last phase here is investment. And this is the extent to which or the manner in which continued use of the product increases the user’s preference to use the product in the future. And the good news is there’s a natural form of investment because we want to be consistent with our past actions. You get it naturally and then there’s also investments of data.
So for example, if all of this woman’s friends are on Facebook already, maybe that makes her more want to create an invite to an event there because she doesn’t have to go and enter the names in all over again, she can just sort of pick them. And that’s an investment of data. The same thing here. If this gentleman’s photos are on Facebook, maybe he uses that to send a photo to someone since the photo is already there and he knows where it is and - and so forth. So what would be an investment in the case of an able quiz? What things would they be doing with the system that would increase their preference for using it in the future?
I would say that if - if Helen is speaking with Frank or Francine here about making a decision on the candidate, the fact that they have all this comparative data about these quick skills assessments, certainly not the only thing they’re going to use in making that assessment, but the fact that it’s there and it’s available, maybe they start to make other notes on it as well, that would - if we can make that a thing that they want to do, that - that certainly is a - a case of increasing investment in the product.
To the extent that Helen is hiring for the same positions over and over again and she already has quizzes for, let’s say, a site reliability engineer up on the system, that’s going to increase her preference to use an able quiz in the future over some other alternatives, since the work’s already done, the stuff’s already set up there. So in summary, we go from a trigger to an action to a reward to investment. And I highly recommend considering a quick sketch of this for your particular product and thinking about how this works for your user. What are the triggers? And how do your users load them? Are they internal or external?
Are there other ways that you could create useful, meaningful triggers that would be good for a user and make them more prone to use the product? Are you minimizing the actions that the users have to take to get these rewards? And what are these rewards? And have you amplified them? Is there a good case to make them variable somehow, to create that kind of excitement and interest in - in what’s going to happen with the product? You know, don’t force that, but certainly consider it. And then how does the user’s ongoing use of the product increase their preference to use it over time? What sort of investments are you creating in the product?
These things will really, really help you create durable dimensions of desirability around your product and improve the performance of your product overall.

In this video, Alex continues his discussion on Nir Eyal’s Hook Framework, concluding with variable rewards and investments. A reward on Facebook may be getting numerous likes. An investment in Facebook may be the collection of data that allows you to easily invite friends to a party.

In this framework, a reward can be positive or negative. Using the Facebook scenario, can you think of instances when there are negative rewards for your actions?

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