Straight from CBL: Making Your Brand a Matter of Habit

Method1's "Straight from CBL" series features highlights from The Behavioral Science for Brands Podcast from the Consumer Behavior Lab (CBL), hosted by M1 Founder and President MichaelAaron Flicker and Senior Behavioral Science Partner Richard Shotton. Seeking to make a better industry, CBL is a premier authority on human behavior in marketing, uncovering the insights behind brands, campaigns and the behavioral science that drives them. At Method1, we put CBL's insights into practice—making indulgence brands that deserve to be experienced irresistible.

What separates the brands we buy occasionally from those we reach for every time? The answer is simple: habit.

Increasing ad spend can give awareness a bump, and discounts might boost quarterly sales. But to create the enduring brand preference and loyalty that make consumers’ moments of joy a matter of habit, marketers need to understand the behavioral science behind how habits form.

In Episode 59 of Behavioral Science for Brands, Flicker and Shotton interview Nir Eyal, author of Hooked, who explains his four-part Hook Model for creating habit-forming brand experiences.

Eyal explains that successful brands identify the internal triggers—emotional states like boredom, uncertainty or desire for connection—that their products address. By building hooks into their marketing and experiences, these brands reduce their reliance on expensive advertising and promotions that come "straight out of your bottom line."

As he puts it: "You can always buy growth. You cannot buy engagement. Engagement and retention must be designed into the product experience."

Today's technology enables brands to "make products and services for markets of one," creating personalized experiences that tap into the psychological "itches" consumers seek to scratch—and crafting moments that only appreciate over time.

And that makes your brand your consumer's trusted, irresistible choice—selected repeatedly through decision making that’s effortless.

As you read this excerpt, consider what opportunities your brand has to turn consumers’ one-time purchases into habits that fit seamlessly into their lives.

What hook could make your brand not just purchased but preferred—time and again?

PODCAST EXCERPT

The Behavioral Science for Brands Podcast from the Consumer Behavior Lab Episode 59: Interview, Nir Eyal, author of Hooked, on how to form lasting habits
Note: Transcript lightly edited for clarity
Speakers: Richard Shotton (RS), Nir Eyal (NE)

RS: Many of our listeners are interested in knowing, “How do I retain customers?” “How do I build a habit-forming product?” You've created one of the most influential and interesting models out there. Could you take people through that Hooked model? What are the key stages? What do people need to know about that model to try and use it?

NE: Absolutely.

I want to preamble a bit that I'm standing on the shoulders of giants. None of what I describe in this model is my own, original research, partially because I didn't want anything too new. I'm sure many of your listeners have been following the replication crisis that's happening in the social sciences. So almost all of the research studies that I cite—and there's over 30 pages of citations to peer-reviewed studies—are pre-1970s. Established research, B. F. Skinner type stuff, [fundamental] consumer psychology.

So I'll walk you through what the Hook Model is from a 30,000-foot view.

A Hook Model is an experience designed to connect your user's problem with your product with enough frequency to form a habit. And frequency is key here. We know that there's a precipitous drop off in the likelihood of changing a consumer habit if the behavior does not occur within a week's time or less.

Every business today needs to figure out how to keep people coming back. And so every business that needs people coming back needs a hook.

A hook starts with what's called a Trigger. There are two kinds of triggers. We have external triggers, which you'll be very familiar with. These are the pings, the dings, the rings, anything in our outside environment that tells you what to do next with some piece of information. There’s another kind of trigger we’re going to get back to in just a moment.

The next step of the Hook Model is the Action phase. The Action phase is defined as the simplest behavior done in anticipation of a reward. Open an app, scroll a feed, push a play button. These very simple actions done in anticipation of an immediate reward.

The third step of the Hook Model is the Variable Reward phase. And the variable part is very, very important. We know that one of the drivers of behavior change is this element of variability, what we call an intermittent reinforcement. This comes from, classic B.F. Skinner [research], intermittent reinforcement.

I'm sure many of your listeners know, but there are also three kinds of Variable Rewards—only one of which is monetary. Most businesses, when they think about rewarding their customers with some kind of incentive. It's discounts, it's coupons, it's deals.

That's the last line of defense. [But] unfortunately, people jump to that very, very quickly. Without realizing that comes straight out of your bottom line, right? Every percentage off, every discount, every coupon. Not only is that coming out of your bottom line, you are training your customers to be cheapskates. You are attracting and training people to always expect more and more discounts.

I call it the Bed, Bath & Beyond effect. You know Bed, Bath & Beyond, it's an American retailer. I think they just went out of business, and I'll tell you why they went out of business: because nobody shopped there without a discount. Everybody was flooded with [the] coupons. You would get a hundred of them at a time in your mailbox. So you were dumb if you didn't shop with a discount, it was silly to pay full price! So nobody did. And so of course that came straight out of the bottom line.

There are non—monetary Variable Rewards: rewards of the tribe, rewards of the hunt, rewards of the self—we can talk about that more—that businesses should utilize so that they’re not constantly defaulting to the solution of always giving deals and discounts.

Then last, and most important, is called the Investment phase. The Investment phase comes after the Variable Reward phase. This is where the user puts something into the product to improve it with use. And this is really where the revolution in information technology takes hold, because for the first time in manufacturing history, we can make products and services for markets of one.

Henry Ford famously said, “You can have any color of Model T as long as it's black.” Now, why did he say that? Because making a black car and a blue car and a red car and a purple car back then, that was very, very difficult. Today, companies can use customer information to tailor the product experience to each and every consumer.

And now, with the dawn of AI, I promise you in the next 5–10 years, if you don't do this, you will be out of business. Your competition is going to eat your lunch because consumers are going to expect customized generative experiences [that] tailor the experience to each and every consumer. Exactly like what TikTok and Meta and these companies are doing algorithmically, projecting what’s in a newsfeed. All sorts of companies are going to have to do this in order to tailor to consumer preferences.

So that's part of the Investment phase where the user puts something into the product, data, content…. [Such that] the more effort you put into the product, the better it becomes with you.

Other products that are not habit-forming, they depreciate. Your car, your couch, your clothing, all of these things lose value with wear and tear. Habit-forming products do this amazing thing where they appreciate. They should get better and better the more you use them—so that as a result through successive cycles, through these hooks, eventually, you no longer need those external triggers. You don't need the pings, dings, and rings anymore because your consumer begins to associate your product with what's called an internal trigger—remember I told you earlier, we’d get back to these?

Internal triggers are uncomfortable emotional states that we seek to escape: loneliness, uncertainty, fear, anxiety. Every product or service we use fundamentally has to scratch a user itch. It doesn't matter what business you think you're in, whether you think you're in clothing or food and beverage or hospitality. You are scratching a consumer's psychological itch. That is the business you are ultimately in.

So the goal of a habit-forming product is to attach that psychological itch—no matter what it might be—to the use of your product, [as a means for the consumer] to find relief.

When you can do that, when you know you have actually formed a consumer habit, is that you don't even need expensive advertising. You don't even need spammy messaging. People start triggering themselves based on their associations.

Imagine what would happen to your bottom line if you didn't have to spend so much money on all that expensive advertising and outreach. What if people came to your product because they wanted to use it, not because they had to use it?

That's really the promise of building a habit-forming product.

To hear more about how to make your brand a habit, listen to Episode 59 of The Behavioral Science for Brands Podcast in its entirety here.

To see behavioral principles in action building irresistible brands, explore Method1's work.

About the Authors

MichaelAaron Flicker, Founder and President of Method1 and Founder/CEO of XenoPsi Ventures, brings expertise in business consulting, advertising and behavioral science to the indulgence category. MichaelAaron co-created the Consumer Behavior Lab (CBL), co-hosts the CBL’s "Behavioral Science for Brands" podcast, and is the co-author of the forthcoming book Hacking the Human Mind (all with fellow behavioral science expert Richard Shotton). Through these platforms, he translates academic behavioral research into practical brand strategies, empowering marketers to drive immediate results and building lasting brand value.

Allison Arling-Giorgi, Head of Brand at Method1, is an expert brand-builder who harnesses deep understanding of human behavior to drive real business impact. She has spent her career helping brands in CPG and spirits industries make sense of consumers and culture, translating insight into highly effective and awarded work. Allison has been a featured speaker at conferences across the U.S., and has also contributed to the PBS Frontline documentary “Generation Like,” the UK Daily Mail and MediaPost.