053 Nir Eyal: Consumer Behavior & Creating Habit Forming Products

For episode 053, we're joined by best selling author, speaker, and behavior change expert Nir Eyal, as he shares the powerful insights and strategies that companies inside and outside the fitness industry use to create engaging products and foster repeat clientele.

Today on the show, we navigate the intersection of psychology, technology, and business, as Nir provides a comprehensive approach for using modern technology to build habit-forming products and how to apply these techniques to the wellness and fitness world.

We dive into the psychological principles that lead to habit change with Eyal's "Hook" model, which involves four main steps: trigger, action, variable reward, and investment. He explains the value of understanding these different stages, and how building around your user's' own internal drivers will help to create an emotionally rewarding experience and keep customers coming back for more.

With all the advances in our modern world, how can club owners and fitness pros combine new technologies and these habit-forming principles to make a profound impact on health, create loyal fans, and increase member retention?

The answer to that question and much more takeaways for club owners, operators, and fitness pros in this episode with Nir Eyal.

About Nir Eyal

Nir Eyal writes, consults, and teaches about the intersection of psychology, technology, and business. The M.I.T. Technology Review dubbed Nir, "The Prophet of Habit-Forming Technology."

Nir founded two tech companies since 2003 and has taught at the Stanford Graduate School of Business and the Hasso Plattner Institute of Design at Stanford. He is the author of the bestselling book, Hooked: How to Build Habit-Forming Products.In addition to blogging at NirAndFar.com, Nir's writing has been featured in The Harvard Business Review, TechCrunch, and Psychology Today.

Nir is also an active investor in habit-forming technologies. Some of his past investments include: Refresh.io (acquired by LinkedIn), Worklife (acquired by Cisco), Eventbrite, Product Hunt, Marco Polo, Presence Learning, 7 Cups, Pana, Kahoot!, Byte Foods, Anchor.fm, and Symphony Commerce. Nir attended The Stanford Graduate School of Business and Emory University.

Listen To Episode 053 As Nir Eyal Uncovers

• Behavior design principles that can build healthy habits into our wellness routine
• The crucial difference between forming habits and developing addictions
• How to maintain our ethics when manipulating the habits and behaviors of the consumer
• How gym's can use tech to create sustainable and healthy behavior change for their members
• The basic tenants of products and services that lead to habit formation
• How facilities can minimize advertising costs by increasing member retention
• Understanding our "present bias" nature how to speed up reward systems
• How to create present moment rewards that hook people into healthy behaviors
• Why simplicity is key for creating sustainable behavior change
• How clubs can use client's biometrics and activity data to create a virtual coaching experience
• How we can leverage "tribe effect" and "social contagion" to steer our actions
• Communication tools that to add accountability and build engaged communities
• How to identify the needs of your target consumer and deliver on your promises
• The "Hook Model", a basic framework of the 4 key stages:
  • Trigger: How does the loop initiate? In the beginning, this may be through external triggers (such as an email, notification, icon badge, etc) but through successive loops, the user eventually creates internal triggers where a particular thought or emotion will send them back to your product.
  • Action: Once the user is aware they need to use your product (through the trigger), what it the simplest action they can perform to get some kind of reward. For example, a Facebook "Like".
  • Variable reward: How are they rewarded for this behavior? This could be social validation (e.g. "my friends approve!"), collection of material resources (e.g. add a photo to a collection) or personal gratification (e.g. inbox zero). The "variable" part is important - rewards should not always be predictable, encouraging users to repeat the cycle.
  • Investment: Finally, the user needs to put something back in to increase the chance of repeating the loop. This could be content (e.g. a book in your Kindle), user entered data (e.g. profile information or linked accounts), reputation (e.g. something to gain a 5 star seller review), or a learned skill (e.g. I'm now really good at this software program). The investment also sets up the trigger to for the next cycle of the loop.

Top 3 Takeaways From The Show

• It's more profitable for clubs to keep their existing members than to acquire new ones. Gym owners must not fall into the mentality that losing customers each year is simply par for the course and that all they have to do is keep advertising to bring in new business. Nir recommends placing a heavy emphasis on using tech that will engage the member and keep them coming back so businesses save on costly advertising and avoid aggressive marketing campaigns.
• Nir reminds us that we have to understand that human behavior is symptomatic of what's known as "present bias." This tendency proves the importance of creating an immediate reward system to hook our customers and bring the gratification from their actions closer to the present moment. Using exciting new tech and social contagion can help create better exercise habits in members by adding more enjoyment to the workout experience.
• With the exciting advances in technology, it's important to develop a truly ethical framework for "hooking" people through psychological manipulation. Some of the technologies we see today drive addiction with little regard for the detrimental impact on the consumer's health, but Nir believes if we keep wellness at the forefront of our product creation and tech implementation we will be successful in building healthy habits to enhance the lives of our consumers.

Power Quotes From Nir Eyal

"Wherever new technologies suddenly make a behavior easier, new possibilities are born ." - Nir Eyal on the Fitness + Technology Podcast

"The big problem with humans is that we have a "present-bias" and don't assess the future consequences of our behaviors. We can change our actions by using technologies to bring the rewards closer to the present moment with the long-term goal of getting people to enjoy these behaviors." - Nir Eyal on the Fitness + Technology Podcast

"There are only three ways to capture your competition's users' habits. Either make the reward more fulfilling, send users through the hook faster, or cycle through the hook more frequently." - Nir Eyal on the Fitness + Technology Podcast

Resources Mentioned From Nir Eyal

• Amazon: Hooked: How to Build Habit-Forming Products
• Kindle: Hooked: How to Build Habit-Forming Products
• Audible: Hooked: How to Build Habit-Forming Products
• Nir's Blog
• The Hook Model
• The Four by Scott Galloway
• 023 The Truth About Health Clubs & Behavior Change - Jan Middelkamp
• 048 Bryan O'Rourke: The Latest In Betterment Technology 2017
• Google
• Facebook
• Apple
• Amazon
• Alexa
• WhatsApp
• Get Fit Over 40
• Gym Hero Pro
• Fitbit
• Dexcom

Thanks To Our Outstanding Sponsors

• Bryan O'Rourke and his family of companies including Vedere Ventures, Integerus Advisors, and many more. If you are looking for unmatched guidance, capital, insights or a great speaker or facilitator, Bryan and his partners are the go to resource for your organization. To learn more visit bryankorourke.com
• The Fitness Industry Technology Council, your non-profit resource for reliable technology information supported by forward-looking brands who are seeking to drive increased technology adoption in the fitness industry. Make a difference and join FIT-C at fittechcouncil.org today
• Check out Bryan and his partner Robert Dyer's recent book "9 Partnership Principles: A Story of Life Lessons" which is available now on Amazon.com

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