- What makes digital products thrive or fail?
In the last decade, we have seen a shift from world technology leaders on how products are designed to grow into great companies.
Initially products were created to solve problems and of course this is still the case, however this principle has grown into something larger where now products are intended to be your go-to partner for a specific sector.
The benefits of this is that this will increase the time usage per user per day and the main driver of this to turn their products into habits.
Habit-forming products have become that go-to solution for founders to base their business model on as we have seen with the increase of subscription-based pricing where users are charged a recurring fee to increase the likeliness of the customer being retained in the business.
- How are habits created?
In the book of power of habit by Charles Duhigg, Charles says habits are created with the following formula:
Cue + Routine + Reward = Habit.
Cue – a trigger for your brain that tells it which habit to use.
Routine – how a habit influences what you do, think, or feel.
Reward – which helps us determine how valuable the habit is, and whether it’s worth remembering or not.
Do this for 21 days consecutively.
- An example of how you can use the above to affect personal behaviour?
If you want to start running each morning, it’s essential that you choose a simple cue (like leaving your running clothes next to your bed) and a clear reward (The endorphin rush you get from a jog). But countless studies have shown that a cue and a reward, on their own, aren’t enough for a new habit to last. Only when your brain starts expecting the reward—craving the endorphins or sense of accomplishment—will it become automatic to lace up your jogging shoes each morning. The cue, in addition to triggering a routine, must also trigger a craving for the reward to come.
- An example of how ANCHOVY. leveraged this for our clients?
Last December, we had a client who owned an app which pushes exclusive app offers at their local restaurants and their app sales were at 20% of which they had projected.
So the users were given better offers but still did not use the app – why? As they did not have the habit of opening the app at the counter.
Using the Charles Duhigg formula, we created a 24 day Christmas campaign were we pushed an exceptional offer everyday for 24 days to get users to open the app regularly before making a purchase at the counter.
The result was that sales grew by 600%, with the sales now growing month on month through referrals and the client is now in line with their projections.
- How Macro factors affect users’ habits and businesses collectively?
Macro factors are changes in consumers’ environment and as a result, having an effect on businesses’ revenue.
A clear example of this are online supermarkets in Malta. The supermarket market in Malta is valued at approx. 1 Billion with the online supermarket owning 3% of this market.
An interesting occurrence that is seen with this 3% online supermarket sector is that the majority of the sales happen when there is rainy weather as consumers would prefer to stay home and have their groceries delivered to them.
This is a clear example of how Macro factors can work in favour for business.
- Coronavirus is a macro factor on steroids and how is this an opportunity to create a habit for your business?
As you are well aware, the Coronavirus is having a significant effect on consumers’ daily behaviour and as a result will have an effect on businesses in Malta with some suffering and others thriving.
With more consumers spending time at home with possibly a national lockdown taking place, digital usage per day is significantly growing and it will remain on a consistent basis for significant amount of time which is longer than 21 days… which is the time taken to create a habit
Just like if it had to rain for 21 days straight, this would increase the about of habit-driven customers using online supermarkets, the coronavirus can be your window to create a habit that will drive revenue to your business
Ask yourselves the following questions:
- Which product/service of your business will increase in demand during this period?
- What habit can you create to grow sales?
- How can we leverage the Charles Duhigg formula to hook customers into your business?
Should this be of interest to you, set up a meeting with email@example.com
Andrew Borg Costanzi
Head of Growth
Fact: I take an ice cold shower every day