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LIVE - Product Psychology - A Course of User Behavior
LIVE - Product Psychology - A Course of User Behavior
I do quite a bit of research, writing, and consulting on product psychology — the deeper
reasons underlying why users do what they do.
I also frequently teach and speak on the topic. Invariably, after each talk, someone
approaches me and asks, “That was very interesting. Now where do I learn more?” I’m
never sure what to say, since there’s so much great information available.
What this person really wants to know (and I’m assuming you do, too) is where all the
really good stuff is. They want to know the highlights, the takeaways, and the methods
and techniques that can help them be better at their careers, build better products, and
ultimately improve people’s lives.
That’s why we’ve created this course. Product Psychology: A Course on User Behavior
is a series of curated lessons from the most knowledgeable people in the field.
I’ve asked my friends and colleagues for their top three to five resources on one
important topic related to product psychology and user behavior. They’ve taken the
time to dig up their favorite articles, videos, and resources to get you up to speed
quickly.
In each lesson, you can easily skim the takeaways or click on a link to go deeper. We
hope you enjoy the course and find it helpful.
Best,
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Table of Contents
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Product Psychology: The 3 Things Everyone Should
Know About
Curated by Nir Eyal. Nir Eyal is the author of Indistractable: How to Control
Your Attention and Choose Your Life and Hooked: How to Build
Habit-Forming Products. Nir has taught at the Stanford Graduate School of
Business and the Hasso Plattner Institute of Design at Stanford. Nir is a
co-creator of this course.
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Welcome to your first lesson on Product Psychology!
This content is designed for people who want to know the deeper reasons
behind why people do what they do. This is for the busy entrepreneur,
designer, or marketer who wants to know techniques they can use to help
build better products and ultimately improve people’s lives.
We’ve asked our friends and colleagues for their top three to five resources
on important topics related to product psychology and user behavior.
They’ve taken the time to dig up their favorite articles, videos, and
resources to get you up to speed quickly.
Without further ado, here’s this week’s lesson. For this introduction, we
dive into why the psychology behind the things we use matters:
Ask yourself how user behaviors relevant to your business will be altered
by the devices we carry today and in the future.
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2. Behavior Can Be Designed
Give the four basic steps described in this guide a try. First, define the
behavior you want to change. Then, diagnose what is preventing the
behavior from happening. Next, look to the principles described in the
report and in future lessons to design ways to change the behavior. Finally,
test the outcomes of your experiment and adjust using different techniques
and psychological principles.
We should all ask ourselves, “Is changing user behavior in this way
worthwhile?” Before you embark on understanding product psychology,
here’s a framework for helping you answer this critically important question.
Consider the framework in the essay and ask yourself where you sit on the
Manipulation Matrix.
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Emotional Engagement – Designing with the Heart
in Mind
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What are the secrets to building emotionally engaging experiences?
Customer choices are influenced more by their emotions than we realize.
While most companies convey reasons to use their products, it is all too
typical to ignore a far more powerful lever, the opportunity to engage with
hearts as well as minds.
The resources I’ve assembled should point you on the path to thinking
about the rich emotional channels available to connect with your customer.
Studies of brain trauma victims have recently demonstrated that the ability
to perform logical inference and complex reasoning is not the core of
effective decision making. Neuroscientist Antonio Damasio found that when
people lose the ability to experience emotions, they cannot make up their
mind. As the philosopher Hume explained, “Reason is, and ought only to
be the slave of the passions.”
Identify which of your customers’ emotions guide them to engage with your
product.
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Emotional Design: Attractive Things Work Better
In this deck, which prefigures his book by the same name, David Rose
offers an inspiring vision of how designers can tap into the profound human
desires expressed in myths, fairytales, and superhero comics. Recurrent
yearning (for powers such as omniscience, protection, and self-expression)
spotlights profound emotional needs. Using that guidance, designers can
then consider how to endow ordinary physical objects with computational
signal processing. Crucially, the charm of such connectivity depends on
treating attention with a gentle touch. Rose exhorts designers to focus on
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communicating via pre-attentive processing, by lightening the load to
sustain emotional connection without causing cognitive overload.
Imagine how you might transform at least one interaction with your product
so that it can be managed via pre-attentive processing.
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Should You Listen To Your Users or Your Data?
Experiments at Airbnb
In this blog post, Airbnb Data Scientist Jan Overgoor describes how his
team uses controlled experiments to inform every step of the product
development cycle. He also addresses how experiments must be designed
and implemented in a way that protects against various sources of bias.
Where could you add controlled experiments in your product development?
How could you protect your experiments against bias?
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Which pitfall of A/B testing could apply to your current product
development?
What Fuels Great Design (and why most startups don’t do it)
In this article, Google Ventures Design Partner Braden Kowitz argues that
understanding and listening to your users is what fuels the design process
and addresses the most common reasons that designers (still) don’t do it.
Which of the excuses listed have you or your team made to avoid talking
with customers?
The Case for Talking to Users in the Age of Big Data (or, How I
Learned to Stop Worrying and Love Small Sample Sizes)
Even when they want to, there are some things your users cannot tell you.
Psychologist and Economics Nobel Laureate Daniel Kahneman spent his
career understanding the cognitive biases that prevent users from
accurately reporting their own experiences or motivations. In this review of
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Kahneman’s 2011 book, Thinking, Fast and Slow, New York Times reporter
Jim Holt reviews some of these biases, which frequently affect qualitative
product research.
One of Kahneman’s findings that I’ve found to be especially helpful is the
distinction between the “experiencing self” and the “remembering self.”
Designers and user researchers often prioritize the experiencing self. But
as Holt learns, “what makes the ‘experiencing self’ happy is not the same
as what makes the ‘remembering self’ happy” and, more importantly, “it is
the remembering self that calls the shots, not the experiencing self.”
How could you modify your user experience to entice the “remembering
self?”
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How Scarcity & Impatience Drive Irrational User
Behavior
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inconveniencing users or limiting their access to what they want. There are
many cases where, by merely raising prices, more people wanted to buy.
Similarly, by temporarily withholding great features for users, you can turn
indifferent consumers into fanatic evangelists.
After reading the examples of Scarcity given, can you think of times where
you became obsessed over something simply because it was barred from
you?
This piece relates Scarcity and Exclusivity to app development and product
rollouts.
What do you notice as the key differences between the effective examples
and the failed scarcity attempts?
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How can you apply some of these principles in scarcity to your own product
or business?
In this post, you will learn about how games use two Game Techniques to
monetize consumers who would never imagine themselves spending real
money to buy virtual currencies. We then explore how companies like
Dropbox utilize the same game technique, called Anchor Juxtaposition, to
monetize while growing virally.
Can you think about how to utilize the concepts of Framing, Prizing, and
Scarcity to drive more action and engagement from your customers or
users?
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Games, Play, and Motivation
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We can learn so much about human behavior by how people play.
Unfortunately, we’ve settled for using operant conditioning and mental
hacks in an effort to guide users toward predetermined outcomes.
But what else is known about motivation? And what happens if we focus
less on influencing desired behaviors and focus more on designing
open-ended, generative systems? How might we even design such
spaces? It’s still “psychology applied to design,” but in a much more
challenging, and ultimately much more rewarding, way!
Are you designing Paths or Sandboxes? That’s the question I pose in this
keynote, using two famous games – Candy Crush and Minecraft – as
exemplars for two fundamentally different ways to approach design. It’s
through this talk that I share my personal journey, from trying to shape and
influence a user’s path, to creating sandbox environments in which people
can play, amaze, and delight us.
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musings with plenty of examples and pop references. You’ll hear echoes of
“Paths” and “Sandboxes” as Deterding explores the ancient ideas of
“Ludus” and “Paidia” before moving onto more serious questions: “Can life
be a game? Should it? And if so, who is playing whom?” This is one of the
most thoughtful, well-considered, and clearly articulated talks on games
and play that I’ve seen.
Like any thoughtful talk, this one will leave you thinking about Life and the
lessons games may truly hold for us.
In this keynote from GameIt13, Amy Jo Kim, PhD looks at how video
games are changing, from the zero-sum, competitive games we’re all
accustomed to, to something more “co-operative.” While many of the
examples Amy Jo Kim shares are proper video games, her 7 Rules of
Cooperative Game Design could be applied to the design of just about any
social space.
What Motivates Us
This classic TED talk by Daniel Pink, illustrated by RSA, presents the latest
research into motivations. While it doesn’t explicitly talk about games, it
does get to the heart of why we pursue things and explains why and how
extrinsic rewards can be harmful.
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Interested in learning more? Pick up Dan Pink’s book “Drive” or look for
articles on “Self Determination Theory.”
A Playful Stance
In this wonderful talk from 2008, Kars Alfink looks at skateboarding, video
games, and numerous other examples to illustrate the benefits of designing
with “a playful stance.” Rather than attempt to control users, Alfink has
decided to embrace the unexpected that users will do.
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Designing Habit-Forming Products
I’ve spent the past 3 years researching how products create habits and I’ve
included a few articles to pique your interest. As you’ll soon learn, the world
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is becoming a more persuasive, and potentially addictive, place. Learning
how to create user habits and harness them to build new behaviors is a
super power that can be used for good or evil.
Can you find the hooks in the products you are most engaged with? Can
you find them in the product or service you are building?
In this article, the New York Times’ Charles Duhigg explains how
businesses create new habits and the powerful and beneficial ways they
can change people’s lives.
What habits are you trying to change with your product or service?
In this video, MIT professor Jesse Schell argues that new behaviors must
be things people “wanna” do, not “hafta” do. In other words, new behaviors
must be pleasurable, not forced.
Think about your own product or service and ask yourself if you are helping
users do something they want to do for the pleasure of it. How might you
inject more fun into your design?
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Hooking Users In 3 Steps: An Intro to Habit Testing
Now that you have a few users, how do you make your product more
habit-forming? In this essay, I discuss “Habit Testing,” a technique
companies use to identify and accentuate the habit-forming features of their
products.
Consider the three steps discussed in the article. Can you identify your
habitual users, codify the steps they take in your user flow, and then modify
the path new users will take to follow the same steps?
In this essay, legendary investor Paul Graham describes how the world is
becoming a more addictive place and the trends that will make using
technology harder to resist. Graham discusses the challenges of a more
persuasive world.
Consider the moral implications of designing for habits. What will users
gain and lose from more addictive products? Do you find yourself hooked
to any technologies to the detriment of other parts of your life?
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Writing Copy for Your Reader’s Brain
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copy that holds the reader’s attention. In addition, if the intent is to
persuade the reader (to buy a product, adopt a viewpoint on a social issue,
etc.), the content must be effective in that persuasion task.
For decades, if not centuries, writers have shared their tips for getting
attention and being persuasive. This advice has been based on
experience. More recently, though, brain and behavior research has shed
light on why some techniques are particularly effective and suggested
some new approaches as well.
I’ve been writing about applying brain and behavior research to real-world
marketing problems for ten years and these are a few of my favorite articles
on brain-oriented copy writing.
Can you recall the phrase that helped O.J. Simpson beat murder charges?
Most people can recall, “If the gloves don’t fit, you must acquit!” or a close
variation. Research shows that rhyme can actually make statements more
believable. Our brains translate ease of processing into “true.” This is a
powerful tool for crafting taglines, slogans, and other short statements.
Shakespeare Copywriting
Shakespeare may not have had access to brain imaging equipment, but his
writings have stayed vibrant and engaging for centuries. One of the many
techniques he used was “functional shift” – using a word in a different
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manner than expected. Researchers found that this kind of usage causes a
spike in brain activity – the use is unexpected, and the brain snaps to
attention to determine what’s going on.
What’s the difference between a “bad day” and a “rough day?” In English,
not much – the two phrases are equivalent in meaning. But to our brains,
they are very different. “Rough” is a textural metaphor and even though it
isn’t used in the literal sense, our brains still react as if the topic was
sandpaper or a rocky beach.
Try to rewrite your copy incorporating one or more textural metaphor words
to replace a similar word with no sensory overtone.
Adjective Power
Ever wonder why restaurants always talk about things like “farm-fresh
tomatoes” and “old-fashioned Vermont maple syrup?” Researcher Brian
Wansink found such labeling could boost sales by more than 25%. Several
categories of adjectives were most effective – sensory words, brands,
terms that evoked nostalgia, and others.
Adjectives can slow the reader down, but try to liven up a few of the
adjectives describing your product or service with at least one of the
characteristics identified by Wansink.
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Four Words That Double Persuasion
If your copy (or verbal pitch) has a call to action, try to incorporate a BYAF
statement in the sentences that precede it.
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Context Driven Design (“The Context Effect”)
Context matters. Our behavior and experience are largely affected by the
surrounding factors within which we interpret the situation (also known as
Context Effect in Cognitive Psychology). What we see, how much we eat,
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the way we act, and how we treat others are just a few examples of how
our daily experiences are determined by context – offline and online.
Modern context-aware computing capabilities now enable us to design for
context in its broader meaning – beyond location and in real time. Learning
how to design for context is key to delivering optimal user experience today
and in the years to come.
Age of Context
In this video presented at the Next Berlin conference, Robert Scoble, one
of the world’s best known tech journalists, describes how the five forces of
context – mobile, social media, data, sensors, and location – brought
together the conditions for the Age of Context.
Can you think of additional forces that contributed to the rise of context?
How do these forces affect your product or service?
(To learn more about this topic, see the book Age of Context: Mobile
Sensors, Data and the Future of Privacy by Robert Scoble and Shel Israel)
In this article, Cennydd Bowles delves into the seven flavours of context
(DETAILS: Device, Environmental, Time, Activity, Individual and Social),
providing a comprehensive framework for approaching context-driven
design.
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Think about your own product or service and ask yourself – which of these
seven flavours are dominant along your experience flows? How might they
affect your design, both today and three years from now?
In this article, Loren Davie, CEO and founder of Axilent, offers a new
design metaphor to guide us as we walk into a new world of contextual
applications: Conversations. In face-to-face conversations, we take our
partner’s context into account when responding. Davie proposes we do the
same with design.
Putting on the Conversations lens – how does it change the way you think
about your users and their interactions with your product or service?
Adaptive design is about learning the environment and the user and
adapting to their current needs and situation. Can you identify the set of
contexts & flows where your product or service would be enhanced by
adaptivity?
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How to Do Effective User Research
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must put on your observational and analytical hats to ask HOW and WHY,
not just what and when. You can learn how to identify motivated users and
gain insights into ways to design meaningful solutions that people will use.
What do you need to know about your users? And what will you use that
knowledge (data) for?
What do your users believe about themselves that may influence the way
they interact with your design?
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Understanding the Psychology Behind Game Design
With sales in the tens of billions of dollars each year, just about everybody
is playing some kind of video game, be it on a console, computer,
Facebook, or phone. Much of the medium’s success is built on careful
adherence to basic principles of psychology, which is becoming even more
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important as games become more social and sophisticated. For the last
few years, I’ve been writing about the overlap between game design and
psychology. Understanding the intersection of those two disciplines can not
only help you make better products games, but get more out of games as a
player on your own terms.
Think about how the traits of toxic player behavior can manifest themselves
in other products. How can users be nudged to avoid such behavior?
Think about new ways to satisfy needs for relatedness, autonomy, and
mastery in your product.
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Skinner Boxes and Game Design
In this video, the Extra Credits team tell us about the behavioral revolution
in psychology led by B.F. Skinner and how his insights into learned
behaviors both help and hinder game development.
Think about Skinner boxes and rewards that exist only out of tradition and
how they can be cut out or changed.
Consider what rewards exist in your product and how their scheduling
affects user motivation.
It’s not over once the game is designed and on shelves, though. The
Reality Check team explores some of the psychological levers that Steam
and other digital distribution outlets use to move gamers during big sales
events.
Think about where else these psychological sales techniques appear, and
whether the strategies you’ve developed to resist them elsewhere also
apply to digital sales.
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Psychological Flow and Game Design
Consider how your product satisfies or doesn’t satisfy the requirements for
psychological flow and how it could be changed.
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Developing User Empathy with Design Sprints
How could you and/or your team implement a design sprint in the next
month?
While at thoughtbot, we had to adapt and modify certain aspects for our
clients, specifically deliverables other than the final prototype. Consider
what you would modify, remove, or add to get the best results with your
organization. After a year running sprints myself, I wrote up a lengthy list of
learnings.
Consider what you would modify, remove, or add to get the best results
with your organization.
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For outside inspiration, steal from the best. IDEO also offers an extended
free course in implementing concepts from Human Centered Design.
Choose one (or both!) of these free resources and begin going through
their material this week.
Your results will only be as good as your research. Draw from Moishe
Lettvin’s deep experience mining for insights out of customer interviews.
Using Moishe’s advice, how could you and/or your team develop and
implement a customer interview that will provide new insights?
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Web Psychology – The Science of Online
Persuasion
In this keynote for the Royal Institution, I explain how you can use specific
scientific principles from the worlds of psychology, design, and behavioural
economics to design more persuasive, effective websites and marketing.
Which principles will you apply to your website or marketing to target the
primal, emotional, and rational motivation systems of your customers? And
how will you test their efficacy?
Video marketing is hard. When the majority of your potential customers are
skipping ads on YouTube, how can you purposefully design a video that will
make this hostile audience want to watch more? In this high-octane
presentation, video strategist Phil Nottingham and I show you the 3 crucial
steps you need to take to design persuasive videos that will engage your
audiences and increase your reach.
How can you apply the elements in this paper to better motivate, enable,
and trigger your customers to reach a mutually beneficial goal?
In this free, exclusive sneak peek into Increase Your Web of Influence,
you’ll learn some of the secret strategies that make your prospects and
clients click. You’ll get a full lesson on how the different systems in the brain
influence our online behaviour, including homework for you to complete.
Complete the homework in this course to help you apply the principles
you’ve learned.
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Does Your Product Rely On Intuition Or
Deliberation?
Most products ask their users to do something new and different from their
daily lives in order for the user to benefit from the product. Sometimes
that’s to make a careful choice about where to live (Zillow) or to regularly
post updates about their lives (Facebook or Twitter). These requests are
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handled by different parts of the brain, however, and successful products
tailor how they ask according to what type of thinking they require.
Dual process theory can help us understand what type of behavior we’re
asking for! And, how to appropriately ask.
Switch
In this excerpt from their book, Chip and Dan Heath offer a simple, clear
metaphor for dual process theory and how it shapes our daily behavior: the
rider and the elephant. The careful, thoughtful rider looks out over the world
and considers where to go next – but the strong, unthinking elephant is
really in control most of the time. The rider is our deliberative mind and the
elephant is our intuitive mind.
Is your product primarily appealing to the rider or the elephant? How is that
affecting your users?
After learning of the mind’s two systems, consider whether your product
appeals to System 1 (reactions, emotion) or System 2 (conscious
deliberation).
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In my book, I show you how to apply dual process theory and other
behavioral lessons to the development of consumer products, so you can
identify the behavioral obstacles that stop your users from signing up and
using your product. You then learn how to design your product around
these obstacles, making the product more effective and your users happier.
This free toolkit walks you through the theory and practice of the book to
get you started on your own product.
You can also read a summary of the book’s concepts here.
What behavioral obstacles do your users face when they try to use your
product? What behavioral interventions can you use to overcome them?
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Onboarding Matters – Getting Users Engaged in
your Product
The moment someone shows up at your product for the first time is
incredibly important for their understanding of your product and long term
usage. Most products try to rush this process to get you immediately into
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the product. This often fails — since most products are actually hard to use
and aren’t really set up right for the new user.
Instead, the best onboarding flows help the user learn what to expect and
how to use the product. Having worked on the early days of building
LinkedIn, Facebook Connect, and Twitter, I’ve seen a number of different
approaches to growth. I’ve included a few links to help learn more about
getting users activated on your product. As you’ll learn, by putting as much
focus on onboarding as you do on your core product, you’ll see meaningful
impact.
In this article, the Intercom team outlines key elements of onboarding that
can help you educate and convert new users. Sections 4 and 5 are my
favorites around taking the user step by step through your product so they
end up set up well.
Watch this video of me sharing stories from early LinkedIn and Twitter on
how we addressed growth. In the Twitter “Learn Flow” section, I talk
specifically about how we rebuilt the sign up flow to ask the user to take
specific actions around each one of the core concepts of using Twitter:
Tweets, Following, following key news / entertainment categories, following
friends. Teaching users about Twitter as they signed up had a significant
impact on the overall growth.
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Think about the key steps and concepts you would want to teach someone
to get the most value out of your product long term. Sketch how you would
design a couple of steps for onboarding – one per slide.
Onboarding Teardowns
This website does a great job breaking down the onboarding flows of many
top products today. Go through many of the tear downs and copy down
your favorite tactics and ideas that you want to apply to your product.
Go back through your own product or favorite product not listed and create
your own teardown. What steps feel like too much, what important steps do
you think you are missing?
I wrote this blog post in fall of 2012 to help people focus on the most
important metric of active users. As you build onboarding, you should focus
on how many people you convert and activate into key behaviors — as
evidenced by the core metric.
What core metrics would you use to describe your product and how well
people really use it?
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A Handy Behavioral Design Toolkit
Product design is one of the most complicated disciplines there is. This is
because of the nature of our subject: people. All of us are infinitely complex
and unpredictable. Our behavior depends on a myriad of factors, each of
which is constantly in flux.
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But luckily for us, there are still fundamental laws of human behavior that
can guide our product design process: the laws of behavioral design. For
example, if you deeply understand that people are lazy and will work to do
as little mental work as possible, it will change the way you envision and
design your product or service. If you understand that people are forgetful
and powerfully directed by their environments, it will also change the way
you prioritize your features.
The goal of my module is to give you a small toolkit that you can use to
solve any product conundrum that comes your way.
Behavior Model
We’ll start with two overviews of BJ Fogg’s Behavior Model. The first
overview is written by BJ himself at behaviormodel.org. On the site, he
outlines the basics of the model and then delves into each of the model’s
components in much more detail.
The second overview is written by yours truly. In the article, I review the
behavior model in plain English with a few examples. After you read
through each of these resources, you’ll be able to think about behavioral
design in a much more granular manner, breaking down any behavior
problem into its three component parts:
● Trigger (cue)
● Ability
● Motivation
This will give you a vision of humanity and our mental life that will allow you
to put your habit formation work into context. Once you understand on an
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intuitive level that we’re energy conserving creatures that are good at
thinking in concrete terms and constantly drawn to multitasking (where we
waste away much of our time), you’ll start to develop products that fit better
with the reality of people’s physical and mental lives.
Look at the behaviors your product asks its users to perform. Does it follow
the principles of habit formation? If not, how could you change it so that it
does?
Habit Formation
At this point, you have a basic understanding of what needs to occur for a
singular instance of behavior to occur. However, as product designers we
want people to use our product regularly–we want to make sure that our
users perform our product’s key behaviors on a daily, or weekly, basis. In
other words, we want them to form a habit around our product.
One of the best overviews of the habit formation process is Charles
Duhigg’s book The Power of Habit. However, I’m not going to ask you to
read a 416 page tome as part of this course (though I encourage you to).
Instead, I recommend that you check out the article he wrote for The New
York Times Magazine. It will give you a great, well-written overview of the
science of habit formation and how it’s successfully used in a real world
context (a department store).
For good measure, I’m also throwing in a fun little article I wrote earlier this
year on “Four Principles of Habit Formation.” To write this article, I thought
about the key behavioral/psychological quirks that are the foundation for
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our, often unfortunate, behavioral predilections. I boiled everything down
into four quirks:
1. We’re lazy
2. We’re bad at thinking about abstractions (but do it all the time,
anyways)
3. We’re bad at multitasking (but do it constantly)
4. We’re usually lazy for a reason (energy/health issues)
This will give you a vision of humanity and our mental life that will allow you
to put your habit formation work into context. Once you understand on an
intuitive level that we’re energy conserving creatures that are good at
thinking in concrete terms and constantly drawn to multitasking (where we
waste away much of our time), you’ll start to develop products that fit better
with the reality of people’s physical and mental lives.
Look at the behaviors your product asks its users to perform. Does it follow
the principles of habit formation? If not, how could you change it so that it
does?
Finally, we’ll end the module with a bit of fun–my nine user experience tips.
These are the most fundamental pieces of advice I could think of, based
upon my years of UX design work on dozens of products.
They’re simple (maybe too simple), but I still hope you find them helpful. All
of them can be traced to some psychological finding or truism and I’ve
heard from many people that they’ve been enlightening and helpful in the
heat of the messy design process. I worked hard to pick out the nine most
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common and impactful mistakes that product designers make and come up
with a behavioral design rule to protect against them.
If you have ideas for new rules, or don’t agree with one that I’ve outlined,
please let me know. I’m always up for a good debate and, if warranted, a
revision to my list :).
Which of the 9 design mistakes have you found yourself making in your
own work? How could you correct them using the tips given?
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Mastering Pricing Principles
There’s a reason people on Craigslist are always overvaluing their crap: the
right “price” cannot be perfectly deduced; it is highly dependent on context.
Legendary investor Warren Buffet once said, “Price is what you pay, value
is what you get.” Since time immemorial, entrepreneurs and salesmen have
tried to figure out how to sell their value at the “optimal” price. Fact is,
looking for the “perfect” price which extracts maximum revenue from every
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single customer is like searching for the holy grail; this is an art, not a
science. However, that doesn’t mean we can’t use time tested research
and analysis to help us evaluate and reconsider our own prices. Here are a
few must-read resources to get you started.
The best introduction to pricing around. While books like The Strategy and
Tactics of Pricing are better deep dives into the topic, The Psychology of
Price covers all the bases one needs to have a fundamental understanding
of this complex topic.
The best way to put this book to work is to write-up your own “SparkNotes”
once you’ve finished reading. I know that sounds slightly tedious, but it’s a
great way to go from A –> B on pricing knowledge (from dummy to
informed, so to speak).
While you’ll see many of these papers scattered throughout the web, I
hadn’t seen a great evaluation of all of the most important pricing research,
so I wrote one myself.
Think about a few times you’ve seen these pricing ploys in action — were
you able to recognize them? Did they sway your decision-making anyway?
Why or why not?
I encourage you to read this review and decide which sort of reader you
are; if you think the first half of the book (which focuses on the “why”) will
slow you down, read the second half (with the examples) first, and then
come back to page 1.
Pricing is not often just the act of figuring out what to charge; there’s also
the mental game. Overcoming fears like “What if every customer abandons
me because I raised my prices?!” is something every entrepreneur
struggles with; here are a few principles to always keep in mind.
After reading, consider if you’ve ever faced any of the decisions outlined in
this essay. What was your response? If you hesitated to take action, what
stopped you?
and
Even if you’re not in SaaS, these are exceptional reads with deep
psychological insights on common mistakes entrepreneurs make in pricing
their products. Fax it like it’s 1999.
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Go to your current pricing page after reading this (hell, print it out if you
have to!) and markup where you are making the mistakes outlined in these
essays.
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When Persuasion Becomes Deception
Today’s lesson is about Dark Patterns: user interfaces that are purposefully
designed to deceive and manipulate users.
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through the steps of buying a flight on jetstar.com, but without paying extra
for seating.
Remember, the whole point of Dark Patterns is that they are designed to
exist in a grey area where they are legal and are implemented to only catch
out a small percentage of the population, not every single user.
It’s important that you develop your own opinion on this matter. Were
justfab.com acting ethically? What should they have done differently in
order to stay within your definition of ethical design?
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gets the initial experience for free, and then pays for various “optional”
things as they play through the games. As you can imagine, there is a huge
opportunity for Dark Patterns in designing games to coerce users into
spending more money than they really intend. To start off your learning in
this area, you should read about the psychology of casino slot machines,
which has a lot in common with this sort of F2P game. Natasha Shull’s
book Addiction by Design is a real eye-opener. This 30 minute presentation
sums up many of her key points.
Having taken that in, you should read these articles on Free to Play game
economics, Game Design Corruption, and, finally, Dark Patterns in the
Design of Games.
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detection to show more expensive deals to Mac users than to PC users.
According to their Chief Data Scientist Wai Gen Yee, “Mac users tend to
stay in more expensive rooms.”
It’s entirely feasible to imagine such practices will seep out into the real
world. The research paper Dark Patterns in Proxemic Interactions explores
a number of such scenarios.
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Building Community Starts with Understanding
People
Which rewards are right for your product? Are you focusing on the right
one(s)?
What steps are you taking to delight your community and appeal to their
internal desires?
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Richard Bartle classifies video game players into four categories:
Achievers, Explorers, Socializers, and Killers. But these characteristics
aren’t just limited to gaming; it can also be used to better understand one’s
community.
How would you classify your audience and how might you change the
product to appeal to a broader audience?
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