There is a four-step ‘habit loop’ that underlies all of human behaviour: cue, craving, response, and reward. When repeated, this neurological feedback loop leads to the formation of new habits.
THE FOUR LAWS OF BEHAVIOURAL CHANGE
1. Cue: Make it obvious.
2. Craving: Make it attractive.
3. Response: Make it easy.
4. Reward: Make it satisfying.
Note: These four laws can be applied to make any behaviour easier (and the inversion of each law can be applied to make any behaviour harder). In business, these same principles can be used to create more effective products and services and also help employees establish more effective habits.
THE 1ST LAW
The 1st Law of Behavioural Change is to make it obvious. This law is connected to the cue, which is the first step of the habit loop. A cue is anything that gets your attention (or your customer’s attention) and signifies what to do next. As you might expect, cues that are more obvious will be more likely to get a person’s attention and, as a result, are more likely to be acted upon.
This is one reason why advertising often feels intrusive. Many ads are loud, bright, glaring, and eye-catching—even if they are gaudy—because they are trying to be as obvious as possible.
The dozens of notifications that light up your phone, computer screen, social media networks, and software programs are an example of “making it obvious” for the user to know what to do next. In fact, many companies have found that the more notifications they send (text messages, email blasts, alerts, etc.), the more users will engage with their product. Many companies have realized that each reminder makes the product or service obvious again and the user remembers to come back to it.
As a user, this can be incredibly annoying: companies often appear to be in a race to the bottom to grab your attention and the app who interrupts you the most wins. The converse is also true.
In support of the 1st law, we would expect behaviours that are less obvious or prevalent to be less likely to occur. The ad placed below the fold is obviously clicked on less than the banner running at the top of the page. The products stored on the bottom shelf are less likely to be purchased. And so on. When an item or an action is invisible, it is often forgotten. This is one reason software companies hide buttons like “Cancel Account” and “Log Out” in hard-to-find places, nestled deep within the settings and menus.
Additionally, whenever possible you want to make anything that could distract the user from the desired behaviour invisible. It’s no surprise that many of the most habit-forming behaviours—like playing a slot machine at a casino—are solitary. There are no windows, very few distractions, and nothing but slot machines surrounding each player. It’s very easy to get into “the zone” and continue playing because distractions are invisible and the desired behaviour is obvious.
Businesses can utilize the 1st Law of Behavioural Change in many ways. Put your most profitable product in the front of the store or in the most visible locations. Include instructions with each product that prompt users to display your product in a prominent place in their home or on the home screen of their device. The most obvious cue is often the one that captures your attention. And the cue that gets your attention is the one that can initiate a habit.
THE 2ND LAW
The 2nd Law of Behavioural Change is to make it attractive. This law is connected to the craving, which is the second step of the habit loop. As we discussed in the 1st Law, you want your product to be obvious (e.g. at the top of the email inbox or on a huge billboard or sitting at the front of the store), but once it’s in an obvious location, you need the image it creates in the customer’s mind to be attractive.
Remember that every behaviour is preceded by a prediction. When it comes to business, this means every purchase is preceded by a prediction. This is a key point. The customer does not buy your product; they buy the prediction it creates in their mind. They look at all of the soda bottles in the vending machine and predict Coke will taste the best, so they buy it. Or, they choose the service with the best reviews because they predict it will be the most satisfying experience.
For many products, “making it attractive” comes down to explaining the benefits in a clear and compelling way. Choosing the correct words makes the message attractive and the product “beautiful” in the customer’s mind.
Personalizing the message can also be an effective way to implement the 2nd Law of Behavioural Change because products are often more attractive when they seem relevant to the customer’s life. If you’re a freelance writer, for example, it is more powerful to read a sales page with the title, “Exactly How to Double Your Income as a Freelance Writer” than to read, “How to Double Your Income.” It’s the same pitch, but the first one feels like it’s made for you.
Note: This strategy is even more powerful if you can use the person’s first name. Imagine if the freelance writer mentioned above was named Olivia and she received an email with the subject, “Olivia, here’s exactly how to double your income as a freelance writer.”
Similarly, many online retailers create offers that are highly personalized. Rather than offering a product for “managers,” they display different text on the sales page depending on who is looking at the screen. Depending on their title, one person sees a product for “chief financial offers” and another sees the same product pitched for “marketing managers.”
This strategy can be used in nearly any area of life. Everyone is “selling” something, even if it doesn’t feel like sales. Doctors sell healthy lifestyle changes to their patients. Coaches sell teamwork to their players. Parents sell life skills to their kids. Making your message personal—something as simple as saying the other person’s name—helps connect with people in a meaningful way and is one way to make change more attractive.
Amazon utilizes personalization every day. The company often used collaborative filtering to showcase items a customer has viewed recently (or products that are similar to what they have purchased in the past.) It becomes very attractive to spend money on Amazon because customers are always seeing what is relevant to them.
Of course, individual personalization is not always possible, but businesses can often “personalize” at scale if they pair the product with a strong identity. For example, Toyota has been able to connect driving a Prius with being environmentally friendly. If you are the type of person who believes strongly in helping the environment, then buying a Prius is a way to signal your identity to others.
The product instantly becomes more attractive to a certain type of consumer because it feels like an extension of their identity. This type of connection can be incredibly powerful, which means it might be useful to highlight the identity your product represents.
Another strategy that can increase the attractiveness of a product is highlighting social norms. Humans are heavily influenced by the crowd. If you can show a customer that other people like them use your product or service— people in their zip code, from their hometown, on their team, etc.—they will be more likely to find it attractive themselves.
There is an important caveat here that deals with framing: If people think the behaviour your product or service requires is rare, you should frame those who have it in a positive light (achieving status): “60% of millionaires read one book every day. With our new product, you can too.”
If people think the behaviour your product or service requires is common, then frame those who don’t do it in a negative light (deviating from the norm): “75% of people in your neighbourhood are paying less than you on their energy bill. Click here and learn how to not miss out on these savings.”
Finally, you can make any product inherently more attractive by employing the 3rd and 4th Laws of Behavioural Change. Behaviours that are “cheap”—easy to do, low social costs, immediate payoffs—are attractive. Behaviours that are “expensive”—hard to do, high social costs, delayed payoffs—are unattractive. Let’s talk more about how to get those two laws working in your favour.
THE 3RD LAW
The 3rd Law of Behavioural Change is to make it easy. This law is associated with the response, which is the actual behaviour or habit that you perform. Behaviours are more likely to be performed when they are easy—that is, when they can be accomplished with ease.
From a business standpoint, perhaps the most effective way to employ the 3rd Law of Behavioural Change is to map out the chain of behaviours that a customer must perform to purchase your product or use your service, and then search for any possible area where you can reduce the friction associated with the task.
Imagine the first ride-sharing services like Uber or Lyft. When they were launching, they could have mapped out the chain of behaviours a customer had to perform to get a ride across town: walk outside, wait for a taxi to pass on the street, get in, ride across town, arrive at destination, pull out a credit card or cash, pay for the ride, put the credit card (or any change) back in their purse or wallet, get out of the car, etc.
Then, the company could look at each stage and ask themselves how they could reduce the friction associated with the task (or eliminate that step entirely):
- How can we make it easier to walk outside? What if users could download an app that would summon a car from their phone and didn’t have to walk outside at all?
- How can we make it easier to wait for the ride? What if we told users how long it would be until a ride arrived? Then they could just walk outside at the right moment.
- How can we make it easier to get in the car? No change.
- How can we make it easier to ride across town? Rather than leave it up to the driver’s memory, we could display the route on the user's phone and the driver’s phone. Now the user can make suggestions if they want to go a different way and the driver can rely on the GPS for up-to-date information and routing.
- How can we make it easier to pay for the ride? We already have an app on the user’s phone. What if we asked users to upload their credit card information? Then, they could pay automatically and just exit the car once they arrive. And so on.
Business is a never-ending quest to deliver the same result in an easier fashion. The idea is to make every phase of the process as convenient as possible.
Consider the timeline of Amazon’s shipping policies:
- 1994: Amazon founded.
- 2002: Amazon launches Free Super Saver Shipping with free shipping on orders over $99.
- 2005: Amazon launches Amazon Prime with free two-day shipping on all products.
- 2014: Amazon launches “Read While Your Book Ships” so people who bought the print version of a book can read the Kindle version instantly while they wait for the purchase to arrive in the mail.
- 2018: Amazon launches free grocery delivery within two hours.
Amazon is continually looking to give customers what they want in an easier, faster, and more convenient fashion: Get it shipped. Get it shipped free. Get it shipped free in two days. Get it shipped free in two hours. Get it right now while you wait for us to ship it to you free in two days.
Great businesses remove every point of friction they can think of to make the desired behaviour as easy as possible.
THE 4TH LAW
The 4th Law of Behavioural Change is to make it satisfying. The final stage of the habit loop is the reward. If there is a reward associated with a behaviour—that is, it feels good and has a satisfying ending—then we have a reason to repeat it in the future.
The first three laws of behavioural change—make it obvious, make it attractive, and make it easy—increase the odds that a behaviour will be performed this time. The fourth law of behavioural change—make it satisfying—increases the odds that a behaviour will be repeated next time. It completes the habit loop.
In business, making your product or service satisfying increases the odds that a customer will return next time. It is the fourth stage that closes the loop and encourages your customers to use your product or service habitually.
The speed of the reward is also a crucial factor in the 4th Law of Behavioural Change. Customers need to feel immediately successful—even if it’s just in some small way—each time they use a product or service. At a minimum, the product should solve the problem (i.e. resolve the craving they experienced in Law 2) and, if possible, it should do so with some surprise and/or delight as well.
Creating a satisfying experience requires a balance between the 2nd Law (make it attractive) and the 4th Law (make it satisfying) because your level of satisfaction is directly linked to your level of expectation and desire.
The danger of making too big a promise is that you’ll get people to buy once, but they won’t have a reason to buy again. Think: massive discounts that aren’t followed with great experiences or the sales team making a promise that the product team can’t deliver on. Huge expectations might trigger a single sale, but you’ll never create a buying habit.
One way to employ the 4th Law is to drop in little bits of satisfaction throughout the experience. For example, car manufacturers have begun to add fake engine noise to their cars and trucks to create a satisfying growl when the owner punches the accelerator.
Behaviours that make you feel good—that is, behaviours that are followed by an immediate sense of satisfaction or praise or encouragement or pleasure—are exactly the kind of behaviours you want to repeat in the future.
SUMMARY
An example of an addictive product is the slot machine, and indeed you’ll find that they employ all four laws of behavioural change.
Make It Obvious: Slot machines are extremely profitable and casinos know it. That’s why the first thing they do is make them obvious: slot machines outnumber table games 100-to-1 in nearly every casino.
Make It Attractive: Many electronic slot machines strategically employ the near-miss effect to create a false sense of reward. A near-miss occurs when the winning symbol appears just above or below the pay line. Imagine tapping the spin button, watching the wheels rotate, and seeing two cherries line up—but the third cherry narrowly misses. You almost won the jackpot.
That “almost” feeling tricks your brain into predicting the reward is now closer than before. With a little more work, you might be able to get it. After a near-miss, the reward system in your brain will light up with anticipation. Many machines are intentionally programmed to deliver near-misses more frequently than would arise by pure chance. By teasing a jackpot, the designers make the game more engaging, but they are also deceiving users by making them feel like a win is closer even though the odds of winning are no better than before.
Make It Easy: The entire experience of playing slots is designed to be easy. The chairs are comfortable enough to sit in for hours. Most machines don’t even require you to pull a lever anymore. Playing another round is as simple as pressing the SPIN button. When you run out of money, casinos make it as easy as possible to get more. Many slot machines allow you to pay directly from your seat. ATMs are always easy to access, and cash advance and debit withdrawal options are available when your account is empty.
Make It Satisfying: The only unsatisfying part of the experience is losing money, and slot machines are designed to hide this as best as possible. They make it difficult to tell how much money you are spending.
The traditional slot machine is just a lever and one wheel, but electronic slot machines allow users to play multiple wheels at the same time. Imagine a screen with one hundred tiny slot machine wheels spinning at once. Each time you press the spin button, you bet one hundred pennies—one per wheel. Say you win on thirty wheels during this particular turn. The machine will highlight your thirty wins. Flashing lights go off in celebration and the machine plays the sound of coins clinking into the dish. It feels as if you won thirty cents, but you really lost seventy cents. The machine frames a loss as a win.
The results? Casino patrons bet more than $37 billion annually—more than Americans spend attending sporting events ($17.8 billion), going to the movies ($10.7 billion), and buying music ($6.8 billion) combined.
This is the remarkable effect you get when you employ all four laws of behavioural change at once. When all the levers are pointed in the same direction, the likelihood of a given behaviour is amplifies exponentially.
