Sharpening the Competitive Edge.

 User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies. 

Many entrepreneurs fall into the trap of building products that are only marginally better than existing solutions, hoping their innovation will be good enough to woo customers away from existing products. But when it comes to shaking consumers’ old habits, these naive entrepreneurs often find that better products don’t always win—especially if a large number of users have already adopted a competing product.

A classic paper by John Gourville, a professor of marketing at Harvard Business School, stipulates that “many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.”

Gourville claims that for new entrants to stand a chance, they can’t just be better, they must be nine times better. Why such a high bar? Because old habits die hard and new products or services need to offer dramatic improvements to shake users out of old routines. Gourville writes that products that require a high degree of behavior change are doomed to fail even if the benefits of using the new product are clear and substantial.

For example, the technology I am using to write this book is inferior to existing alternatives in many ways. I’m referring to the QWERTY keyboard which was first developed in the 1870s for the now-ancient typewriter. QWERTY was designed with commonly used characters spaced far apart. This layout prevented typists from jamming the metal type bars of early machines.

This physical limitation is an anachronism in the digital age, yet QWERTY keyboards remain the standard despite the invention of far better layouts. Professor August Dvorak’s keyboard design, for example, placed vowels in the center row, increasing typing speed and accuracy. Though patented in 1932, the Dvorak Simplified Keyboard was written off. QWERTY survives due to the high costs of changing user behavior. When first introduced to the keyboard, we use the hunt-and-peck method. After months of practice, we instinctively learn to activate all our fingers in response to our thoughts with little-to-no conscious effort, and the words begin to flow effortlessly from mind to screen. But switching to an unfamiliar keyboard—even if more efficient—would force us to relearn how to type. Fat chance!

As we will learn in chapter 5, users also increase their dependency on habit-forming products by storing value in them—further reducing the likelihood of switching to an alternative. For example, every e-mail sent and received using Google’s Gmail is stored indefinitely, providing users with a lasting repository of past conversations. New followers on Twitter increase users’ clout and amplify their ability to transmit messages to their communities. Memories and experiences captured on Instagram are added to one’s digital scrapbook. Switching to a new e-mail service, social network, or photo-sharing app becomes more difficult the more people use them. The nontransferable value created and stored inside these services discourages users from leaving.

Ultimately, user habits increase a business’s return on investment. Higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharpened competitive edge together equal a more powerful bang for the company’s buck. 

Building the Mind Monopoly.

 While user habits are a boon to companies fortunate enough to engender them, their existence inherently makes success less likely for new innovations and start-ups trying to disrupt the status quo. The fact is that successfully changing long-term user habits is exceptionally rare.

Altering behavior requires not only an understanding of how to persuade people to act—for example, the first time they land on a web page—but also necessitates getting them to repeat behaviors for long periods, ideally for the rest of their lives.

Companies that succeed in building a habit-forming business are often associated with game-changing, wildly successful innovation. But like any discipline, habit design has rules and caveats that define and explain why some products change lives while others do not.

For one, new behaviors have a short half-life, as our minds tend to revert to our old ways of thinking and doing. Experiments show that lab animals habituated to new behaviors tend to regress to their first learned behaviors over time. To borrow a term from accounting, behaviors are LIFO—“last in, first out.” In other words, the habits you’ve most recently acquired are also the ones most likely to go soonest.  

This helps explain the overwhelming evidence that people rarely change their habits for long. Two-thirds of alcoholics who complete a rehabilitation program will pick up the bottle, and their old habits, within a year’s time. Research shows that nearly everyone who loses weight on a diet gains back the pounds within two years.

The enemy of forming new habits is past behaviors, and research suggests that old habits die hard. Even when we change our routines, neural pathways remain etched in our brains, ready to be reactivated when we lose focus. This presents an especially difficult challenge for product designers trying to create new lines or businesses based on forming new habits.

For new behaviors to really take hold, they must occur often. In a recent study at the University College London, researchers followed participants as they attempted to form a habit of flossing their teeth. As one of its findings, the study concluded that the more frequently the new behavior occurred, the stronger the habit became. Like flossing, frequent engagement with a product —especially over a short period of time—increases the likelihood of forming new routines.

Google Search provides an example of a service built upon a frequent behavior that helped create users’ habits. If you’re skeptical that Google is habit forming (and you are a frequent Google user), just try using Bing. In a head-to-head comparison of the efficacy of an incognito search, the products are nearly identical. Even if the geniuses at Google have in fact perfected a faster algorithm, the time saved is imperceptible to everyone but robots and Mr. Spock. Milliseconds matter, but they don’t hook users. 

So why haven’t more Google users switched to Bing? Habits keep users loyal. If a user is familiar with the Google interface, switching to Bing requires cognitive effort. Although many aspects of Bing are similar to Google, even a slight change in pixel placement forces the would-be user to learn a new way of interacting with the site. Adapting to the differences in the Bing interface is what actually slows down regular Google users and makes Bing feel inferior, not the technology itself.

Internet searches occur so frequently that Google is able to cement itself as the one and only solution in the habituated user’s mind. Users no longer need to think about whether or not to use Google; they just do. Furthermore, whenever the company can identify the user through tracking technology, it improves search results based on past behaviors to deliver a more accurate and personalized experience, reinforcing the user’s connection with the search engine. The more the product is used, the better the algorithm gets, and thus the more it is used. The result is a virtuous cycle of habit-driven behavior resulting in Google’s market domination.