The Secret Of Viral Apps: User Investment

Let me introduce you to the loop. It starts with an internal trigger (you were bored and while browsing, came across this blog) or an external trigger (an app notification). This is followed by an action in response to the trigger (you click the link or the app) and a reward (see the message or the tagged picture) for the action you performed. Now, the fourth step is critical. This step helps us cement new habits. In the fourth step, we either choose to increase your reward or make the triggers a lot more common. Consider how you passed the time while stuck in traffic today. Perhaps you opened Twitter or LinkedIn, whichever encouraged you first with a notification. When you open it, it’s not just the message or tag you’re welcomed with. There’s new updates, interesting links and funny memes flooding your timeline. Here is when you choose to invest. You invest by following more people, increasing the trigger (notification) and the reward (a timeline with more pet videos maybe?). We call this a habit loop, the cornerstone of User Investment.

When we say user investment, it refers to all activities that motivate your users to spend more time and effort interacting with your product in a way that ultimately makes your product more valuable to them. Don’t confuse it with user engagement, although user engagement plays an integral part in how much your users are willing to invest. In this blog, we’ll help you understand how to make your users invest in your product. User onboarding is one of the most integral parts of the customer journey. Designing it for user investment is the first step which will have the greatest impact on your user retention and engagement.

User onboarding

Take Twitter, it not only asks you to choose a handle, email address and password during sign-up, but also encourages you to follow five to ten people on the platform. Conventional wisdom has drilled the importance of a streamlined sign-up flow into us. So why make new users follow people right away? The answer lies in the analysis of their user retention rates. The strongest indicator of new sign-ups who turn into regular users was that these users followed five or more other Tweeters right after joining. Following other Tweeters from the start meant that they could see content in their timeline right away and over time, a steady stream of new content drew them back into the service.

To incentivize user investment which would bring them long-term value, Dropbox chooses to offer short-term rewards. The facility of sharing content with other people is one of Dropbox’s main value offering, but this feature remains only as valuable as the people one can share with. So by offering a short-term reward of extra storage capacity, Dropbox encourages users to get their friends and colleagues to sign up. LinkedIn employs a slightly different tactic to encourage user investment. It displays a “profile completeness” score which stretches beyond the onboarding process. Instead of encouraging you to enter more about your professional experience and making you connect to more contacts on LinkedIn by offering freebies, LinkedIn displays a visual reminder about how you haven’t finished setting up your profile. By doing so, they tap into a certain part of human nature that can’t resist increasing our ‘scores.'

User investment vs. user engagement

Investment is a little tricky to measure. Personally, the best example when it comes to me is Facebook vs. Twitter. I’m invested in Twitter. I use it to scout information. I use it to promote my blog. I invest in Twitter and expect a return. When the returns stop, I will stop using it. On the other hand, with Facebook, I’m engaged. I probably open it once in a day. If it were to go off the market, my routine wouldn’t be affected too much. Of course, it’s nice to keep up with friends on social media, but there are better ways to do that and not knowing what most of my high school friends are doing won’t kill me. Facebook might engage me, but I'm invested in Twitter. Hence, I am a more valuable user to Twitter than I am to Facebook.

This might be the reverse for you. You see, people invest in networks that provide them the most value. The more measurable utility or value your network has, the more your users will invest in it. The moment your users start investing, your product starts embedding itself into their lives, they start organically sharing it with their circle, evangelizing its value. Engagement is important here. It can lead to user investment. Nevertheless, you’ll notice that network-based businesses have more than just engaged users, they have invested users.

Won’t this mean making my users work?

In a world where the rise of design thinking and a marketplace dominated by products like the iPhone has led us to believe that products should remain as easy to use as possible. But, you see absolute rules regarding how we must interact with technology, like the law that design must always reduce the work users will have to expend doesn’t always hold true. Making your users work is critical to building products people feel a sense of ownership for. This is the hallmark of user investment.

Expending effort on a task commits us to it. If you’ve reached so far, you’re more likely to read a little further. These escalations of commitment sometimes make our brain do disturbing things to us. Recollect the video game phase of our teens, some of us are still addicted to the games and committed to the levels we’ve reached and characters we’ve built. Commitment is a powerful motivator, playing an integral role in the things we do, the products we purchase, and our perception of who we are.

Beyond the wow factor

Do you remember the last time an app really bowled you over? Maybe it happened when you booked your first Uber, and the cab showed up within two minutes to your doorstep? Or when you opened Facebook to see a friend request from a childhood friend? Your application might truly come with such a wow factor and provide value to users. However, products that truly hook users offer more than the initial wow factor. We as users tend to keep searching for rewards, so your app must adapt. Often, something novel and interesting soon tend to become common and dull. To keep pace with your users wavering attention habit-forming products must improve with repeated use. Here is when the investment phase becomes critical.

Investments are not about immediate gratification, but the anticipation of rewards. Investment is the bit of work you make your users do, making the user more likely to use the product in the future. If you get your users to enter just a little information, they are more likely to return. When you type in your current title and position at sign up on LinkedIn, they can use that to rope you back in. The effort associated with providing workplace information creates a hook the system could use to get users to return.

Using "commitment" as a strategy

Habit-forming technology tends to create an internal trigger or an itch to use the product, without an explicit call to action. When cued by a certain context or emotion, the user engages with the service. The investment is the string pulling the user back. Your aim should be to get the user to return unprompted. For this, you can add value to the system in two ways.

Every time your user's input data, they are creating stored value. Stored value technologies like video games, create addicted users by getting them to invest every time they play. Working towards higher scores, advancing to the next level, or earning goods in a virtual medium like a motorcycle or the clothes on an avatar, are all examples of the power of commitment. And eventually, people end up using these stored value products as a part of their regular routines. The more users invest, the less they have to give thought to using them. On the other hand, the network effect is when a greater number of people start using your product, thereby increasing its value. Technologies like the smartphone, fax machine and companies like Instagram, Airbnb, Skype, Pinterest, etc. get better the more users join the network.

User investment starts to become really valuable when stored value meets a network effect. Facebook for instance, which worked as a stored value product, turned viral when the power of the network effect took hold. The combo of stored value and a network effect, accompanied by continual investment from users who regularly add content, creates a strong pull for a large percentage of your users. Habit-forming technologies work in the loop, starting with a trigger, action, reward, and investment creating a need in the user while giving increasing amounts of value. The more your users invest in the way of doing things through small bits of work, the more valuable your service becomes to them, and the less they question the work they have to put in.

Encouraging user investment in your products

To employ this concept successfully in your own products, you need to start by analyzing what makes your most frequent and profitable users different from the people who sign up and never show up after. Are they using a certain feature more often? Are they spending time customising their alert preferences? Are they connecting with a large number of other users? Once you’ve understood what motivates them, come up with ways to encourage all your users to take these steps, whether it be through well-timed suggestions, social proof like “85% of our customers use this feature”, freebies or something else.

But make sure you’re not making these investment steps too much work or making them obligatory. This is more likely to backfire and reduce user retention. Nobody likes being told what to do. Get the balance right, and you have user investment cracked. Now, virality, on the other hand, is something you'll have to engineer from the very start. Virality is harder to achieve than it is to build a great product.

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