Written by
Benjamin Daniels
8 mins read
How the Hook Model can give you the benefits of better user retention
User retention will continue to be a make-or-break metric in 2024. Going through the stages of the customer journey, you can see that retention sits right at the heart of app growth. To begin, you have to acquire and activate your new customers – all in the hopes of turning them into loyal and profitable users. We’ve seen many apps do this with successful gamification examples and the use of Nir Eyal’s Hook Model!
In this article, let’s see what challenges belong to the retention stage of the customer journey, and how the Hook Model and gamification together can boost your numbers.
- Why user retention is such a challenge
- 3 ways to tackle low user retention rates
- How the Hook Model forms habits (and creates a sticky UX)
- 3 gamification examples that enhance the hook model
- How you can get started on boosting user retention
Why user retention is such a challenge
To be successful in the app market, user retention is key. There are two main reasons:
- Retention affects app store rankings (which will, in turn, improve organic user acquisition – organic installs are 25% more likely to be retained!)
- It’s vital to achieving financial business goals (and your long-term survival)
However, improving user retention is easier said than done. Scientific research shows that it takes on average 66 days to form a habit. But why is that important?
Well, some of the most popular apps make their usage a habit and this is a highly effective way to boost retention. In essence, a habitual user won’t think about coming to your app, they’ll just do it automatically. There’s a reason that a market exists for mobile ‘detox’ apps which help users break an unwanted habit – habits are powerful!
Of course, the big challenge is to form a habit that people actually want to keep. To do this, you need to provide value. Given this, it is no coincidence that the top apps on the market have the best user retention. They are value experts! The king of health & fitness, Fitbit, uses gamification examples like their leaderboard to push daily steps up by 15%, and fintech Moven makes users 50% more likely to save money. That’s real value!
So what can you do to tackle low user retention rates?
3 ways to tackle low user retention rates
To be sure, low retention rates are common across all verticals. mHealth apps can expect only 4% of users to stick around after just 30 days, while digital banking does slightly better at 10%. Still, these low numbers should not be taken as a given!
Here are 3 ways that you can boost user retention metrics:
1. A clear onboarding flow with a demonstrable value proposition
Your retention strategy starts right at the beginning! A clear onboarding process, ideally with the least amount of clicks possible, will avoid frustrating and churning users, thus increasing your Day 1 retention.
On the other hand, a straightforward value proposition can help frame the user’s interactions with your app. Take fitness app MuscleBooster, whose onboarding asks users which part of the body they want to focus on. Users will remember this and it will give them an internal goal to aim towards!
2. Personalization features that give the user ownership over the app
Personalized notifications can be crucial to improving retention and habit formation. It’s a way to give feedback to the user. The right notification, in the right place and at the right time can empower and reinforce good user behavior. Or, in contrast, it can be used to give users feedback and help them adjust quickly.
Neobank Moven is a great gamification example in fintech using this to the advantage of themselves, AND their users. Moven uses personalized notifications to install certain healthy financial habits like saving or financial education.
For instance, users are alerted when they’re spending too much or prompted to save more at times when their spending behavior allows them to. CEO Brett King states: “The prompted savings behavior is massive for us.” 40% of users are using it regularly as an avenue for savings.” Those that do are actually 50% more likely to save more money!
3. Introduce unpredictability in the user experience
To make your app truly sticky, the experience needs to be unpredictable. People crave new experiences! Gamification examples like challenges and leaderboards can do this for you. Just the idea that you could win a challenge, or hit the top of a leaderboard, creates an unpredictable event that compels users to stay and find out the answer.
What is this all to say? Ultimately, your app needs to be sticky, and gamification can be a way of achieving that!
How the Hook Model forms habits (and creates a sticky UX)
Instead of acquiring new customers, hook in your existing customers and extend their customer lifetime value. It’s more efficient in every way! By using the science-based Hook Model developed by Nir Eyal, you can facilitate the habit formation that will produce loyal users.
The Hook Model outlines the 4 necessary elements for a sticky app:
#1 Trigger
An event that provokes action, whether it be internal or external. An external trigger could be a push notification reminder to meditate, and the internal trigger is the want to meditate to achieve your wellness goal.
#2 Action
A behavior is done in anticipation of a reward. For example, Fitbit users might go for a run, users of the neobank N26 could stash some savings aside, or food shoppers could buy something healthy to earn loyalty points.
#3 Reward
The user gets what they wanted! Points, a place on the leaderboard, or even a prize.
#4 Investment
The user puts something back into the product which improves it for their next visit! Think of things like linking their address book, or uploading their first social post. This is where you can expect your monetization efforts to be successful.
3 gamification examples that enhance the Hook Model
The Hook Model goes hand in hand with gamification. Under the hood, gamification is simply a method of leveraging user data to encourage the desired behavior. It does this by making the experience fun and gratifying! This could mean leaderboards to keep things unpredictable and progress trackers with which users can see their personal growth.
In short, gamification boosts your retention strategy and is often more cost-effective. Users love to be rewarded, and gamification can give you plenty of user reward opportunities that are better for your bottom line than simple cash prizes and discounts. For example, a mere sprinkle of digital confetti to celebrate a user’s achievement is both cheaper AND more motivating than offering cash prizes!
1. Calm uses personalized gamification examples to reduce churn
How did wellness app Calm achieve a 3x boost to user retention? Simple – by letting users set their own push notifications reminding them to meditate.
With Calm’s Daily Reminder feature, users receive a motivating message at a time of their choosing. This creates a personalized trigger, which users are more likely to listen to! What’s more, following the user’s meditation session, Calm lets users see the growth of their daily streak of meditation sessions. This is a fantastic reward that prompts investment – as can be seen by the app’s 4 million subscribers!
2. Banx incentivizes users to be sustainable with points systems and rewards
Banx is a collaboration between the Belgian bank Belfius and leading digital company Proximus, and aims to give users a ‘personal CO2 dashboard in their pocket’.
When users buy something, they receive a notification on their CO2 savings! This works as a great external trigger, while the want to be sustainable acts as an internal trigger. As a reward, Banx users have access to progress trackers on their emissions, as well as the chance to earn points that can be exchanged for discounts at Banx’s ecological partners.
As a result, the app has been found to reduce users’ carbon footprint by as much as 50%!
3. HumanForest incentivizes habit formation with a sustainable in-app currency
E-bike shared mobility app HumanForest wants to make travel in London greener. But it can be hard to make cycling a habit, and that’s why the app uses gamification to encourage their loyal user community of 35,000! Based on users who want to travel sustainably, HumanForest makes sure to reward that initial internal trigger.
By riding, users earn TreeCoins. These show how many trees’ worth of CO2 your cycling has saved! This gives users the intrinsic motivation needed to keep going – indeed, knowing that your actions have power is an extremely powerful motivator. This reward creates an investment back into the platform, as users ride more and more because they know they will be rewarded for it!
How you can get started on boosting user retention
Your journey in improving user retention begins with developing a habit formation strategy. To be sure, gamification is a powerful tool at your disposal to achieve that goal. Of course, developing a platform-wide strategy is an intimidating and time-consuming task. That’s why StriveCloud runs expert-led interactive workshops to lend a hand.
Every app requires a different gamification strategy. Knowing this, StriveCloud specializes in gamification for apps that focus on your chosen key issues, which could be facilitating habit formation and boosting engagement and user retention. We have worked with clients across banking, mHealth, mobility, and many more industries!
In StriveCloud’s custom gamification workshops, we focus on developing your own gamification strategy, tailored to your app, audience, and business goals. Together with our gamification experts, we focus on crafting a user experience that is engaging for your users, while also driving the behaviors that make you grow.
First, we take your user data to pinpoint your biggest levers for growth, for example, retention. Then, we create a concrete plan with tactics and the right gamification examples that you can leverage to achieve your goals.
Finally, after implementing the action plan, you will be able to see how your app has transformed! Our work has led to clients benefiting from huge rewards:
- 58% rise in Daily Active Users
- 23% drop in Churn Rates
- 500% increase in 90-day user retention!
Wrap up
User retention is key. Some of the greatest apps in the world use behavioral design to create engaging & habit-forming products. Here’s why:
- Retention affects app store rankings (which, in turn, improves organic user acquisition – organic installs are 25% more likely to be retained!)
- It’s vital to achieving financial business goals (& your long-term survival)
However, installing habits is not easy. Scientific research shows that it takes on average 66 days to form a habit. So what can you do to improve user retention?
3 ways to tackle low user retention
- A clear & simple onboarding process – Fewer clicks equals less frustration and thus lower Day 1 churn!
- Contextual notifications – The right notification, in the right place and at the right time can empower and reinforce good user behavior, or quickly adjust bad behavior!
- Introduce unpredictability – The anticipation for a reward is often greater than the reward itself. Keep surprising your user with fun and exciting experiences!
Form habits with the Hook model
One way to do this is by using Nir Eyal’s Hook model. It’s a continuous loop of engagement. The more a user goes through the loop, the more engaged they will become. It consists of 4 stages:
- Trigger -The user is provoked to take action by a motivational trigger. It can be external, like a potential reward, or internal, like a lifelong passion.
- Action – They carry out a small action in anticipation of a reward.
- Reward – Their behavior is positively reinforced through a variable reward!
- Investment – The user invests something back into the product, that makes them more likely to return.
Power up the Hook model with gamification
When powered by gamification, the Hook model becomes even more powerful. Not only can rewards be more cost-effective, but also more meaningful. Here are some examples:
- Meditation app Calm tripled retention and got a ‘daily meditation streak’ going for its users with their ‘Daily Reminder’ feature.
- Banx, a slow banking app helped users reduce their carbon footprint by up to 50% through their personal CO2 dashboard!
- HumanForest incentivizes sustainable behaviors with ‘TreeCoins’. It’s their own in-app currency that visualizes the amount of CO2 you reduced by using their electric bike-sharing service!