Consumer Mindset – Habit, Loyalty or Dopamine!

Consumer habits can influence a product’s enduring success. Let us understand how people develop them and the ways in which popular products pull consumers to keep coming back.

Understanding Habit, Loyalty & Addiction

In the product context, it’s easy to distort the variance between the three traits that can inspire a consumer to stick to the product and keep picking it over the alternatives.

 

But let’s first deal with the big question: When is consumer behavior a “habit”, “loyalty” or “addiction”?

What a habit is

By habit we refer to an action that a person performs unconsciously (or semi-consciously) on a frequent and ongoing basis. Whenever that person can’t perform the action for whatever reason, they feel discomfort.

 

Examples of daily habits might include:

• ·         Taking the same route to work every day.
• ·         Putting keys in a particular pocket.
• ·         Looking both ways before crossing the street.

 

Product-related habits could be:

• ·         Using a particular personal care product, say the regular hair oil.
• ·         Checking news on Google News feed every morning for a quick update. 

 

We perform these actions without thinking and, if we can’t do them, we feel anxious or upset. Because these actions are so automatic, we free up our brain’s “operating memory” to use for thinking about other things.

It can be hard to draw a line between habit and addiction, especially in the context of digital products like social networks or video games. We would say that the key difference is that with addiction, all of a person’s actions are directed at obtaining the thing in question. All other areas of life suffer as a result. 

 

Drawing the line as to “Where (and whether)” between habit and addiction is beyond the scope of this article. Finding the answer involves questions of biology and ethics that we cannot address authoritatively here.

What a habit isn’t

Let’s try to demarcate between a habit that a consumer has and their loyalty to the product.

 

While habit is an unconscious or semi-conscious act that is frequent or ongoing in nature. Loyalty, by contrast, is often the result of a rational choice and does not necessarily imply high frequency. 

 

Examples:

• ·         Buying appliances of a certain brand.
• ·         Going to the same café again and again.
• ·         Flying on a particular airline.

 

Loyalty can be the result of several factors:

• ·         Performance - The consumer believes that the product performs better or gives better results than the alternatives. Uber might be cheaper, safer and faster than a regular cab, for example.
• ·         High cost of switching - If a consumer is locked into the Apple ecosystem, it becomes markedly difficult to switch to devices from other vendors.
• ·         High Recall - Top-of-Mind and other factors in brand pull.

Dopamine and its role in habit formation

Pleasant experiences shape behavior patterns as a result of dopamine, which is a hormone and neurotransmitter. In other words, dopamine is the “glue” that attaches pleasure to a habit.

We have simplified scientific explanations here in the interest of readability and accessible terminology. The full picture of dopamine’s workings, of course, is rather more complicated and best understood with a background in neurobiology.

One of dopamine’s roles is to reinforce experiences and push us to seek novelty. It has played a major role in human evolution. For more on its impact on behaviors, preferences, and even political views, check out books such as “Dopamine Nation: Finding Balance in the Age of Indulgence” by Dr. Anna Lembke.

 

From an evolutionary perspective, dopamine helps to increase our likelihood of survival. By releasing dopamine, the brain reinforces behavioral patterns that seem to benefit the body.

Keep in mind that dopamine by itself is not a “pleasure hormone”. It generates certain such  secretions in the brain that create associations with a pleasure-bringing action, motivating us to perform that action again.

 

Mechanism by which dopamine forms habits

What is the role of dopamine in forming habits?

Here’s a basic example. A friend has shown you Wordle, a popular new game. You get six attempts to guess a five-letter word. When you type your guesses, any letters that appear in the mystery word light up. 

So you haven’t heard of the game before but decide to give it a try. Down to the wire with no more guesses left, you successfully solve the puzzle and experience pleasure. Your brain now releases a hormone-rich cocktail that includes dopamine. 

This process can be split into three stages: Signal, Work, and Reward. These are the stages identified by scientists such as American researcher Robert Sapolsky, whose experiments we will detail a bit later. In our Wordle example, the stages would be: 

• ·         Invitation to play (Signal)
• ·         Opening the app and completing the level (Work)
• ·         Joy of victory (Reward)

 

At the moment of victory, you experience pleasure and your brain releases a rush of hormones, including dopamine.

Then you play the game again the next day. This time you do even better and solve the puzzle almost immediately. The signal might be different from last time: maybe you saw someone bragging about their own win on social media or maybe you just remembered your experience from the day before. That same intoxicating cocktail of hormones shoots forth yet again and you feel happy (especially if you did better than your friend!).

The brain remembers that this action is pleasurable. The job of dopamine is to make you want to do it again and again. 

This works because the dopamine rush comes not when you get the reward, but when the signal appears. Now a habit has been formed: when the trigger appears, you want to complete an action.

You then start playing every day and the game becomes a daily habit. This is reinforcement, a critical part of the process of forming a habit.

Signals come in different types: they might be an internal stimulus (say, boredom) or external one (a friend’s message or push notification). We’ll talk more about signals in an upcoming article.

More dopamine facts

There are a few other things you should know about dopamine. Large bursts of it are generated when it’s hard to predict the likelihood of a reward. In one famous experiment described by Robert Sapolsky, monkeys release twice as much dopamine when the likelihood of reward for an action drops from 100% to 50%.

Doomscrolling is a byproduct of dopamine as well. In one 2020 study, scientists confirmed that even when information does not directly lead to a reward, dopamine will still drive information-seeking behavior. This mechanism works in exactly the same way as if the brain is expecting to receive a reward. In other words, information itself can be the reward.

 

How products encourage habit formation

With Wordle we saw the basic mechanics of how a habit is formed. The game itself is not complex. Although it starts by giving the player a dopamine rush, the game is monotonous so the amount of dopamine won’t increase over time. Eventually, the player will probably switch to more engaging alternatives that use more complex mechanics to maintain the player’s interest for longer.

Here are real-life examples of how unpredictable rewards stimulate higher dopamine amounts, and therefore increase motivation to perform a habitual action.

Example: YouTube (as a content creator)

When you post on YouTube, there’s no way of guessing your reward: who, when, and how many likes your video will get. The consumer gets a notification and, with it, a dose of dopamine in anticipation of opening the app. Engagement and frequency of interaction with YouTube grow after posting a video. But if you have only ten active followers and only those ten can see it, you probably won’t be as enthusiastic: it’s too easy to predict the result.

For a dopamine feedback loop to form, the consumer is prompted to perform an action with the potential to bring a bigger reward. This gets them more motivated to open the app: 

• ·         Got 1,000 views?
• ·         What if you participate in this challenge?
• ·         How about trying this sound?

 

Example: Games

Some of the mechanics in casual mobile games, like slot machines, come straight from casinos. MMORPGs add an element of randomness to rewards when the player collects loot from a fallen enemy. Just like with social networks, the sheer unpredictability of the reward inspires the player to return to the game and perform actions that promise such rewards.

These mechanics for engaging consumers and reinforcing habits need to be recurring:

• ·         I got this awesome item today, but which one will I get tomorrow? 
• ·         Will I be able to defeat the new boss? 
• ·         What will the next reward be? 

 

Consumers may not always verbalize these questions, but the process of finding answers—combined with dopamine—will keep them coming back to the product.

Habits are powerful — and potentially harmful

Dopamine plays a key role in forming new habits. As a neurotransmitter, it helps people to remember behavior that leads to a reward, or at least whatever the brain considers to be a reward. A recurring Signal–Work–Reward sequence can make product use into a habit. This makes the consumer feel attachment and added value on an unconscious or semi-conscious level.

 

In the upcoming articles, I will take you to other wonderful aspects of consumer behaviour! So don’t forget to subscribe my blog.