How Do Top SaaS Brands Build Habit-Forming Products?

In partnership with

In the competitive world of SaaS, building products that users love and rely on is essential for long-term success. One effective strategy is to design products that form habits. By understanding the psychology behind habit formation, you can create products that users naturally integrate into their daily routines. In this newsletter, we'll explore how to apply behavioural science principles to build habit-forming SaaS products. This is StartupStoic, a newsletter that assists you in learning better and strategizing your startup ideas. If you find it helpful, feel free to share it with others.

Building a habit-forming SaaS product isn’t just about creating a useful tool; it’s about designing an experience that seamlessly integrates into a user’s daily routine. Behavioural science offers a framework for understanding what drives user behaviour and how to encourage consistent engagement. By analyzing the strategies of successful brands like Duolingo, Slack, and Notion, we can uncover actionable insights into building SaaS products that users not only adopt but also rely on habitually.

The Hooked Model: A Framework for Habit Formation

Nir Eyal's Hooked Model provides a four-step framework that many successful SaaS companies follow:

1. Trigger: External cues (e.g., notifications) or internal motivations (e.g., anxiety, curiosity).

2. Action: The behaviour users take in response to the trigger.

3. Variable Reward: A mix of predictable and unpredictable rewards that drive users back.

4. Investment: Actions by the user that increase their attachment to the product (e.g., creating data, personalizing settings).

Case Studies in Behavioural Design

Duolingo: Gamifying Language Learning

Duolingo has mastered habit formation by turning language learning into an addictive game:

• Triggers: Personalized daily reminders and streak notifications encourage users to log in regularly.

• Action: Bite-sized lessons are easy to start, lowering the barrier to entry.

• Variable Rewards: Duolingo leverages gamification, including streaks, achievements, and unpredictable rewards (like treasure chests) to keep users engaged.

• Investment: Users invest effort in maintaining their streaks and tracking their progress over time, making them less likely to churn.

Takeaway: Combine gamification with a sense of progress to make users feel invested.

Slack: Redefining Workplace Communication

Slack didn’t just replace email; it created a habit-forming ecosystem that thrives on collaboration:

• Triggers: Notifications for new messages act as external triggers, while internal triggers—like the need to resolve workplace issues—drive users to open Slack.

• Action: Quick message sending and the immediate gratification of replies make engagement seamless.

• Variable Rewards: Users receive a mix of expected (messages from coworkers) and unexpected rewards (fun GIFs or reactions).

• Investment: The more teams use Slack, the more they build an archive of important conversations and files, making Slack indispensable.

Takeaway: Design features that integrate deeply into your users’ workflows.

Notion: Customizable Productivity

Notion's rise to popularity hinges on empowering users to build personalized workflows:

• Triggers: Onboarding emails, tutorials, and user-generated templates act as external triggers, while the desire to stay organized is a strong internal driver.

• Action: Creating or modifying templates and databases is intuitive, enabling users to see immediate results.

• Variable Rewards: Users experience satisfaction from building something unique and the unpredictability of discovering new templates or features.

• Investment: Every piece of content a user creates in Notion—notes, tasks, wikis—increases their reliance on the tool.

Takeaway: Allow for personalization and creativity to deepen user engagement.

Spotify: Enhancing Emotional Experiences

Spotify leverages behavioural science to become a part of users' daily routines:

• Triggers: Personalized playlists like Discover Weekly and Wrapped are external triggers. Emotional moments, like the need to relax or energize, act as internal ones.

• Action: Pressing play on a playlist or song is effortless.

• Variable Rewards: Spotify keeps users intrigued with curated playlists, surprise recommendations, and the joy of rediscovering forgotten favourites.

• Investment: Over time, users build playlists, follow artists, and like songs, which creates an emotional attachment.

Takeaway: Build emotional resonance by aligning your product with user aspirations and feelings.

Designing Habit-Forming Products: A Roadmap

1. Understand Your Users: Conduct user research to identify emotional triggers and pain points.

2. Design Simple Actions: Ensure the initial action (e.g., signing up, or completing a task) is effortless.

3. Incorporate Variable Rewards: Use a mix of predictable and surprising incentives to sustain engagement.

4. Encourage Investment: Create opportunities for users to personalize and contribute to the product, increasing their emotional attachment.

5. Leverage Data: Use analytics to track user behaviour and refine your triggers and rewards.

Habit-forming SaaS products aren’t built by chance; they’re the result of intentional design grounded in behavioural science. By understanding what motivates users, simplifying actions, and rewarding engagement, brands like Duolingo, Slack, Notion, and Spotify have created products that seamlessly integrate into daily life.

Recommended Reads:

• Are You Losing Sales? It Might Be Your Call-to-Action!

• How Well Do You Know Your Competitors?

• Brave - Disrupting Browser Industry with Promise of Privacy