Samuel Salzer

Designing for Habit - The Power of Reward Loops in Engaging User Experiences

Learn how to leverage reward loops to create habit-forming products. Learn key strategies, best practices, and real-world examples to enhance user engagement and satisfaction.

Talk transcript of Samuel Salzer – recorded on 21 Feb 2024 Product Psychology

Product psychology User & customer research Customer onboarding Customer success Customer problems Frameworks & methods Experimentation & testing Design Design thinking Interaction design Product strategy Product research Optimization and iteration Behavioral science Engagement

Reward loops are fundamental to creating engaging user experiences, and understanding them can help you build products that users return to again and again. Let’s explore the principles behind reward loops, their practical applications, and how you can use them to enhance your product designs.

Understanding Reward Loops

Reward loops are the cyclical processes that drive repeated user behavior. At their core, they consist of a cue, an action, and a reward. For example, in the context of an app like Uber, the cue might be the need to travel, the action is booking a ride, and the reward is reaching the destination efficiently. When users repeatedly go through this loop and find it rewarding, they are more likely to use the app again in the future.

Key components of reward loops are:

  1. Cue: The trigger that initiates the behavior. It can be an internal need or an external prompt.
  2. Action: The behavior performed in response to the cue.
  3. Reward: The positive outcome or benefit received after performing the action.

The goal of designing effective reward loops is to ensure that the loop encourages repeated behavior. A well-designed reward loop makes it more likely that users will come back to the app, creating a habit.

Let’s take a look at some examples of apps that have successfully implemented reward loops.

  • Duolingo. Duolingo is known for its engaging language learning experience. The app uses cues like daily reminders and streaks to prompt users to complete lessons. The action is the completion of language exercises, and the reward is a sense of accomplishment, progression in language skills, and maintaining a streak. Duolingo also uses loss aversion by reminding users of their progress and encouraging them to keep their streaks alive.
  • Headspace. Headspace helps users build a meditation habit. The app provides cues such as notifications and personalized messages. The action is the meditation session, and the reward is the immediate sense of relaxation and long-term mental health benefits. Headspace also uses implementation intentions, guiding users to specify when and where they will meditate, which increases the likelihood of habit formation.

Best Practices when designing Reward Loops

When designing reward loops, there are several best practices to keep in mind:

  1. Onboarding. Onboarding is crucial as it sets the stage for the user’s experience with the app. Effective onboarding should instruct users clearly and concisely, helping them understand how to use the app and what they can gain from it. Many apps excel in onboarding by providing step-by-step instructions and adapting to the user’s responses.
  2. Commitment. Getting users to commit early on increases the chances of long-term engagement. Apps can use soft commitments, like Headspace’s smiley drawing, or more robust methods like implementation intentions. These commitments help users plan when and where they will use the app, making it easier to integrate into their daily routines.
  3. Adaptiveness. Adapting the user experience based on the user’s level of ability and motivation is key to maintaining engagement. Duolingo, for example, adjusts the difficulty of its exercises based on the user’s performance, keeping them challenged but not overwhelmed. This adaptiveness ensures that users feel a sense of progression and competence.
  4. Novelty and Variety. Introducing novelty and variety keeps the user experience fresh and engaging. Apps should regularly update their content and features to prevent users from getting bored. Duolingo excels in this by offering a variety of exercises, stories, and visual elements that keep the learning process enjoyable.

Advanced Strategies for Maintaining User Engagement

Now, let’s dive deeper into advanced strategies for maintaining user engagement, the importance of designing for failure, and more examples of effective reward loops.

To create truly engaging experiences, it’s essential to continuously adapt and evolve the user experience based on user behavior and feedback. Here are some advanced strategies to consider:

  1. Personalization. Personalization tailors the user experience to individual preferences and behaviors. By collecting data on user interactions, apps can provide personalized content, recommendations, and notifications. This makes the user feel valued and understood, increasing the likelihood of continued engagement. For example, Spotify uses personalized playlists and recommendations based on listening history.
  2. Dynamic Difficulty Adjustment. Dynamic difficulty adjustment ensures that users are always appropriately challenged. This technique adjusts the difficulty level based on the user’s performance, keeping them in a state of flow. For instance, fitness apps like Zwift adapt workout intensity based on the user’s fitness level and performance, ensuring that exercises are neither too easy nor too hard.

Designing for Failure

No one enjoys feeling like a failure, yet failure is an inevitable part of learning and habit formation. Designing for failure means creating experiences that support users through setbacks and help them recover quickly.

  1. Encouraging Resilience. Encourage resilience by framing failure as a natural part of the process. Apps can provide motivational messages, tips for improvement, and opportunities to try again. For example, Duolingo offers encouraging messages and quick tips when users make mistakes, helping them learn and move forward.
  2. Soft Failure Points. Introduce soft failure points where users can fail without significant consequences. This reduces the fear of failure and encourages experimentation. For instance, in games like Candy Crush, users can retry levels multiple times without severe penalties, making the learning process less daunting.

Case Study: Lifesum

Let’s examine how Lifesum, a nutrition app, applied these principles to improve user engagement and retention.

Lifesum faced the challenge of helping users develop healthier eating habits, a complex behavior influenced by social, emotional, and physiological factors. They recognized that users often struggled to stick to dietary plans and frequently felt discouraged by setbacks.

To address this, Lifesum introduced more flexible dietary plans that allowed for occasional indulgences. By acknowledging that users would not always adhere strictly to their plans, Lifesum made it clear that small deviations were part of the journey. This approach reduced feelings of failure and guilt, encouraging users to stay committed over the long term.

Lifesum also implemented recovery mechanisms, such as motivational messages and reminders to get back on track after a lapse. These features helped users recover from setbacks quickly and maintain their motivation to continue pursuing their health goals.

Practical Tips for Designing Reward Loops

Here are some practical tips to help you design effective reward loops in your products:

  1. Conduct User Research. Conduct thorough user research to understand your users’ needs, motivations, and pain points. This insight is crucial for designing reward loops that resonate with your audience.
  2. Do Iterative Design. Adopt an iterative design process that allows for continuous testing and refinement. Use A/B testing and user feedback to optimize your reward loops and improve user engagement.
  3. Make Data-Driven Decisions. Leverage data analytics to monitor user behavior and identify areas for improvement. Analyze metrics such as retention rates, session duration, and user feedback to make informed design decisions.
  4. Be Transparent. Be transparent with users about how the reward system works. Clear communication helps build trust and ensures users understand the value of their actions within the app.
  5. Ethical Considerations. Always consider the ethical implications of your design choices. Ensure that your reward loops encourage positive behaviors and do not exploit users’ vulnerabilities.

Find mentors who can help you with Product Psychology

Browse mentors

Community events
Product Loop

Product Loop provides an opportunity for Product professionals and their peers to exchange ideas and experiences about Product Design, Development and Management, Business Modelling, Metrics, User Experience and all the other things that get us excited.

Join our community

Made with in Copenhagen, Denmark

Want to learn more about about good product development, then browse our product playbooks.