Economic Value of Habits

Forming user habits is not just about engagement; it has significant economic implications. Companies that successfully create habits enjoy increased customer lifetime value (CLTV), pricing flexibility, and accelerated growth. Eyal notes that 'habit-forming products change user behavior and create unprompted user engagement,' which translates to higher revenues and lower marketing costs. For instance, Evernote's freemium model shows that as users become more habituated to the service, their willingness to pay for premium features increases over time, significantly boosting the company's revenue.