How top products hack your brain for explosive growth
As a product designer, I’ve spent years translating psychological principles into tangible product features that drive growth. While I may not have formal training in behavioural science, I’m fortunate to work alongside two exceptional co-founders who truly complete our growth trifecta.
Our CEO and Chief Strategy Officer, Nazia Hassan, brings her master’s degree in Social Cognition & Research from UCL to the table, providing the theoretical backbone for our strategies. Meanwhile, our Chief Growth Officer, Giovanni Perri, is the data wizard behind our success, and his expertise in marketing stacks, analytics, data dashboards, event mapping and intelligent segment-based marketing automations allows us to make data-driven decisions and measure the impact of our design choices with precision.
This powerful combination of behavioural science, data analytics and my UX-driven design approach allows Magic Beans to offer a unique, comprehensive growth strategy for our clients. Today, I’m excited to share some insights on how we apply psychological principles to the key stages of the pirate funnel (AAARRR): Activation, Revenue and Retention.
Activation: Designing for first impressions
The power of immediate value
In my years of designing products, I’ve learned that users need to experience value quickly. It’s not just about making things look good (though that always helps); it’s about designing interactions that deliver instant gratification. Giving value early leads to stronger user engagement and retention. The quicker a user experiences a benefit, the more likely they are to stay engaged, reducing the chance they’ll give up on the app. This engagement loop fosters a faster-growing user base because existing users continue returning.
Financially, early engagement offers immense benefits. When users experience quick wins, it’s easier to retain them, which is far more cost-effective than acquiring new users to replace those who leave. A growing, loyal user base not only brings more stability but also maximises every dollar spent on advertising. Ultimately, designing for immediate value is one of the simplest yet most effective ways to drive sustainable growth.
Real-World Application: In the same way that Instagram provides value with a filter on the very first photo, Dropbox redesigned its onboarding to let users immediately upload or preview a file. By allowing instant interaction with core features, like file syncing and sharing, Dropbox created a seamless, no-friction experience. New users could start adding and accessing files across devices without delays, much like how Spotify allows users to play nearly any song instantly or TikTok serves up video content immediately. This immediate utility helped users understand Dropbox’s unique value within seconds, leading to a marked increase in activation and continued use.
The Labor Illusion: Balancing speed and perceived effort
A counterintuitive design principle I’ve come to appreciate is that sometimes, things shouldn’t happen too quickly. Known as the Labour Illusion, this concept suggests that users value outcomes more when they perceive that effort or time has been invested.
A famous example is the travel booking site Kayak, which pioneered this approach. When users hit the “Search” button, they don’t receive immediate results. Instead, they see a loading message, like “we are checking 264 websites for the best deals,” creating the impression of extensive effort on their behalf. This enhances users’ appreciation for the results, even if the delay is only a few seconds or entirely artificial.
Design Tip: For complex features like data migration or analysis tools, consider using progress indicators or staged processes to apply the Labour Illusion. Even when the actual processing time is minimal, users gain confidence that the system is “working hard” on their behalf, increasing trust and satisfaction. This perception of invested effort reinforces the value of the service, helping to build a more positive user experience.
Revenue: Designing the path to monetisation
Visual cues for conversion
One of the most powerful tools in a product designer’s arsenal is the intentional use of visual cues to encourage conversion. This approach isn’t about manipulating; it’s about thoughtfully guiding users to re-engage with items they’ve shown interest in. Visual reminders can reduce friction in the buying process by highlighting value in a non-intrusive way, turning fleeting curiosity into action.
Design Strategy: A subtle yet effective tactic on e-commerce platforms is the strategic placement of reminders for previously viewed items. By seamlessly blending these reminders into the user experience, customers feel encouraged rather than pressured to return to items they previously explored. Achieving this balance requires continuous testing, refinement, and an acute awareness of user behaviour.
Creating a seamless path to upgrades
“Free” is often the hook, but the real challenge — and opportunity — lies in crafting an upgrade path that feels both logical and compelling. Here, collaboration with our strategy team, led by Nazia, becomes invaluable as we pinpoint user pain points that premium features can resolve.
Design Approach: In designing Slack’s freemium model, the aim was to align premium features with the specific needs of free-tier users. Observing pain points led to a tailored set of paid features presented through a clear, intuitive interface. By addressing identified user gaps directly, the upgrade felt less like an upsell and more like a natural next step.
Conversion Rate Optimisation (CRO) and design synergy
Conversion Rate Optimisation (CRO) techniques can significantly boost user engagement, especially in e-commerce. By simplifying navigation, improving the clarity of product pages and providing quick / easy access to customer support, we streamline the user journey and maximise the chance for conversion. This synergy between UX design and CRO tactics elevates the user experience and ensures each site visit has the potential to become a sale.
The process doesn’t end once a design strategy is implemented. By consistently analysing user behaviour, tracking KPIs like conversion rate, average order value and cart abandonment, we uncover valuable insights that fuel continuous improvement.
Retention: Designing for long-term engagement
The investment loop
One of the most effective retention strategies I’ve implemented is designing features that encourage users to invest time, effort, or data into the product. The Investment Loop principle is straightforward: the more users invest, the more valuable the product becomes to them, fostering a deeper emotional and functional connection.
Design Implementation: For instance, platforms like LinkedIn and Duolingo focus on profile completion and learning streaks, respectively. Users are motivated to add more information or engage with the platform regularly, unlocking new possibilities and rewards. Each investment — be it adding a skill, completing a lesson or sending a connection request — enhances the user’s experience and fosters a retention loop. This approach resonates with Nir Eyal’s Hook Model, which illustrates how users can set themselves up for future rewards by engaging with the platform, thus reinforcing their commitment to return.
Combating feature blindness
A common challenge product designers face is maintaining the visibility of features for long-term users, who may develop “banner blindness” to certain elements. To keep content fresh and engaging, it’s crucial to rethink how features are presented.
Design Solution: Spotify exemplifies this by continuously refreshing and personalising content recommendations. This involves creating dynamic interfaces that showcase new music or playlists in an engaging way, making discovery feel exciting and personal. By mapping out both internal triggers (e.g., notifications about new releases) and external triggers (like reminders based on user habits), Spotify effectively maintains user engagement over time.
Additionally, designing for long-term engagement can involve incorporating investment patterns where users perform simple actions — like sharing a playlist or sending a message — that set them up for future rewards, thus creating a habit loop. As users invest time and effort, they not only enhance their experience but also contribute to the product’s growth, increasing its value with each interaction.
User-centric metrics for retention
To strengthen long-term engagement, it’s crucial to implement user-centric metrics that align with your retention goals and provide insights into user behaviour.
Engagement Rate: This metric tracks how frequently users return to the platform and engage with new features. A high engagement rate indicates that users find value in the product and are motivated to return.
Time on Platform: Analysing the time users spend exploring new features or content helps us gauge the effectiveness of our retention strategies. Longer time spent on the platform often correlates with increased satisfaction and deeper engagement.
Feature Adoption Rate: This measures how many users actively utilise new features after their launch. By understanding which features resonate most, you can hyperfocus on iterating and streamlining your offerings.
User Feedback and Surveys: Collecting qualitative data through feedback and surveys can provide insights into user satisfaction and areas for improvement, allowing you to adapt the design and retention strategies accordingly.
By monitoring these metrics, you can refine the design strategies, create more satisfying user experiences and foster loyalty that encourages users to advocate for your product, thereby creating a segway from Retention to Referral in your marketing funnel.
Implementing Feedback Loops
Incorporating user feedback into the design process is crucial for retaining users. Just as conversion rate optimisation relies on A/B testing to enhance sales, leveraging user insights through surveys and usability tests can lead to better design choices that meet evolving user needs.
Example: Following the rollout of new features for one of our FinTech clients, we actively sought feedback from users about their experiences. This data informed subsequent iterations of the product suite, helping us adjust designs that resonated more deeply with their audience. When users feel their input is valued, they are more likely to stay engaged and invested in the product.
Building Habit-Forming Products
A key to fostering long-term user engagement is creating habit-forming products. This involves letting users invest their time, money or effort (or a combination of these) into the product, setting them up for anticipated future rewards. For example, when a user sends a message to a friend, they’re likely anticipating a reply, which serves as both a reward and a trigger to return to the platform.
Investment and Anticipation: Encourage users to perform simple actions that lead to future rewards, increasing the likelihood of their return. Investments, such as creating a detailed profile or curating playlists, add value to the product over time.
Internal and External Triggers: Map out both internal triggers (within the product) and external triggers (notifications, emails, sms, etc) that encourage users to return. For instance, reminders about incomplete profiles or new content that aligns with their interests can effectively draw users back into the platform.
Designing for long-term engagement is about understanding user investment and the dynamics of feature visibility. By creating an environment where users feel encouraged to invest in their profiles or explore new features and by constantly refreshing the user experience, you can effectively combat feature blindness and build a loyal user base. Combining insights from behavioural science and user feedback will further strengthen your retention strategies, leading to a more robust and engaged community.
In a follow-up piece, I will go into more details about gamification strategies so keep an eye out for this.
Bringing It All Together: The Magic Beans Approach
At Magic Beans, we believe that great product design, backed by solid behavioural science and robust data analytics, is the key to unlocking growth. Here’s how we apply these principles across our core areas::
Activation: We design onboarding experiences that provide immediate value, carefully balancing simplicity with the perception of robustness. By encouraging users to invest time and effort during onboarding, we set them up for future rewards, creating a habit loop that brings them back. Giovanni’s event mapping and data tracking allow us to pinpoint where users derive the most value, enabling us to continually refine the activation process.
Revenue: Our designs strategically highlight the value of premium features, making the upgrade path clear and compelling. We utilise persuasive design patterns to guide users toward the benefits of upgrading, transforming their initial investments into a desire for enhanced features. Nazia’s insights into user psychology, combined with Giovanni’s segment-based marketing automations, ensure that we present the right offers to the right users at the right time, maximising conversion potential.
Retention: We create “sticky” features that become more valuable over time, designing interfaces that encourage continued discovery and engagement. By implementing dynamic content recommendations and personalised experiences, we combat feature blindness and keep users actively exploring our products. Our data dashboards, crafted by Giovanni, provide real-time insights into user behaviour, allowing us to iterate quickly and maintain high levels of engagement over the long term.
Remember, great product design isn’t just about aesthetics; it’s about understanding human psychology, leveraging data insights and crafting experiences that resonate on a deeper level. By applying these insights and utilising our full spectrum of expertise, we’ve helped numerous clients transform their products from mere tools into indispensable parts of their users’ lives.
Ready to see how we can apply these principles to supercharge your product’s growth? Let’s chat about how Magic Beans can help you design experiences that not only look great but drive real, measurable growth. Book a discovery call with the three of us and let’s get down to business.
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