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Investment Loops
Definition
Investment Loops refers to the phenomenon where the more a user invests in a service or product (time, effort, resources, etc.), the more attached they become to that service or product, leading to repeat visits and continued use.
Explanation
Investment Loops are described as follows:
User Investment: When a user invests time, effort, resources, etc. into a service or product, a personal connection and attachment to that service or product is formed. This makes the service more meaningful and essential to the user.
Ongoing Use: Investment Loops encourage users to continue using a service or product. For example, in a game, if the user is rewarded periodically for the effort and time invested, the user will tend to continue playing the game.
Point System: Many services introduce a point system to manage investments and rewards. This allows users to visually check their investments and rewards, and encourages them to invest more accordingly.
Sustainability: Investment Loops increase the sustainability of the service. As users continue to use the service, they increase their investment, which allows the service to continue to evolve and grow.
Investment Loops promote positive interactions between users and services, and are one of the key factors that can improve user retention and performance of a service.
Importance
Investment Loops have the effect of increasing users’ attachment and dependency on the service as they invest in it. This encourages users to continue using it, which in turn increases the sustainability and profitability of the service. Investment Loops are mainly used in games, social media, and online communities.