The halo effect is a cognitive bias in which the perception of a single trait influences how we perceive multiple characteristics.
Edward Thorndike first coined the term in a 1920 paper. Researchers asked commanding officers in the military to evaluate a variety of qualities in their subordinate soldiers. These characteristics included such things as leadership, physical appearance, intelligence, loyalty, and dependability. Thorndike observed that high ratings of a particular quality consistently correlated with high ratings of other characteristics. For example, tall and attractive men were perceived as smarter and better soldiers. Meanwhile, negative impressions of a specific quality also led to lower overall ratings.
Marketing often makes use of the halo effect, linking beautiful people, thoughtful design and celebrities with credibility for consumer products. The celebrity endorsement is a well-trod technique that leads consumers to conclude that a product must be good if a famous person uses it.
The halo effect can go both ways. The same reason that people flock to a product could be the same reason the public changes its opinion.
The halo effect is the essence of a brand, which can either draw in or repel consumers. Companies can leverage this bias by drawing focus to their flagship products. They can also amplify the effect through brand positioning, product launches, and price premiums.
Additionally, companies should approach new product launches as an opportunity to tap into existing brand equity. Over time, positive perception of the combined products provides the company with reach in different markets and mind-share among customers associated with a particular brand.
When combining two products, their individual halo effects amplify the perception of the portfolio as a whole, creating “accretive value.” This in turn makes a company successful when selling new and existing products. A positive brand reputation thrives on trust that new products will deliver in the same way sister products have done before.
What is the Halo Effect?
