What Is the Halo Effect?
The halo effect happens when a consumer favors one brand or company over the others because of one good experience from their products or offers. It leads to brand loyalty and strength as well as brand equity.
Why is the term halo effect named as such?
The term halo effect came from the halos that angels have. There is association because we always perceive angels as good and kind. It is an analogy that we can use for a brand and its products. There is also a term called the horn effect, where consumers stereotype all of the brand’s products as bad because of one bad experience. Let’s say a customer dined in a restaurant and ordered a bad-tasting pizza, and then the customer may assume that all their food offers are not delectable. The term came from the devils’ horn since the perception of the devil is evil and dark.
More on the halo effect
Halo effect doesn’t just happen overnight. A company or brand will have to work hard to create quality products and services through innovations and improvements on their weaknesses. After all, consumers may not have good impressions of their products if they don’t produce quality products.
Through quality products and services, they can attract a better reputation, visibility, and brand equity. When consumers get to try even just one quality product from a firm, there is a strong possibility for them to form brand favoritism. Also, these consumers will tend to try and prioritize all or some of the brand’s products since they will assume that everything that the brand creates is indeed good if one is outstanding.
It is good news for a brand because more brand loyalty, brand strength, and reputation mean more revenues and profits. If all the products have high performance and quality, then it just takes one product trial from a consumer that will lead to nice assumptions on a brand as a whole. Brands that experience the halo effect tend to become leaders in the market and increase their market share. The Halo effect lessens the competition in the market as well.
A halo effect example
We can account halo effect in business and other areas such as people, activities, places, and many more.
For example, in a classroom setup, a teacher asks if Shiela can become the class president, and you vote yes because she is intelligent. Since she is smart and good at her studies, you assume she might also be a great class president and leader.
In another setup, let’s say Jeff owns a beauty and cosmetics brand with the name Jeff Beauty. A consumer in a rush walks in the store and buys any lipstick because she forgot her makeup kit. When she reaches the office, she headed straight to the toilet, put on her makeup, and applied the lipstick from Jeff beauty. To her surprise, the lipstick was intensely pigmented and gorgeous. She also found out on the label that these lipsticks are also cruelty-free and organic. Now, this customer will assume that all of the products from Jeff Beauty are of excellent quality, and she plans to buy the other products to try in the coming days.