Have you ever heard about the halo effect? In the year 1920, and after an empirical research, the psychologist Edward Thorndicke described for the first time what he called ‘halo effect’. This effect was explained as a cognitive bias in which the judgments we have of others character traits may be influenced by an overall – and usually first – impression. This may sound difficult to understand, but it has happened to you many times. This is what happens when you buy a product just because your favourite football player is advertising it. You think «c’mon he’s a great player, he’s successful… That product has to worth it, I’m sure».
And that’s it, you have been suddenly charmed by the halo effect.
But this is not a psychology post, what does it have to do with the world of business?
Since it was described, advertisers and firms have taken profit of it. The halo effect has the power to influence customer thoughts about the different products being sold. Taking advantage of a good first impression is not only worthy for a product itself, but for the whole company. Once we link a certain trait to a product, it spreads to any other product of the firm.
A clear example is Apple and its iPod. Even though the first product sold by Apple was a computer, the iPod gave the firm the strength to build a business empire. The traits given to the product doesn’t have to be shared worldwide but what made the iPod special was that everyone wanted one and everyone had their own reasons to buy it. Since then all the iPod’s attributes – easy to use, innovative, a must-have, e.g.- have been spread to the iPhone, iMac and iPad making them essential gadgets for any Apple-addict.
But this ‘magic’ doesn’t last forever, Apple lost almost a 6% in the stock market the days following the iPhone5s and 5c keynote. Customers expected more. It’s essential to keep them excited about the future new products but also important to fill their expectations not to let them down. There is nothing worse than a disappointed customer.
Be aware. Reverse halo effect also exists. As we said previously, the first impression will define the path of our product life cycle. If we link bad attributes to a product from the first moment, it will be very difficult to direct customers mind to a positive thought.
Another way to take good profit of the halo effect is hiring celebrities whose traits are similar to our products’ attributes to advertise the firm or an specific line of products. For example, Pierce Brosnan is considered serious, someone we could rely on, and that’s why he is appropriate to advertise an insurance company. Many actress as well are hired by fashion companies because they are specially known to be trendy, cool and somehow it-girls; they are usually the ones who introduce new must-have products that become suddenly desirable worldwide.
The point of knowing a little about this effect is simple: Learning that it is essential to track in detail and continuously the consumers reactions to our products so we can mend straightaway any mistake that could harm our image. Not noticing a small mistake in time is the biggest mistake, it would take loads of effort, time and money to go back to the positive previous corporate image.
Now we are aware of the halo effect and it’s pros and cons, we must take special attention to any minimum detail of our product launch. Every single step we take at that time can harm or improve our firm image in the eyes of the world.