The Halo Effect is a widely known psychological concept which has garnered much research interest over the decades. Simply put, it refers to the phenomenon wherein a person’s global attribution of something effects their individual attribution of that particular thing. Used in the context of evaluating another person, an example of the halo effect would be when you rate the individual attributes of your partner to be desirable, based solely on the fact that you love that person and regardless of whether their individual qualities are pleasant or not.
Many studies have shown that despite having enough information to make a judgement about the distinctive characteristics of a person, other are quick to rate these characteristics on the overall evaluation of whether the person is ‘good’ or ‘bad’. One such study was conducted by Nisbett and Wilson (1977), where university students had to rate either a warm professor or a cold professor on his individual attributes (namely: physical appearance, accent, and mannerisms). It is interesting to note that for both the groups, the professor remained the same: what differed was his response to various questions in an interview. Yet, students who saw the professor in a warm guise rated his individual qualities to be considerably better than those who saw him in his cold guise.
The halo effect has many variations—there is the ‘Horn Effect’, so to speak, which refers to attributing negative qualities to something one does not like overall. The halo effect can also work in terms of just individual attributes: for example, if we think a particular song has good lyrics, we are also more likely to appreciate its music than if we didn’t like the lyrics as much.
Considering the nature of this phenomenon, it is not surprising that it has an important role to play in marketing, and thus in business psychology overall. The halo effect is basically what results in client loyalty for specific brands. When brands have a good reputation and high visibility, consumers are more likely to consume their products regardless of the individual characteristic of a specific product. This is why big firms like Apple are able to sell their new gadgets at high prices—people will buy these based on the automatic assumption that Apple will release only good quality products.
Based on this psychological phenomena, one tactic for firms to market their product would be to prioritize quality over quantity. Instead of trying to be good at everything, brands can target a specific product on which to use their resources and make it appeal to people. Because people are likely to judge their brand based on just that one product, the brand’s overall reputation and brand strength will increase, which will make it easier for them to sell whatever they come up with in the future. The halo effect then leads to a chain that keeps increasing brand strength. Moreover, the halo effect in business psychology also emphasizes upon the hiring of employees, as they really are the face of the company. A good interaction with an employee can leave a positive impact on a consumer’s perception of that firm, whereas a not-so-pleasant encounter is likely to have the opposite effect.
Recently, marketers have defined psychology and the understanding of human behavior to be the most important tool in marketing. Phenomena like the halo effect thus become very important in business psychology, highlighting the need to understand the target audience and strategize accordingly. In order to effectively market products in these highly competitive words, it has become necessary to learn and make use of as much psychology as possible!
Nisbett, R. E., & Wilson, T. D. (1977). The halo effect: Evidence for unconscious alteration of judgments. Journal of Personality and Social Psychology, 35(4), 250-256. https://doi:10.1037/0022-3522.214.171.124