Halo Effect

What is the halo effect?

The halo effect is a cognitive bias in which a person’s overall positive impression of a brand, product, or individual causes them to assume positive qualities in other, unrelated areas. In marketing, a strong, well-liked product can create favorable expectations for a company’s other offerings. The reverse—when one negative impression taints perceptions of everything associated with a brand—is called the horn effect.

How the halo effect works

• Strong performance, high visibility, or an emotional connection with one product or spokesperson leads consumers to generalize that positivity across a brand’s portfolio.
• This generalization can create brand loyalty, higher willingness to pay, and easier adoption of new products.
• Companies foster halo effects by concentrating marketing on flagship products, delivering consistently strong user experiences, and leveraging endorsements or celebrity ambassadors.

History

The term dates back to 1920, when psychologist Edward L. Thorndike described how a single impression influenced evaluations of unrelated traits. He observed that commanding officers often rated attractive or favorable-looking soldiers as superior in multiple attributes, despite limited information.

Special considerations for brands

• Achieving a durable halo effect is difficult and rare; many brands never reach this level of cross-product goodwill.
• Brands often build a halo by focusing intensely on a single, standout product (a “cult product”) and then extending that reputation to new categories.
• Celebrity endorsements and curated social media presence can accelerate a halo effect by transferring a trusted public image to the brand.
• Maintaining the halo requires care: a major misstep with a high-profile product or campaign can quickly produce the horn effect and damage broader perceptions.

Advantages and disadvantages

Pros:
* Boosts brand loyalty and customer retention.
* Enables premium pricing and higher lifetime value per customer.
* Eases market entry for new products under the same brand umbrella.

Cons:
* Negative incidents can spread across a brand (horn effect), undoing goodwill.
* Managing and sustaining the halo is resource-intensive.
* Overreliance on halo-driven assumptions can lead to complacency and product missteps.

Examples

• Coca-Cola (New Coke, 1985): Coca-Cola’s attempt to replace its original formula with “New Coke” backfired despite favorable blind taste tests. Emotional attachment to the original product overwhelmed the company’s data-driven decision, illustrating how a halo can be fragile and must be preserved intentionally.
• Apple: Successes like the iPod created a positive halo that helped consumer adoption of later products (iPhone, iPad, Apple Watch). Even when certain products fail or underperform (e.g., AirPower), the overall brand halo mitigates reputational harm and preserves customer loyalty.

Takeaways

• The halo effect is a powerful marketing and psychological phenomenon that links a brand’s perceived excellence in one area to expectations of other products or traits.
• It can significantly increase brand equity and market power but is vulnerable to reversals when a brand damages consumer trust.
• Brands seeking a halo should prioritize exceptional core products, consistent experiences, and carefully managed public endorsements, while remaining vigilant to avoid the horn effect.