The Halo Effect is a psychological concept that explains how a single trait increases or decreases the perception of other traits of the same person, brand, or company. Essentially, people are prone to connecting positive associations with a single trait to the person or brand, which is why a person with a particularly positive trait is seen as an outstanding individual in general. Companies in particular can benefit from the halo effect by affecting the way consumers judge their new products.

Essentially, companies chase the halo effect because it establishes both brand and customer loyalty. Positive associations with a brand, product, or company can be passed onto new products and can encourage customer retention; creating a halo effect. This can be incredibly effective in displaying the brand’s quality and services to prospective customers. If a brand has a stellar reputation, once potential customers try a product, they may find that the expectations set by the halo effect are met.

Negative perceptions about a brand, product, or company can also be passed on and known as a horn effect. If an organization releases a bad product that does not meet customer expectations, this can hinder loyalty and trust within the customer base. Keeping this in mind, it is imperative for companies to aim for and maintain a positive image; as this impacts the customer experience.

To ensure customer satisfaction, companies must strive to create the best products and services, while utilizing the psychological impact of the halo effect to their advantage. Showcasing that a brand is reliable and trustworthy can allow customers to feel comfortable and confident in their purchases and put their trust in the brand. Product quality is key to maintaining a brand’s stellar public image, however utilization of the halo effect is a powerful approach to promote brand and customer loyalty.