What does packaging have to do with taste? Quite a lot when it comes to perception. To make sense of this, let’s take a closer look at the halo effect in branding.
We tend to believe that people or things that stand out in one area will do better in others. When we see well-designed packaging, we also attribute more value to the product itself. This is an example of the halo effect in branding.
But the opposite is also true. Poor design can lead to a product being perceived as cheap. In this case, we speak of the horn effect.
What Is the Halo Effect?
The halo effect is a cognitive bias of our reasoning. Our brain attempts to simplify the information we take in. This helps us make quick and effortless decisions.
The halo effect was first mentioned by psychologist Edward Thorndike in 1920 in his book A constant error in psychological ratings. Since then, the effect has been investigated in numerous studies. Among the findings are:
- Teachers base their expectations of students not only on their academic performance but also on their appearance (Rosenthal & Jacobson, 1968).
- Attractive offenders receive lower sentences for comparable crimes than unattractive ones (Efran, 1974).  It even goes so far that defendants who look trustworthy are less likely to be sentenced to death (Wilson & Rule, 2016).
- Attractive-looking hosts can charge higher rates on Airbnb. (Jaeger et al., 2019)
Using the Halo Effect in Branding
1. Focus on one brand strength
Doing one thing especially well is better than doing many things well enough. According to the halo effect, consumers will fill in the blanks. Have you noticed this yourself? I have. For example, I usually expect a company that stands for sustainability to avoid animal products as well.
Branding is about establishing a focus. This can serve as a kind of filter for decision-making. Which ideas get prioritised? Which ones get dismissed? In this way, a company can bundle its resources—to colour a certain image in the minds of consumers.
For example, when I ask myself “What comfy, earth-friendly shoes should I buy?”, the answer is “Allbirds”. Over time, the company has anchored this image in my mind. Through consistency in its products, story and experiences.
And being on my mind is almost a win, as Ana Andejelic pointed out.
2. Focus On One Product or Service
The halo effect also comes into play when companies concentrate all of their efforts on one product or service. Apple, for example, benefited from the launch of the iPod. As anticipated, the success of the iPod got directly projected onto other Apple products.
Dyson is another example. The company is known for first-class vacuum cleaners. We, therefore, infer that their hair dryers, for example, also offer this quality.
As Apple and Dyson show, it can pay off to focus on one product, to begin with. Once people have formed an opinion about the brand, the company can gradually launch other compatible products.
3. Nail the Brand Messaging
To get noticed, focus alone is not enough. A well-defined messaging hierarchy helps brands to bring their strengths to the fore and anchor them in the minds of consumers.
4. Invest in Visual Communication
A study confirms what designers have known all along: people associate attractive packaging with high-quality products. Packaging design can even influence price perception. People expect a product with elaborately designed packaging (elaborate: lots of image detail, ornate typography, etc.) to cost more.
But the role of design goes beyond communicating quality and price. Design can also give consumers clues about what to expect from a company and its services and products.
5. Boost the Customer Experience
By customer experience, I mean all the smaller and larger interactions a person can have with a brand. A seamless customer journey, friendly customer service—each touchpoint can influence the perception of the brand as a whole.
What do you think happens when you talk to a helpful service representative? Exactly. The halo effect is at work.
Much of our understanding of branding gets validated by the halo effect. By leveraging the Halo Effect in branding, companies can increase their brand reputation and brand loyalty and thus enhance brand equity.
However, the halo effect also carries a great risk for branding. When people have expectations of a brand, it can be devastating if they get disappointed.
If you found this article interesting, you might also like this summary of 25 cognitive biases that explain the irrational behaviour of consumers.
The Decision Lab, Why do positive impressions produced in one area positively influence our opinions in another area? https://thedecisionlab.com/biases/halo-effect/.
 Prera, A (2021, March 22). Why the halo effect affects how we perceive others. Simply Psychology. www.simplypsychology.org/halo-effect.html.
 Tony Evans Ph. D., When Do Appearances Matter the Most? People rely more on appearances when judging social personality traits. Psychology Today https://www.psychologytoday.com/us/blog/trust-games/202201/when-do-appearances-matter-the-most.
 2021, Ana Andjelic, Why VCs should pay attention to brands, The sociology of business https://andjelicaaa.substack.com/p/how-to-turn-brand-into-a-growth-engine?utm_medium=email&utm_campaign=cta.
Orth, Ulrich R., et al. “Formation of Consumer Price Expectation Based on Package Design: Attractive and Quality Routes.” Journal of Marketing Theory and Practice, vol. 18, no. 1, M.E. Sharpe, Inc., 2010, pp. 23–40, http://www.jstor.org/stable/40470437.