The Halo Effect

Hey there ?? - It's Sidd.

And guess what? It's Monday! I hope your week is off to an awesome start.

I spent my weekend diving into the world of some of the greatest marketing wonders, and now I'm back at the keyboard, ready to share some gems with you.

I am a huge fan of Apple. And that is not just because they have great products, but also because of their unique way of marketing and branding that makes the company truly inspiring.

Four months back, I bought the new iPad Air 5, and by now, I have pretty much convinced myself to buy the iPhone 15 as well as go for the MacBook Air that will be launched this November.

But, why did this happen? Here comes the Halo effect.

Let’s understand the Halo Effect and think of implementing it in your business in just 4 minutes and 43 seconds!

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Let's dive in and make this Monday count!

Reading Time = 4 minutes and 43 seconds

Placing the bet on the winning horse

In 2005, Apple Computer sales were up 68% and the stock was up 177%.

How did this happen? Some believe that because Apple created Intel-based Macs, whereas some believe that it was because of their newly launched products and operating system.

But, if you see it from a marketing perspective, it was all because of one product: iPod.

Apple leveraged the Halo effect and placed all their bets on the winning horse, and that is the iPod.

In 2004, 10 million iPods were sold. And by 2005, iPod sales surged to 42 million. They doubled down on the product line by introducing iPod shuffle, iPod mini, and the iPod nano.

Yet iPod and iTunes together only account for 39% of Apple's sales. [2 ] How did Apple’s total profits soar 384%?

From creating a halo effect.

Understanding the Halo Effect

Halo Effect is a positive experience of one product, which creates a positive view of another product you have never bought.

It’s our brain’s way of taking a shortcut.

This effect exists because when you have a good feeling about any object/person, you automatically assume all the qualities about that person/object to be good.

This effect was discovered by Edward Thorndike in 1920 while performing an experiment that found Constant Error In Psychological Ratings. He assessed commanders to rate their soldiers. And that resulted in if a soldier was given a high rating in one trait, then this resulted in the other traits getting higher points too.

Various other experiments have proved the halo effect's power to influence consumers.

Like the experiment done by Pierre Chandon and Brian Wansink on McDonald's and Subway.

People assume Subway to be healthy as compared to McDonald's.

So in this experiment, Chandon and Wansink asked Subway and McDonald’s diners to estimate the calories in their meals. They discovered that people believe a 1,000-calorie Subway meal contained 21% fewer calories than a 1,000-calorie McDonald’s meal.

In a follow-up study, Chandon and Wansink gave 23 students a coupon for a 12” Italian BMT sandwich (a 900-calorie meal). Another 23 students were given a coupon for McDonald’s Big Mac sandwich (a 600-calorie meal).

Each student was asked if they would like to order a soda fountain drink or a chocolate chip cookie with their sandwich.

The students who ate at McDonald’s consumed 648 calories, an additional 48 more calories. However, students who ate at Subway consumed 1011 calories, an extra 111 calories. That’s an extra 56% more calories!

Enough of the theory, and let’s go straight to how you can implement this in your brand or product.

Did you find the newsletter till this point interesting and insightful ?

To read this newsletter further on implementation of this effect in various industries and businesses click here

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