1. How Does The Halo Effect Work

What makes the Halo Effect so powerful is the fact that people subconsciously make judgements in a lateral manner, what I mean by that is that a person or even a group of people is very likely to let unrelated factors affect their decisions regarding someone or something. One might speculate that this method of evaluating things has in a way evolved from how we humans cross check using multiple senses to determine if food is safe to eat (i.g. Sight to see if the color of a fruit shows that it’s ripe, or smell to know if meat is rotten), French cheese being the only exception to this rule of course. 

The same logic applies to how we see other people, someone who is well groomed and dressed in a nice suit lets off a specific signal that indicates that they probably have more money than the average person. This article from Forbes for example mentions that looking good might even lead you to making more money: “A Yale University study from Daniel Hamermesh finds employers pay a beauty premium to attractive employees. The beautiful workers earn an average of roughly five percent more, while unattractive employees can miss out on up to almost nine percent, according to the study.”

By extension we can easily infer that the same mechanics apply when the subject of judgement is not food or a person but rather a brand. This is not necessarily a bad thing, because the Halo Effect is constantly being used in many different ways by pretty much all the big companies you know and “love”. 

2. Its Use To Promote Organic Growth

Kevin Hale from Y Combinator - who I’m sure you already know - says when talking about how he evaluates startups that: “The best companies in YC or around the world grow organically. They grow by word of mouth.” We can all agree that Kevin knows a thing or two about what matters in a startup, otherwise he wouldn’t have gotten to where he is right now, so it is safe to say that organic growth is important and that you should use every tool you can to make it happen.

Humans are social creatures by nature, we often find joy in group experiences which makes branding automatically the best way to get the word out, yes it’s even better than advertising. You don’t believe me? Then ask the man of the hour, in an interview with Marques Brwonlee, Elon Musk said this about Tesla “We don’t spend any money on advertising.” Plain and simple. They focus on nurturing a relationship with a specific group of people who are already obsessed with Tesla, constantly surprising them by pushing the envelope further than any other car brand has ever done before. 

If you are able to impress people - whether it is through the way your new product looks and feels or the way your customer service staff greets a caller on the phone - most often than not they are compelled to share their excitement with others. In other words, your fans who relate to your brand's vision and feel strongly about it will make your company, product or service the topic of conversations with their friends and family. 

3. The Importance Of Brand Rejuvenation

I’m sure that this is already apparent to you but there are countless brands out there constantly trying to occupy both physical and mental space. Availability is the name of the game and because you have to earn your spot in someone's mind, you can’t just rely on advertising alone. Being different is the first thing that comes to mind when founders are asked about how they can stay on top of the competition. But from what we now know about the Halo Effect, it’s easy to see that you can take this one step further. 

Take Apple’s Animojis as an example, it’s what you might call a demo feature - something that looks cool on a presentation but would rarely be used in real life - but if you look deeper you will find out that it’s way more than that. It sounds crazy but there are probably a lot of people out there who think Animojis are fun and use them every time they Group FaceTime their friends. It’s for those hardcore Apple fans that that feature was created, they love it and they won’t shut up about it.

People will forget about your brand. That’s a given. But your true fans only need small reminders here and there to refuel their excitement. Tell a story through a new feature that would otherwise be inconsequential and all of a sudden you’ve gained free publicity.

4. The Horn Effect

You can see this as the evil twin of the Halo Effect, negative impressions in one area affecting opinions or feelings in other areas. Having a brand is not optional, it is simply people’s gut feeling about your company and there is no changing that. The way to ensure a good brand though is to have a hand in shaping it. 

Whether or not you invest in branding efforts, you will still end up with a brand. By association, this brand will be affected by any negative events that could occur during the lifetime of your company. The web browser Edge, no matter how hard Microsoft tries, will forever bear the terrible reputation of its predecessor Internet explorer. 

To cancel out the Horn Effect you simply must use the Halo Effect, regularly giving people more reasons to love your brand than they have reasons to hate.

Conclusion

Due to the nature of the way we consume information in 2020, the rapid news cycle and the increasingly shrinking societal attention span, you cannot expect people to care about a brand for a long sustained period of time. Unless you proactively try to remind them of your brand's vision, and as we’ve explored in this article one of the best ways to do so and to have it spread from a few fans to a large crowd of people organically, is through the Halo Effect.

There is of course way more to this than what we just talked about in this article. It’s a very interesting phenomenon to learn about. But what we want to do is hopefully show founders that they can truly transform their startups by utilising the Halo Effect, turning small and trivial aspects of their products or services into selling points that maybe are not for everyone but can still have a huge impact.