Learn what it is, and how to make the most of it. The cognitive bias of the halo effect can hurt your business’ reputation. But you can also leverage it to add a glow to your whole business.
Your brain, my brain, your customer’s brains…are lazy. Instead of working things through step by step, our brains use shortcuts. It’s how we get through the thousands of decisions every day.
And these shortcuts, called heuristics, usually work. Usually. But they can also go wrong and lead us astray. And when that happens, it can hurt your business. Or, perhaps counterintuitively, help your business.
A prime example of our brain’s shortcut going wrong is the “halo effect.” This is when we allow our positive impressions in one area to spill over to our opinions in another unrelated area. For example, studies have shown that if someone is attractive, we tend to assume that they are also intelligent. We perceive one quality and then assume that the person has other, unrelated qualities.
How the Halo Effect Can Hurt Your Dance Business
As dance business owners, we need to be aware of the halo effect so we can leverage it to help our business. But we also need to prevent this cognitive bias from hurting our company.
One area where the halo effect can hurt us is in managing our staff. We’ve probably all made this mistake. We have an employee who’s smart and has already excelled at a certain function. So we give them work in unrelated functions, thinking they’ll be great at those, too. But they’re not. And we’re disappointed. Yet there was no reason to assume they’d be good at that unrelated function. That’s just the halo effect in action.
The halo effect can also distort how we look at our entire business. You see this mistake all the time in the business press. If a company’s numbers are good, then everything they’re doing—from marketing to product to service—has a glow on it. And when a company is struggling financially, the assumption is that everything they are doing is bad.
That’s why it’s best to evaluate your efforts independently of your business’ overall financial picture. If you didn’t know the numbers, how would you rate your marketing? Your social media? Your service? Looking at each element individually will remove the halo effect and help you make better decisions.
How to Turn the Halo Effect to Your Advantage
The halo effect can also be a powerful tool for your business. For instance, in your marketing. Just ask Apple.
The year is 2004, and the iPod is selling well, although it accounts for less than a third of company sales. Yet Apple decides to put most of its advertising dollars behind the iPod. You probably remember the ads. They were everywhere.
Why did Apple focus on its minor product? Because the iPod was cool. Apple hoped that coolness could create a halo effect around its other products. And it did: In 2005, Apple reported that its sales had increased 68 percent overall and profits were up 384 percent. Apple’s astounding growth came from the sale of other products that were suddenly cool because of the halo effect of the iPod.
Notice that Apple focused on one product. We should do the same. It’s tempting to try to tell the consumer everything that’s great about our company. Don’t. That creates confusion. People can only retain so much. Instead of the halo, you’ll get a fog effect.
Focus on one thing at a time. Is it your stellar teachers, your fun vibe, your convenience, your over-the-top service, your fashion-forward leotards? Find what matters to your customer and lean on that. Hard. And remember that what you think matters most about your studio or your dancewear may be different from what’s most important to your customers. Survey them to find out what really matters most to them and promote that aspect of your business. This Dance Business Weekly article will help you run a good survey.
Your Website: Is the Halo Effect Working For or Against You?
There’s one place where you are benefiting from the halo effect—or are being hurt by the reverse halo effect, or horn effect. And that is your website. Consumers are forming an impression of your company from the look of your website. And like an attractive person who people automatically think is intelligent, the attractiveness of your website will affect how consumers judge your company’s offerings.
Research has shown that more often than not, people’s impressions of a company from its website were design-based. So consumers decide if they like or trust your business by how your website looks.
Thankfully, looking good is pretty easy. A Google study was able to define what people found attractive in a website. And it’s easy to achieve. According to Google, people think a website is attractive if it has low visual complexity and high prototypicality (meaning it looks like other websites in its category). So keep your websites simple and the design clean. And don’t reach to be too original in your design. That will hurt how people see your company. Save your creativity for the images and your text.
Make sure you have reviews on your homepage, too. Studies have shown that positive reviews will predispose consumers to like you. In a halo effect of sorts, the reviews will positively affect how they view subsequent interactions with your company.
Positive reviews are like having mini spokespeople on your page. Be thoughtful about which you post—curate positive reviews to sync up with what you’ve chosen to focus on to create your halo effect. For example, if you’re focusing on friendliness, post reviews about how friendly you are.
For maximum impact, include the customer’s photo; it makes the review more real. (Get permission and pull the image off their social media.)
The Bottom Line
The human brain isn’t going to stop being lazy anytime soon. Whether we want to or not, the halo or horn effect is impacting our dance businesses. If we are aware of it, we can make sure it doesn’t hurt our business. The better we understand the halo effect, the more we can leverage it to help our businesses thrive.
Gilbert Russell is president of Brio Bodywear, which has two brick-and-mortar dancewear stores in Ottawa, Canada. Through his consulting firm, No Qualms Retail, he shares his experience and knowledge with other independent retailers.