Understanding what it is that your customers are looking for not only from a product but also specifically from your brand as a whole is the difference between success and failure in your go-to-market efforts. Not knowing how customers perceive you on important brand health attributes is like trying to swim upstream without a paddle, and only gets worse for brands that are unaware of what kind of Halo, or Horn, Effect bias they may actually have with customers.
What is the Halo Effect bias?
Coined by psychologist Edward Thordike in 1920, the Halo Effect is “the tendency to allow one specific trait or our overall impression of a person, company or product to positively influence our judgment of their other related traits.” Originally Thordike studied this phenomenon as a bias towards appearance and attractiveness. In short, people who are more attractive are seen as having more positive qualities, and negative traits are overlooked.
Psychology studies throughout the decades have confirmed this bias by asking participants to look at pictures of random people with different levels of attractiveness. Participants inevitably attribute “qualities such as intelligence, kindness, and social skills to attractive individuals while assigning less favorable traits to the unattractive ones”. This Halo Effect bias transfers over to other areas of life as well, for example assuming that someone with a degree from an ivy league school would make a better employee than someone who doesn’t have a degree from a top school. Or associating someone who is skinny as healthy and fit.
This bias is very similar to the study of Heuristics, which are mental shortcuts we make to make decisions easier even though they are sometimes irrational or based on inaccurate information. As well as confirmation bias, when we focus only on information that reinforces our beliefs and ignore any information that contradicts it.
How Does the Halo Effect Relate to Your Building Product Brand?
Businesses, especially large brands, see the Halo Effect bias when customers associate a brand positively and as a result feel that same positive connection extended to every product sold, regardless of its features or release. For some companies this is a marketing goal. The strategy is to spend a large portion of your marketing budget on just one product or brand attribute so that customers will automatically relate the positive association to the rest of your product lines.
A very successful example of this was Apple when they released the iPod in 2001. The iPod was almost exclusively and heavily advertised with nearly all of their ad dollars going into the fun and creative campaigns, with nearly no marketing to their previous main product lines of personal computers. It was their cheapest product they sold, yet was so massively popular that customers purchased other, more expensive, Apple products like MacBooks. Nowadays that Halo Effect bias is still present, with customers wanting and loving their iPhones so much that they associate the wide variety of other products, like AirPods and Apple Watches, with that level of quality and “coolness”.
We are all susceptible to a Halo Effect bias when it comes to shopping, whether its implicit or not. In college I always had Burt’s Bees lip balm, I loved it and it was all I used. When we had our baby last year we went to get all our basics and saw that Burt’s Bees had baby clothes, burp cloths, baby shampoo, all kinds of baby products – of course we had to buy them. The clothes are honestly poorly sized and most of the time more expensive, and of course does not fit into their product line of personal care items that everyone knows them for - but it was Burt’s Bees! And I keep buying it because, well, its Burt’s Bees! In effect I have taken the one trait, that I liked one specific lip balm, and applied to their entire brand as a whole. It doesn’t matter that there are probably superior brands to these items, I keep going with the one association I have of quality lip balm and the Halo Effect took over, I buy Burt’s Bees everything.
In our world of building products, customer perceptions about power tool brands stands out as a top product category where the Halo Effect creates massive implications to the success or failure of ensuing product launches. For example, Makita power tools have developed a strong perception of being fit for professionals and craftsmen because of their durability, while Ryobi power tools often appeal to entry level DIYers and handy homeowners because they’re cost-effective and a lower barrier to entry for the average homeowner.
Pros typically have strong brand loyalty and are unlikely to deviate from their preferred brands. While it's important not to assume unwavering loyalty, this trend generally holds true across the 18 product categories we studied in the latest Building Products Customer Guide.
It's clear that certain product categories have stronger loyalty among Pros than others.
Pros are the least loyal to brands when it comes to decor items, storage and cabinets and counters, with only 24% to 27% of specialty tradespeople always purchasing their preferred brand.
Unsurprisingly, tools (41%), paint (34%) and outdoor power equipment (33%) hold the highest brand loyalty with specialty tradespeople always purchasing their preferred brand.
The “Horn Effect”
While every brand manager hopes that the Halo Effect for your brand will be positive, there can sometimes be a negative association, however, with your brand. This negative association is known as the "horn effect." When customers only associate your brand with one characteristic and apply it to everything, it makes it hard to try new product lines or offerings that don’t exactly fit into your current model, an unfortunate consequence of this negative association.
One very expensive example of this was McDonald’s release of the “Arch Deluxe” burger. The Arch Deluxe burger was developed to be a more expensive and an “adult” burger to appeal to “urban sophisticates”. The company spent $200 million advertising to adults that this was not your average fast-food burger for kids.
Despite the massive advertising budget - the product was not received in the market. Even though the market supports high quality burger chains now, customers did not feel McDonald’s brand aligned. In other words, it's not just about IF there's a market for it. It's about if your brand can be IN the market for it. McDonald’s is a fast food joint, that’s cheap, and for families, not a place you go for a sophisticated burger experience. Similarly, certain brands in the building products space are simply not positioned to introduce new luxury products under existing brands.
Let's consider one more example: When my husband and I moved out of our college apartment we needed to get some nicer furniture that fit our new lifestyle and bigger space. We loved IKEA, almost all of our furniture was IKEA, but when I suggested we get a dining room table from there he said “No, we need something nicer, something that is going to last”.
The reality is that IKEA has several price points, from very cheap but practical DIY to mid-range and nicer quality. To husband, however, they were only the low-end budget brand – which worked for us then but not now.
Here was the Horn Effect bias in action; he took their “cheap and practical” trait that we knew them for, and it did not fit with what he wanted. While this worked well as a Halo Effect when we were students, it eventually had a negative connection as our station in life and lifestyle changed.
To this point, remember that customers' perceived needs will change as they change too.
Navigating the Halo Effect Within Building Products
So, what does this all mean for your brand?
Track, track, track. Track your brand health religiously.
Fortunately for brands in the home improvement, lawn and garden, and building products spaces, you can make smart decisions with less effort than consumer brands. While consumer brands may track brand health on a quarterly or even monthly basis, building products companies are able to make strong strategic decisions off of annual brand health research.
Checking in with how your brand is perceived in the market as a whole and to your specific customer segments is critical. Whether your goal is to create a Halo Effect bias with your brand or to stay away from it, tracking your overall image is vital. Companies will spend a large portion of their marketing budget creating campaigns for a new products, but often do not have a grounded understanding of their actual brand image and how that will affect a new product line launch or entry into a new market.
- Are you perceived as a value brand or quality?
- Is your brand dependable or antiquated?
- Is that image changing as the market evolves or has it stayed consistent?
- Does your new product line fit into that perception customers have of your brand?
Keeping an eye on where you align with other brands is key as well to not only ensure a successful launch or new market entry but also to make sure the company as a whole is in line with long term goals. If your brand has a Halo Effect with customers you need to be able understand what their association is. Either it’s a positive that you can leverage, or it’s something you need to be able to overcome with additional marketing or outside branding.
Understanding what it is that your customers are looking for not only from a product but also specifically from your brand as a whole is the difference between success and failure.
In a brand health study you are able to drill down into what customers are feeling to get answers to questions like:
- What is the usage of various types of your product?
- What is the brand awareness and brand usage of each type?
- What is the likelihood of considering and recommending a specific brand?
- What is the willingness to purchase other products made by the company?
- What are the key brand selection drivers?
- How well do brands perform on the selection drivers?
One of our most popular brand related research project types is our Brand Health Tracker studies, in which our market research team handles the heavy lifting for your brands such that you have longitudinal data to benchmark your brand health on and monitor changes as a results of various go-to-market changes.
From these answers researchers can determine how much of a Halo Effect bias is affecting customers by looking at the overall brand health compared to competition. Deeper dives of qualitative interviews and focus groups also help tease out what makes a customer actually feel the way they do about a brand. Not knowing these answers ahead of a launch/new market entry creates an uphill battle for growth, especially when you are unaware of what kind of Halo, or Horn, Effect bias you may actually have with customers. McDonald’s would have known that a more expensive sophisticated burger was not in their wheelhouse, and possibly offering that under a different brand would have saved them $200 million. IKEA is most likely aware and comfortable being in their the position in the market right now, as a functional but value brand furniture supplier.
Commission Custom Brand Health Market Research
For leaders plagued with questions about what’s going on in the mind of your customers, how your brand health is fairing, and what kinds of markets you should be targeting to achieve YoY company growth, our research team at The Farnsworth Group is here to help.
For more than 30 years, manufacturers and suppliers in the building products, home improvement, and lawn & garden industries have trusted our primary research team to gain deep insights in their customers’ behaviors, their go-to market strategy opportunities/risks, and their overall market presence.
Written By Bonnie Hoy
Since embarking in the market research field in 2014, Bonnie has done a little bit of everything, from programming surveys and fielding projects, to sending survey invites, cleaning and analyzing data, and beyond. Bonnie joined The Farnsworth Group in 2022 as a Project Director to bring her experience with qualitative and quantitative market research studies. Bonnie grew up in a home where her mom was an avid DIYer, so every summer Bonnie would assist with at least one major home improvement or lawn and garden project. Bonnie is an active runner and traveler who loves to read. Bonnie’s latest learning challenge is how to be a parent to her baby boy, Alex!