Halo and Horn Effect - Meaning, Importance & Example
Published by MBA Skool Team, Last Updated: February 02, 2022
What is Halo and Horn Effect?
Halo and Horn Effect is a type of first impression error that leads to a quick biased perception of someone that can be either positive (Halo) or negative (Horn) based on certain characteristics rather than the actual qualification or skill. To elaborate these terms signify the error one makes by forming an opinion about a person/ situation, just by keeping the first impression in mind. Let us see both Halo and horn effect separately.
When we meet someone, and the first impression of him is very positive, then we tend to ignore the negative characteristics in the person and concentrate only on the positive characteristics. We start seeing the person in the halo of the positive first impression. This is called Halo effect. For example, if the interview starts with a very positive statement from the interviewee, then the interviewer tends to form a positive impression about the interviewee due to halo effect.
If our first impression about a person is negative, we tend to ignore his positive characteristics and concentrate only on the negative ones. We tend to see the person in the light of the negative first impression and hence there is higher probability that we will not like the person. This is called horn effect. For example, if an interview starts with a negative statement from the interviewee, there is higher chance that he would be rejected due to horn effect.
Importance of understanding the Halo and Horn Effect
Interactions between different people in business scenarios or even otherwise should be based in skills, qualifications and value rather than a first impression based on some characteristic. Many times both these effects can lead to negative outcomes. Even if the person was perceived to be great due to Halo effect, the person might not turn out the same way in long term or vice versa in the case of horn effect.
Both these are first impression errors and they teach us to be more objective and make decisions based on actual facts and data instead of immediate perceptions based on 1 or 2 meetings. But both these effects continue to exist. The only way to be right is to be objective and focus on proper well defined processes.
Advantages and Disadvantages of Halo Effect
The advantages of halo effect are as follows:
1. Because of halo effect the brand that already has goodwill among consumers can be leveraged for brand extensions. People seeking the original brand have a sense of trust through the attributes of the former. The brand equity automatically carries over to the extension.
2. Halo effect helps in gathering sponsorships for any activity when a brand associated with the event or product has great brand equity. This makes other players sponsor such activities due to the halo effect of some known sponsor.
3. Halo effect is not only limited to brands but also applies to websites. If people like one aspect of a website, they are likely to judge the website fairly in next usages.
The disadvantages are follows:
1. If the original brand fails, its spill-over effect is seen on brand extensions.
2. Very difficult for new brands to develop and reduces the scope for new innovations when customers are biased in choice due to Halo effect.
3. Makes brand management more complex and susceptible to failures once some mishap happens.
Advantages and Disadvantages of Horn Effect
Some advantages of horn effect are:
1. Horn effect has limited advantages as a person has a negative impression despite all efforts. One possible advantage is that people do not give a lot of work as they have lesser expectations.
2. Another advantage is that if a product does not function, people do not escalate the issue as they had a negative impression of it in the first place itself.
The disadvantages of horn effect are as follows:
1. Horn effect impacts a person’s decision negatively. Hence, even a good candidate or a product have a negative impression can be ignored.
2. Even a lot of efforts can do waste or unnoticed if horn effect influences the decision making of a person
Difference Between Halo Effect & Horn Effect
Halo effect is the positive first impression which comes of a person brand or entity because of certain historic past positive traits. On the contrary, horn effect is closely related to halo effect, and it is a phenomenon when due to cognitive bias, one’s perception for another gets influenced by some negative traits.
Reverse Halo Effect: This is a social-psychology phenomenon that cause positive evaluations of any trait or personality of a brand or person to give negative consequences.
e.g. – Negative evaluation of criminals who use their attractiveness to their advantage.
Trickle Down Effect: As the literal meaning goes, similarly trickle-down effect means the flow of trends from the upper class of the society to the lower classes in a society. It works a lot in advertising because when it works, it creates great deal of exposure for a company in a short period of time.
Example of Halo and Horn Effect
An example in business can be if for a business meeting a person turns up in casuals e.g. T-shirt and jeans. This can lead to either Halo or Horn effect depending upon different individuals. Most of the people in business meetings might expect a business formal attire but if turns out to be opposite then some people might form an impression that the person is not serious about the meeting or is not interested in the business opportunity (Horn). On the other hand, if the meetings let us assume is about a new cool tech gadget then many people might perceive the person to be very technology oriented and cool (Halo Effect).
Hence, this concludes the definition of Halo and Horn Effect along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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