Brand Strength and the Halo Effect in Marketing

If you are interested in increasing the brand strength of your firm there is someone you need to meet. His name is Edward Thorndike.

You may remember his name from Psych 101 as a pioneer in educational psychology. In 1915 he published a paper in which he identified an unusual problem.

The Halo Effect

Thorndike discovered that when people rate someone on one trait it is correlated with their ratings on other traits. Put simply, people tend to see a person’s performance as all good or all bad. This phenomenon has come to be called the “Halo Effect.”

While Thorndike saw the Halo Effect as a source of measurement bias in his research, the savvy marketer will recognize it as the foundation of the modern concept of brands. When we develop a favorable impression of a firm when interacting with one partner at a firm we tend to view the whole firm in a favorable light. Our impression of that firm’s brand is strengthened.

Not surprisingly it can also work in the other direction. Unfavorable impressions are also generalized via the “Devil Effect”.Think of it as the Halo Effect’s evil twin.

Brand Strength Defined

The concept of a strong brand is something that we all understand on a very intuitive level. From our own experience, we know that firms with high brand strength do better in the marketplace, whether they need new clients, business partners or employees.

So what exactly is brand strength? At Hinge, we define brand strength in professional services as the product of a firm’s general reputation and visibility among target clients. Firms that have better reputations coupled with higher visibility have stronger brands.

High visibility alone doesn’t really strengthen your brand. Does any experienced professional services marketer believe that full-page display ads alone strengthen your brand?

Similarly, a great reputation that few people know about gains you little more than client loyalty and a handful of referrals. An unknown brand is not a strong brand.

Increasing Brand Strength

So how do you increase your firm’s brand strength? Just telling everyone that you have a great reputation obviously won’t do it. It’s not believable. Instead, you must demonstrate it.

But demonstrating your reputation across every possible service delivered to every possible industry is a near impossible task (not to mention expensive). What’s a marketer to do?

Here is where Professor Thorndike and his Halo Effect come to your rescue.

Your firm doesn’t need to be the best at everything. You just need to be the best at something and the Halo Effect will help pull the rest of your services forward. Similarly, you don’t need to be highly visible to everyone. But you do need to have a strong presence somewhere. From that starting point, your brand strength can grow.

Why Firms Fail

It almost seems too simple. Yet firm after firm fails to use this simple insight to build brand strength. Instead, they stretch their marketing budget across all their offerings and target every possible client with the same intensity. By trying to be everything to everyone firms end up being nothing to anyone.

The Halo Effect does not help these firms build stronger brands. Instead, it reinforces an impression that they are nothing special. They allow themselves to become a commodity and are reduced to competing on price alone.

A Better Approach

When our clients want to build stronger brands, we often recommend focusing on an industry in which you have a strength and a service where you can gain a true advantage. By devoting your resources to becoming the best in that segment you have a reasonable opportunity to develop a strong reputation and high visibility. From that core brand strength, you can more easily expand. Add additional services and move to additional industries where your visibility can be leveraged.

Download the Rebranding Guide – Second Edition

And yes, I’m fully aware of the political perils of focusing marketing efforts on a limited set of targets. Internal partner politics can foil a great strategy. But the alternative is not very appealing.

In our ongoing research of professional services buyers, we found that prospective clients are evaluating firms based on industry knowledge and subject matter expertise. For firms with strong brands in these areas, they have the good Professor Thorndike on their side.