Halo effects and Brands: being cautious when reviewing customer feedback

Customer feedback surveys are subject to halo effects so you must be careful when interpreting the results.  A good result in a specific attribute does not necessarily mean that you are performing well.

Halo effects have long been known and appreciated by psychologists.  Per Wikipedia:

“The halo effect is a cognitive bias whereby the perception of one trait (i.e. a characteristic of a person or object) is influenced by the perception of another trait (or several traits) of that person or object. An example would be judging a good-looking person as more intelligent.”

This effect is important to those of us attempting to understand how well we are delivering to customer needs because a good score in one area, say overall brand image, can artificially lift scores in other areas of service delivery.

This was brought home to me very clearly in the results of a mobile phone provider survey performed by Canstar (Virgin rings true for mobile phone carrier customers) . The chart below provides the high level responses for different areas of carrier performance.

There are a couple of interesting themes in this chart:

Firstly, notice the relative similarity of responses in all areas for each carrier.  For instance Virgin Mobile has 5 stars across all ratings and Vodafone has 4 stars for all ratings.  This is probably an example of the halo effect: respondents are scoring the organisation in a similar way across all of the different areas of performance.

Secondly, compare the network coverage for Virgin Mobile and Optus.  While Virgin receives 5 stars, Optus is only rated at 3 stars.  Not that interesting until you realise that Virgin uses the same network as Optus.  In fact Virgin Mobile is owned by Optus.

There may be good reasons for some difference in customer perception of coverage.  The carriers may have different customer demographic profiles that lead Optus customers to be living in areas of poor coverage while Virgin customers live in areas of good coverage.  However, with a claimed 96% of population covered, the difference would seem to be small and not enough to support a 40% difference in perceived coverage.

In reviewing these data it does seem that Virgin Mobile’s very high Network Coverage score owes as much to halo effects from it’s strong and positive brand association as it does to technical performance.

And, on the up side it shows that the right brand values and emotional engagement can lift overall customer perceptions in all areas of a company’s performance.

On the down side it shows that halo effects can and do alter customer perception of company performance (up and down) and you need to be careful when interpreting customer feedback.

Do you have a good example of halo effects?  Leave a comment and let me know.

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Comments

  1. Joel Norton says:

    Hi Adam, great post and a great example of the Halo effect at work. I know from a marketing point of view, results to direct response campaigns always improve when there’s some form of brand advertising running at the same time due to the halo effect.

    It’s great for overall sales but can make it difficult when you’re reviewing campaign results and trying to identify what did and did not work, and planning future tests or rollouts as it’s difficult to quantify the halo effect.

    Virgin is an interesting example, as their whole business relies on the Halo of the core Virgin brand values, hence they can typically get away with spending less on marketing than their competitors and still produce amazing results.

    Cheers, Joel

  2. Interesting article and a good read. I was not aware of the halo effect; but the example helped a lot. Furthermore, I agree with Joel Norton that results of direct response campaigns improve when brand advertising is going on in parallel.

    This is also another elaboration that humans are emotional beings. We tend to overlook certain aspects, or lay less emphasis on the lack thereof, when we are generally happy with certain product/ brand.

    — Kashif

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  1. [...] and you are likely to also get information on other areas of the business. You will also get halo affects and other human based biases. They will miss key areas, include unrelated items, score you based on [...]

  2. [...] and you are likely to also get information on other areas of the business. You will also get halo affects and other human based biases. They will miss key areas, include unrelated items, score you based on [...]

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