halo effect

noun
Updated on: 13 Oct 2017

Definition of halo effect

:generalization from the perception of one outstanding personality trait to an overly favorable evaluation of the whole personality

First Known Use of halo effect

circa 1928


Financial Definition of HALO EFFECT

halo effect

What It Is

The halo effect is a phenomenon whereby consumers perceive the products or services from a certain company to be better than they really are.

How It Works

Let's say Company XYZ makes the "Xphone." The Xphone has many functions and a nice design. Priced higher than the competition, it quickly becomes a status symbol, especially among hipsters and others who are image-conscious.

This group of consumers celebrates the Xphone publicly and even camp out in front of Company XYZ stores to get the latest version, despite the fact that competing devices are less expensive and have the same features. The Xphone is the victim of the halo effect.

Why It Matters

The halo effect can mean huge sales and steadier cash flow for companies. It creates brand equity. However, because it is often an emotional rather than logical affinity, the halo effect is very fickle and can disappear quickly as fads come and go.


Medical Dictionary

halo effect

noun

medical Definition of halo effect

:generalization from the perception of one outstanding personality trait to an overly favorable evaluation of the whole personality

Learn More about halo effect


Seen and Heard

What made you want to look up halo effect? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

to suppress quietly or indirectly

Get Word of the Day daily email!

Test Your Vocabulary

The Exceptions Quiz III

  • one-green-toy-robot-amidst-many-red-toy-robots
  • Which of these words does not mean "nonsense"?
How Strong Is Your Vocabulary?

Test your vocabulary with our 10-question quiz!

TAKE THE QUIZ
SCRABBLE® Sprint

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!