The Halo Effect - A Great Example of Thinking Fast and Slow

In a previous episode, I talked about a study on happiness which found that when asked if people thought they would be happier if they were to suddenly be a paraplegic or suddenly win the lottery, most everyone believes they would be happier winning the lottery and significantly less so to lose the use of their limbs.

In actuality, these two groups of people – paraplegics and lottery winners, are essentially just as happy as anyone else.

Why would this be and why would people predict it incorrectly? It has everything to do with the focusing illusion. When people only focus on one piece of a giant puzzle that piece ends up with far too much weight. Losing the use of your legs or winning the lottery is just one small piece of an entire life. There are so many factors that play into happiness, and while these pieces are significant and impactful in many ways, they don’t tend to have an impact on overall happiness like we think they would.

This episode is all about the focusing effect and how these principles can be used in your business and your life. I talk about focusing on that one thing and making it incredibly clear to your target market. I also talk about asking yourself what people should focus on when thinking about your brand and what would motivate your ideal customer to take action.

Show Notes:

• [04:44] A study about happiness that illustrates the focusing illusion.
• [05:47] Kahneman did a test back in 1998 to find out if Californians or Midwesterners were happier with their lives.
• [06:24] If you said Californians, you would be wrong. A focusing illusion bias puts more weight on things like sunshine and a seemingly laid back lifestyle. People adapt to their surroundings.
• [07:06] “Nothing in life is quite as important as you think it is while you are thinking about it.” - Daniel Kahneman
• [07:53] Focusing on something, not surprisingly, puts a whole bunch of attention on it.
• [08:59] Think about decluttering and how you would feel getting rid of something you might need. The focusing illusion is combining with counterfactual and prefactual thinking to maintain your status quo bias and keep you stuck.
• [09:54] When you are asked to think about how happy someone would be or how angry something would make you or how satisfied you are or would be…your brain will focus WAY too much on a few key aspects and answer in a way that is just not in alignment with reality.
• [10:47] Social proof. People are more likely to take action based on the thoughts and actions of others. They are also likely to weigh a few key items as the most important indicators of their happiness.
• [12:32] Our brains are split up into two processing systems: the subconscious is super busy filtering through 11 million bits of data per second, while the conscious can only handle 40 bits per second. Your brain will sort through all of the data to validate what you're focused on.
• [13:20] Anything you want to believe (or that all important first impression) will be supported by the focusing illusion.
• [13:36]  Another example by Kahneman from Thinking, Fast and Slow using the halo effect.
• [15:25] Initial traits in a list changed the very meaning of the traits that appear later. The sequence in which we observe characteristics of a person is often determined by chance. Sequence matters, however, because the Halo effect increases the weight of 1st impressions.
• [16:40] When you are focusing on something, a particular aspect, you build it up in your mind and it changes your perception, expectation, experience, and memory of an experience.
• [17:20] There's a high likelihood that you will create bias in questions asked on surveys - hire an expert.
• [18:08] Focusing on finding examples to back up your brain’s earlier perceptions is confirmation bias.
• [19:17] It's good to take a step back and ask yourself if your bias may be guiding your interactions.
• [19:48] I share the story that was inspiration for this episode.
• [22:02] Live that truth and focus on that now. Your brain will focus on what you want it to.
• [23:34] Think about your approach to a project – what you focus on, the way you do things (or the way the company does things).
• [24:31] The problem that is facing you may not be as big of a deal as it seems – and something you aren’t even aware of could create a much bigger impact if you took the time to look for it.
• [25:36] A story about a detergent company fixing an obvious pain point and communicating it in their advertising.
• [26:32] Find the one or two points of value and talk about those…all the other features and benefits are extra.
• [27:12] Focus on that one thing and make it incredibly clear to your target market.
• [28:12] The mindstate guides the focusing effect and what the subconscious is looking for. Narrowing your messaging makes it more likely to resonate because it aligns with the brain of your customer.

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Links and Resources:

• Melina@TheBrainyBusiness.com
• The Brainy Business on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• 88. Marketing to Mindstates: A Discussion With Author, Will Leach
• Mountain Clarity
• Would You Be Happier If You Were Richer?  A Focusing Illusion
• Does Living in California Make People Happy? A Focusing Illusion in Judgments of Life Satisfaction
• 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode)
• 71. Prefactual Thinking: How to Turn “What If” Into “Why Not” – Behavioral Economics Foundations
• 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode
• 83. How to Organize Your Brain with Behavioral Economics
• 87. Social Proof: How to Use Herding to Boost Engagement and Sales
• Thinking, Fast and Slow (note this is on page 82)
• 76. The Brainy Benefits of Gratitude