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Exclusivity through high price points


What is it?

This is a common tactic used by luxury brands.

Have you ever noticed how others view and treat you differently when you wear certain brands? On more than one occasion I’ve heard people audibly gasp at the sight of a clothing label when I slipped off my Burberry Raincoat or St. John’s knit jacket. Brands like this offer superior quality products that few afford, yet many recognize & respect.

The high price point checks several psychological triggers all at once:

  1. As a communal strategy, the high price point, helps to draw a clear line between those who are part of the (Rolex, Omega, Molo9™, Mont Blanc, Burberry, MD9™, Ritz Carlton) club & those who aren’t.
  2. As an associative strategy, the high price point makes certain brands more appealing since the buyer can make such a purchase to indicate to their peers that they are associated with everything the premium brand stands for.

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Take action

High price points not only create exclusivity, they indicate that the customer experience will be superior as well. PEOPLE PAY PREMIUM for good customer service. If, in the early days, you are the one reading all of the feedback (maybe after a virtual assistant filters out the garbage & spam) and you are the one building out the new features that people ask for, then you are the one metaphorically waiting on your customers like a luxury brand.

If you wish to maintain a high price point, you must prioritize good customer service. To do this you will need to keep higher margins to cover the costs of hiring, training and retaining good customer support reps, and anticipate that this will be one of your higher internal costs.

If you do have an existing brand that does not offer a luxury line, roll out a new premium offer using the halo effect. Over time you will slowly be able to follow in the steps of Ralph Lauren & have multiple labels at multiple price points, or have the opportunity to cut your lowest margin products and services altogether.


Read more on the topic

  1. Pricing Strategies



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