Example #004 - Increase the perceived value of your brand far beyond its real value

Hey — it’s Deepak

Had a heated discussion with a potential client, who have been meeting with us for last 6 months! and now asking us to reduce prices to sign the contract.

Reading time - 1min

This one may not work for everyone.

For this we’ll use costly signaling theory.

If you don’t know what it means

Here are some examples of a costly signal:

• A university degree carries more meaning than a Udemy course

• Asking someone out face to face carries more meaning than on Tinder

• A handwritten thank you card carries more meaning than a text

So a handwritten thank you card is a costly signal compared to a text…you get the idea.

Here are some key points about costly signaling theory:

• The signal has to be expensive or difficult: If it's easy or cheap for anyone to do, it doesn't prove anything special.

• The receiver has to understand the signal: Like in the above example if the receiver doesn’t understand the time & effort it takes to craft a handwritten thank you card than it won’t work.

4 simple ways to apply costly signaling as a business

Pay attention to detail in your website's user experience, product photography, or marketing materials, this sends a message of dedication, perfectionism and quality and increases perceived value of the brand.

Like no nasties does.
Organic Clothing comes to life.

They guarantee a few things to us:

• No child labour or forced labour

• No discrimination

• Payment of fair wages including overtime

• Freedom to form or be part of labour unions

• Strict adherence to health and safety standards

This transparent storytelling & facts builds trust and appreciation for the brand's ethical approach and serves as a costly signal.

Like this brand, you can also create a social media campaign featuring interviews with the farmers involved in the production process.

This humanizes the brand story, showcasing the craftsmanship and dedication behind each and every cloth produces.

Offering limited-edition products creates a sense of scarcity and desirability. This "costly signal" positions your brand as associated with exclusivity and high demand.

It shows that you are not just in the market to make a profit and increase revenue.

If there is one thing almost every high-value brand has in common is white space, they only show what’s necessary and don’t even try to justify their prices.

Try experimenting with different costly signals with your brand to see which works with your audience.

Appreciate you reading. It really means a lot.
If you found it useful, consider sharing with someone who might be interested.

Deepak - see you Tuesday

What I do again?

I run an agency that builds & scales Shopify stores.

if you're interested in working together, we help in two ways:
1.) Building & optimizing Shopify stores
2.) Creating & managing growth funnels to help you scale your store

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