Insights
5.6.2024

Why people pay more for brands than products

Quality matters. But it's rarely what makes people choose you. Here's what's really going on when someone picks one product over another.

Two t-shirts. Same fabric. Same fit. Same factory. One has a plain label. One has a swoosh. Most people would pay three times more for the swoosh. And if you asked them why, they probably couldn't give you a clear answer. They'd say something about quality, even though the quality is identical. They'd mention the name, even though a name is just a word. Here's what's actually happening.

The limits of quality

Quality matters. Nobody's arguing otherwise. But quality alone doesn't differentiate. It doesn't create loyalty. It doesn't make someone choose you over a competitor who's offering something similar.

Quality is expected. It's the baseline. It gets you in the conversation, but it rarely wins it. Most products in most categories are good enough. The differences between them are often marginal. And when the differences are marginal, something else has to tip the decision.

That something else is meaning.

What people are actually buying

When someone chooses a brand, they're not just buying a product. They're buying what that product represents. They're buying identity, association, or belonging. A signal to themselves and others about who they are and what they value.

The person buying the plain t-shirt gets a t-shirt. The person buying the Nike gets to feel a peak performance athlete. Those are different purchases, even if the physical object is the same.

This isn't manipulation. It's human nature. We've always used objects to express identity. Brands just make that expression more legible.

The role of story

Strong brands tell a story that people want to be part of. When you buy from a brand with a clear story, you're not just acquiring a product. You're participating in something. You're aligning yourself with a set of values and a way of seeing the world. Products compete on features. Brands compete on meaning.

The false choice

Quality versus brand is a false dichotomy. The best brands don't choose between them. They deliver quality and meaning. They make great products and wrap those products in a story worth caring about. If your product is poor, no amount of branding will save you. People will try you once and never come back. But if your product is good and your brand is empty, you're leaving enormous value on the table. You're competing on specs when you could be competing on significance.

What this means for you

If you're building a business, quality is your foundation. It's non-negotiable. Get that right first. But once you have a product worth buying, the question becomes: Why should someone buy it from you? What do you stand for? What story are you telling? What meaning does your brand create?

These aren't soft questions. They're the questions that determine whether you're competing on price or competing on value. Whether customers see you as interchangeable or irreplaceable.

Quality gets you considered. Meaning gets you chosen.

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