Why Customers are Willing to Pay More for a Well-known Brand
1. Social acceptance: signalling competence, confidence and status
When a consumer chooses a premium brand bag in preparation for a high-stakes event (for example: “all in my heels” for an interview at a branded fashion firm), they’re operating under social-acceptance dynamics: demonstrating they “have it together,” they “belong,” they project competence.
In business terms this is about brand as social signalling—the brand communicates your access, your alignment with a desired peer group, your credibility.
Premium brands offer social utility (beyond functional utility) — the value of affiliation with a set of others, visibility, prestige. For example one study found that non-quality utility (brand image, prestige) “appears to be the dominant influencer” in willingness to pay more for national brands vs store brands. Capital One Shopping+3profrajsethuraman.net+3Branding Strategy Insider+3
From a pricing strategy standpoint: when a brand fulfils a social role (status, peer acceptance), it gains pricing power because the buyer isn’t only buying the bag—they’re buying the image.
Statistically: according to one 2025 survey, 35 % of global consumers said they’d pay more for a brand they trust—up from 25 % previously. marketingcharts.com Another found 87 % of consumers will pay more for products from a brand name they trust. Capital One Shopping+1
Example 1: A coach bag purchase before an interview—consumer aligns self with the “fashion-industry professional” social set; the brand signals you belong.
Example 2: Wearing the well-known brand in networking contexts—social acceptance via brand alignment.
Example 3: Prestige brands used as markers in board-room settings (leaders choose telling brands to signal status and credibility).
Example 4: Corporate gift procurement—companies buying premium brand items to reflect their own status, thus raising the brand’s social value.
Example 5: “All in my heels” metaphor—prepping for high-stakes event, investing in brand to boost temporary social signal.
Example 6: Brand-affiliated event attendance – wearing the known brand to show “I am of this circle”.
Example 7: Recruitment marketing – candidates choose premium brands (bags, watches) to show organisational fit for aspirational companies.
Example 8: Social media posting – owning premium brands to show peer group alignment, thus reinforcing social acceptance.
Summary of Point 1: The willingness to pay premium for a brand is grounded in social signalling and status utility—when consumers see the purchase as granting entrance, affiliation or elevated identity, the brand captures value beyond product function.
2. Confidence in superior experience: reliability, durability, and value
When consumers (for example: selecting Converse for children’s schoolwear) perceive a brand delivers superior functional outcomes—“they last long, can withstand multiple washes, stay ready like new”—they see the purchase as worth the premium because it reduces risk and increases confidence.
Business-term: this is perceived quality and brand credibility. The brand’s promise of reliability and consistency reduces the perceived risk of purchase, especially important for higher price points.
The academic literature shows that brand experience (how the consumer interacts with the brand) influences willingness-to-pay (WTP) for a price premium, mediated by brand credibility and perceived uniqueness. ScienceDirect
From a pricing strategy viewpoint: when a brand is associated with durability, reliability, and superior service/experience, it supports value-based pricing rather than cost-plus. “Premium pricing strategy” relies on perceived extra value. Swedge Media
Example 1: Selecting Converse for school kids because experience (everyday wear) meets expectations – less worry, fewer replacements.
Example 2: A corporate client choosing a high-end bag because its durability and service (e.g., repair network) justify higher initial cost.
Example 3: A hardware vendor choosing premium brand components for a critical system – reliability is paramount so paying more makes business sense.
Example 4: A SaaS buyer choosing the enterprise tier because the service experience is smoother, uptime higher – paying more yields confidence.
Example 5: A hotel chain selecting premium mattress brand for guest rooms – improved durability and guest satisfaction justify higher cost.
Example 6: A board-level executive chooses a premium smart device because reliability, service, ecosystem matter more than lowest price.
Example 7: Universities investing in premium lab equipment because reliability reduces downtime—a cost to productivity.
Example 8: Homeschooling parents choosing premium curriculum software because ease of use, updates, support convert into long-term value.
Summary of Point 2: When a brand delivers superior experience—durability, reliability, credible service—it instills purchaser confidence in long-term value; such brands can command premium pricing because consumers believe they will achieve better outcomes for the money.
3. Emotional attachment: memory, identity and heritage
When a brand becomes intertwined with life-moments—such as when your father gave you Chanel No. 5 perfume and you will “forever be connected to the memory”—it’s not just a transaction, it’s an emotional investment. That emotional bond adds delta value to the brand’s equation.
In business terms, this is brand loyalty, brand heritage, and emotional brand affinity. According to one branding statistic: 65 % of U.S. consumers feel emotionally connected to at least one brand—and these emotionally connected consumers are worth 50 % more than highly satisfied customers. Capital One Shopping+1
From strategic brand building: Emotional connection allows the brand to transcend mere utility and become part of a consumer’s identity, narrative, or memory. That helps sustain premium pricing and customer lifetime value. Colling Media+1
Case story: Chanel No. 5
Launched in 1921 by Gabrielle “Coco” Chanel in collaboration with perfumer Ernest Beaux. Wikipedia+1
The “5” was chosen because Chanel considered the number lucky; she selected vial number 5 from ten presented. Wikipedia+1
The bottle design and brand narrative elevated the product beyond a simple fragrance to an icon of modern femininity and luxury. Bookles Blog+1
Because of this legacy, when you receive the perfume as a gift from your father, it doesn't just smell good—it anchors a memory, links you to the brand heritage, and becomes part of your personal story.
Example 1: The perfumed gift becomes a tangible manifestation of personal history (father → daughter) and brand heritage (Chanel legacy).
Example 2: A luxury watch passed down in a family becomes symbolic of legacy and identity, thus consumers are willing to invest.
Example 3: A college alum purchasing branded merchandise that reminds them of their formative years—emotional attachment drives premium spend.
Example 4: A consumer choosing a car brand because their parent drove it and they feel connected—heritage and emotional tie.
Example 5: A business executive selecting a luxury brand watch brand to mark a milestone (promotion, board appointment)—emotional and identity signaling.
Example 6: A non-profit donor choosing a premium donor-recognition piece (e.g., art piece) because of the emotional resonance with the cause and the brand.
Example 7: A global care initiative choosing a premium partner brand because that brand’s heritage aligns with the cause and fosters trust/emotional bond with stakeholders.
Example 8: A lifelong consumer of one brand (say, for education, or products) remains loyal and willing to pay more because of the emotional history and identity composite.
Summary of Point 3: Emotional attachment transforms a brand from a product into a memory, personal narrative and identity signal. That bond underpins sustained willingness to pay premium, increased lifetime value, and deeper brand equity.
Conclusion
Across these three pillars—social acceptance, confidence in superior experience, and emotional attachment—we observe a consistent theme: well-known brands capture value beyond functional benefit. They offer social currency, risk-mitigation and outcome confidence, and emotional resonance. For brand managers and strategic leaders, this has critical implications:
Invest in brand trust, heritage, and reliability as key drivers of premium pricing and customer loyalty.
Recognize that premium pricing is not solely about higher cost or margin—it’s about perceived extra value, whether social, experiential, or emotional.
Align brand strategy with your organizational ecosystem (as you do with your “sheeba’s framework” of Unknown → Learning → Excellence) by exploring new brand signals (curiosity), reinforcing experiences (learning), and cultivating heritage/emotional connection (excellence).
In a leadership context (as you state in your board governance and design-tech integration work), brand equity becomes an intangible asset—one that influences strategic partnerships, governance, ESG positioning, and stakeholder perceptions.
In short: customers pay more when they believe they’re not just buying a product—but buying a signal, an experience, a story. For you, as a leader and designer of business systems, tapping into that insight unlocks both brand differentiation and sustained value creation.
