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👋 Hello fellow Ladderers!

This week I’m going to pretend I haven’t been AWOL for sometime, if that’s OK with you 🙂 - and take you through the powerful, but racked with potential pitfalls, psychological hack of Costly Signalling.

But first, we’re going hit all the News, killer How-To Guides, LinkedIn Treats and Tools to you simply cannot miss this week.

I hope you enjoy.

Welcome to the jungle we got fun and games,

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🔗 The Best Bits of LinkedIn This Week

• Exactly how to make ‘FREE’ even more attractive and work for you 🤑 

• How to get free of short-term ROAS stat-hustle and focus on incremental profit growth 📈 

• The Bible as we know it for strategic planning: The JWT Guide To Planning, broken down into the 5 key lessons ✝️ 

🗞️ Extra, Extra, Click All About It!

• 🤖 OpenAI introduces AI agent tools with its new Responses API designed to help businesses streamline efficiency and build smarter workflow.

• 🔍 The $350k job that's replacing "growth hackers".

• 🦠 Mucinex mascot Mr. Mucus lands on Tinder to give consumers the ick.

• 📦️ Amazon tried to make shopping social. Here's why it didn’t click.

• 📉 Sh*tshow. Advertisers expect ad spend slowdown amid tariff uncertainty.

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• 📨 ShortWave.com - Easily the best AI driven email inbox experience I’ve ever used. By Bye Superhuman.

• 💬 WisprFlow.ai - Voice-powered dictation that works across apps, handling punctuation and formatting in real time.

• 📸 Reveals.app - Turn your product photos into videos. Simply upload a product shot, choose a preset, and produce attention-grabbing videos.

Watches In Space and Ancient Oak Barrels:

The Power of Costly Signalling

⏱️ ~ 8 minutes 15 seconds read

A lone craftsman in a candlelit Swiss workshop meticulously assembles a timepiece using tools that haven’t changed since the Renaissance. The narrator’s voice, impossibly deep and wise, whispers about precision engineering and generational craftsmanship. For no apparent reason, we transition to a oddly chiseled middle-aged man emerging from below deck of what we assume to be his yacht. He pushes his too-long-to-be-working-a-corporate-job hair back as he surveys the horizon, his watch gleans with beads from the ocean spray.

You’re not just watching an ad—you’re witnessing a performance. And here’s the kicker: this whole spectacle isn’t really about the product. It’s all about signalling cost. The time, effort, and sheer absurdity of the production process serve one purpose—to make you believe that this watch (or whiskey, or handbag, or artisanal free-range yak milk) is worth the price.

This is costly signalling, a psychological hack that makes customers perceive something as more valuable simply because they know it wasn’t cheap or easy to produce. And it works across industries, from ultra-luxury goods to mass-market brands that want to punch above their weight.

Why This Matters to You

In this article, we’re going to unpack:

1. Why costly signalling makes products seem more desirable (even when logic says otherwise).

2. The cognitive biases that make customers fall for it, time and time again.

3. How brands—from Apple to Red Bull to Salesforce—use costly signaling to command higher prices, create brand obsession, and dominate their industries.

So, let’s peel back the velvet curtain on this psychological hack and see how you can put it to work.

THE POWER OF COSTLY SIGNALLING - WHY EXPENSIVE IS BETTER 🤩 

Luxury brands have known it forever, but psychology backs it up: People value things more when they believe they should be valuable. And one of the easiest ways to convince them? Make the product look costly—whether through materials, effort, exclusivity, or even just storytelling.

At its core, costly signalling is about proving worth through visible expense. It’s why a Rolex isn’t just a watch—it’s a demonstration of engineering hours, rare materials, and generational prestige. It’s why brands with absurdly impractical processes—like whiskey aged on a boat for “gentle rocking maturation” (yes, that’s a real thing)—command higher prices.

Why This Works (Even When It Shouldn’t)

There are a few key cognitive biases at play here, making costly signaling a psychological goldmine for marketers:

• Effort Justification – The harder something seems to produce, the more valuable we assume it is. (If a watch takes a year to assemble, surely it’s superior to the one made in a day, right?)

• Transparency Bias – When brands openly share their process and expenses, customers see them as more authentic and trustworthy. (Even if that "hand-harvested Himalayan salt" claim is slightly exaggerated.)

• Endowment Effect – The more customers know about a product’s creation, the more they feel connected to it—and the more they’re willing to pay.

Costly Signalling Goes Beyond the Product

It’s not just the product itself that can signal status—it’s also how it’s advertised. The mere act of running an ad in an expensive, high-visibility channel sends a signal of prestige and dominance.

• Super Bowl ads – A 30-second spot costs millions, and brands like Rolex, Apple, and luxury automakers don’t just advertise during the game for visibility—it’s a flex that says, we can afford to be here.

• Massive billboards in prime locations – Coca-Cola doesn’t need a Times Square billboard to sell more soft drink, but owning that real estate is a power move.

• Premium print magazines – Placing an ad in Vogue or The New York Times Sunday edition isn’t just about readership; it’s about being seen in the right context.

In short, costly signalling isn’t just about what you sell—it’s also about where and how you show it off. And as we’ll see next, the best brands in the world have turned this principle into an art form.

COSTLY SIGNALLING IN ACTION - FOUR BRANDS THAT NAIL IT 💎 

Some brands whisper exclusivity. Others shove it in your face. Either way, costly signalling is about making sure the world sees the price—whether in money, effort, or sheer spectacle. Let’s look at four brands that have turned costly signalling into an art form.

Red Bull – The Brand That Fell from Space 🛰️ 

Most brands launch ad campaigns. Red Bull literally launched a man from the stratosphere. In 2012, Austrian skydiver Felix Baumgartner jumped 24 miles from space as part of Red Bull Stratos, setting records and securing Red Bull’s place as the brand for pushing human limits.

This wasn’t just an expensive stunt—it was the ultimate costly signal. No one buys an energy drink for nutritional value; they buy into a mindset. By funding extreme events—from cliff diving to air races—Red Bull shows, rather than tells, that they are the brand for high-risk, high-reward living.

Apple – The Luxury is in the Box 🍏 

Apple doesn’t just sell devices—it sells an experience. From the moment you peel open the lid of an iPhone box, you know you’ve bought something premium. The unboxing process is slow, deliberate, and engineered to feel luxurious.

What’s wild? That packaging alone costs Apple nearly five times more than typical tech brands spend. They invest heavily in materials, magnetic closures, and that signature “slow lift” effect. This isn’t about function—it’s about costly signaling. By making the packaging feel expensive, Apple subtly convinces customers that the product inside is worth every penny.

Louis Vuitton – If You Can’t Sell It, Burn It 👜 

Most brands discount unsold products. Louis Vuitton sets them on fire. No, really—LV is known for destroying excess inventory rather than putting items on sale. Why? Because discounts kill luxury. If customers can buy a $5,000 bag for $2,000 at an outlet, they start questioning its worth.

By making their products scarce—even artificially—Louis Vuitton reinforces the perception that their bags are exclusive, high-status items. The logic is simple: you don’t just buy an LV bag—you prove you belong in a world where paying full price is the only option.

Salesforce – The Corporate Coachella 🎤 

Tech conferences are usually dull affairs—PowerPoint slides, stale coffee, and free pens no one wants. Not if Salesforce has anything to say about it.

Dreamforce, the company’s annual event, is less a business conference and more a corporate Coachella. Think U2 concerts, celebrity speakers, and entire city blocks taken over by Salesforce branding. The message? Salesforce isn’t just another SaaS platform—it’s a billion-dollar juggernaut that can afford to throw a party bigger than your annual revenue.

The sheer extravagance of Dreamforce is a costly signal aimed at enterprise customers. If Salesforce can drop millions on a four-day event, imagine how powerful their software must be.

HOW TO APPLY COSTLY SIGNALLING INTO MARKETING (WITHOUT TORCHING YOUR STOCK) 📝 

So, you’re sold on the power of costly signalling. But before you start hand-carving your logo into solid gold or launching a $15 million ad campaign, there’s one crucial rule:

A private members-only lounge at an airport? Luxury travellers see that as an exclusive, high-status experience. A members-only lounge at a petrol station? That’s just weird. The signal only works if your audience recognises it as costly.

With that in mind, here are practical ways to use costly signalling in your marketing—whether you’re selling high-end watches, software or chainsaws.

1. Make Your Effort Visible 👀 

Customers value things more when they can see the effort behind them. If you use premium materials, an intricate production process, or industry-leading expertise—show it.

• High-end restaurants show off their open kitchens because watching a chef torch a wagyu steak screams “effort.”

• Patagonia highlights its sustainable materials and ethical labor because eco-conscious buyers value that kind of cost.

• Craft breweries showcase their small-batch, slow-aged processes because beer nerds love that level of dedication.

2. Design Premium Experiences 🎁 

Apple’s unboxing isn’t just packaging—it’s a ritual. The slow lift of the lid, the way everything fits perfectly, even the texture of the paper—it all screams luxury before you even touch the device.

For your brand, this could mean:
✔️ Investing in packaging that feels premium (not just looks good).
✔️ Creating a VIP purchase experience—think handwritten notes, premium customer support, or surprise gifts.
✔️ Making your service onboarding so smooth that it feels exclusive.

3. Advertise Like a Market Leader 🥇 

If you want to look dominant, act dominant. Even the advertising medium itself is a costly signal.

• Super Bowl ads, billboards in prime locations, and prestige magazine placements tell customers: we are big enough to afford this.

• High-production video campaigns, celebrity endorsements, or luxury brand collaborations create an aura of success and quality.

• Even digital brands can flex—running premium display ads instead of low-budget Facebook carousels signals you’re playing in the big leagues.

4. Create Exclusivity (But Be Smart About It) 🫅 

People want what they can’t have. But be careful—exclusivity only works when it’s desirable, not just frustrating.

• Hype-driven brands like Supreme use limited drops to create a feeding frenzy.

• High-end memberships (like Amex’s Centurion Card) make customers feel like they’re part of an elite club.

• Even budget brands can do this—Trader Joe’s limited seasonal items create scarcity-driven demand.

5. Align Your Signal With the Right Audience 🎯 

If your costly signal doesn’t land with your target audience, you’re just setting money on fire.

• A law firm spending millions on TikTok influencers? That won’t signal success to corporate clients.

• A luxury brand using cheap influencers? That undermines the exclusivity.

• A mass-market brand flexing an extravagant ad campaign during a recession? That’s a PR disaster waiting to happen.

Context matters. If you’re selling to a high-end audience, expensive print ads in The Financial Times or an invite-only product launch might work. If your customers value craftsmanship, a documentary on your production process could be the flex they appreciate.

The key is signalling the right costly effort for your market.

DOUBLE-COSTLY: WHEN IT ALL GOES WRONG AND HOW TO AVOID IT 🔥 

Costly signalling is a powerful tool—until it isn’t. When done well, it makes brands look prestigious, high-quality, or dominant. When done poorly, it makes them look out of touch, wasteful, ingenuous or worse, deeply annoying.

Here’s when costly signalling goes sideways—and how to keep your brand from becoming that brand that steels the Marketing Week headlines for a months straight, in a bad way.

1. Fake Effort = Real Backlash

Customers love brands that showcase their hard work—but only if it’s real. If your “cutting-edge” technology turns out to be smoke and mirrors, expect a PR disaster.

🔴 Example Fail: Volkswagen’s Clean Diesel campaign was a masterclass in luxury signalling. The brand positioned its diesel engines as an advanced, eco-friendly alternative to hybrids—combining power with sustainability. Customers paid a premium for this supposed innovation. Then came the scandal: Volkswagen had rigged emissions tests, and their “clean” engines were spewing illegal levels of pollution. It was the marketing equivalent of wrapping a coal plant in a Tiffany’s box.

✅ Fix: If you claim something is expensive or difficult to produce, make sure it actually is. Consumers are more skeptical than ever, and a single exposé can destroy years of costly branding.

2. Too Much Exclusivity = Customers Walk Away

People want what they can’t have—until they realise it’s not actually worth having.

🔴 Example Fail: The American Express Black Card was once the ultimate symbol of exclusivity. Urban legends swirled about unlimited spending power, secret concierge services, and a membership so elite it could buy access to anything. The problem? When people finally got their hands on one, they realised it wasn’t that much better than Amex’s existing premium cards. The mystery was the magic—once removed, it lost some of its shine.

✅ Fix: If you use exclusivity as a signal, you MUST deliver extraordinary —not underwhelming. Make sure what’s behind the velvet rope is actually worth the hype.

3. Excess Can Feel Disrespectful (Especially in Tough Times)

There’s a fine line between aspirational and tone-deaf. Flashing extreme wealth while your audience is struggling can make them resent—not admire—you.

🔴 Example Fail: In January 2023, Tarte Cosmetics flew 50 influencers on a lavish, all-expenses-paid trip to Dubai, complete with first-class flights, luxury resorts, and extravagant parties—all while many consumers were grappling with rising inflation and a cost-of-living crisis. Rather than sparking envy, the trip drew immediate criticism, with audiences labelling the campaign “tone-deaf” and “unrelatable” amid widespread financial hardship.

✅ Fix: Know your context. In economically challenging times, brands should highlight empathy, connection, and value—not extravagance. Showing sensitivity to your audience’s realities builds loyalty instead of resentment.

FINAL THOUGHTS: YOU DON’T NEED TO BE BALENCIAGA 😀 

It’s easy to think costly signalling is just for luxury brands, billionaire-backed tech companies, or energy drink moguls with a habit of throwing people out of airplanes.

The truth is, any brand—at any price point—can use the psychology behind costly signalling to create stronger perceptions of value.

The key isn’t to simply spend more; it’s to spend strategically in ways that your audience recognises as valuable. Trader Joe’s creates exclusivity with limited product drops without burning unsold stock or renting a Dubai resort.

So, before you go plotting your brand’s space jump, ask yourself:

• What effort goes into my product or service that my customers would appreciate if they saw it?

• How can I make my brand’s experience feel more premium—even if it’s not luxury-priced?

• Is my costly signal reinforcing what my brand truly stands for, or am I just spending for the sake of it?

Costly signalling isn’t about what you spend—it’s about what you make people believe you value as a brand. Get it right, and your brand won’t just be seen—it’ll be remembered.

I hope you enjoyed our exploration of costly signalling and how you can put it to work.

This weeks provocations:

• What parts of your product, service, or brand already require significant effort, skill, or investment—and how can you showcase that more effectively to your audience?

• Are you using advertising and marketing channels that signal your brand’s value to the right audience, or could your placements be sending the wrong message?

• How can you create an experience—whether through packaging, events, exclusivity, or storytelling—that makes your product feel more premium or desirable?

• Is your use of costly signalling aligned with your brand’s values and target customers, or are you at risk of looking out of touch or wasteful?

Hit reply, I’d love to hear your thoughts.

If you enjoyed this edition, please forward it to a friend who’s looking to level-up their behavioural psychology game - they’ll love you for it (and I will too) ⏭️ 💌

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