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Veblen Products
Most products follow a simple rule. Lower the price and more people buy. But some products break that rule entirely.
A Veblen Product gets more attractive as the price goes up. The high price is not a problem to overcome. That is the whole point. Buyers want it because it costs more, not in spite of it.
This is not irrational. The logic just works differently. For some buyers, the price tag is the message. Price says something about who they are, what they value, and how others will see them. So if you sell anything at the premium end, understanding Veblen Products will change how you think about pricing and positioning.
What Is a Veblen Product?
A Veblen Product is one where demand goes up as the price goes up. This is the opposite of how most products work.
The term comes from the economist Thorstein Veblen, who wrote about what he called conspicuous consumption. The idea is simple. Wealthy buyers sometimes buy expensive things not because those things work better, but because owning them signals status. The price becomes a badge.
Think of a luxury watch, a high-end sports car, or a designer handbag. These things often cost many times more than a product that does the same job. But that gap in price is exactly what makes them desirable. Lower the price and you destroy the appeal. You make the product ordinary.
So a Veblen Product is not just expensive. Expensive is the strategy, because the price itself is what gives it meaning.
Why Do Veblen Products Work?
Buyers do not just buy things. They buy what those things say about them. This is true across almost every market, but it is most visible at the top end.
When a price is very high, buyers make several assumptions. They assume the quality is exceptional. Not everyone can afford it. And owning it places them in a certain group. All three of those assumptions feel good, so the high price does not put them off. That feeling is actually part of the draw.
There is also a scarcity effect at play. Because fewer people can buy it, the product feels more rare and more special. That exclusivity adds to the desire. In fact, making a Veblen Product too affordable would break the spell entirely.
Finally, there is social proof working in reverse. Instead of thinking “everyone buys this so it must be good,” the buyer thinks “almost no one can have this, so having it means something.” That is a powerful position for any product or service to hold.
How Can You Use Veblen Products In Sales?
Price With Confidence
If you cut your price to win deals, you might be doing the opposite of what works. For premium buyers, a low price can trigger doubt. It makes them wonder what is wrong with it. So instead of apologising for your price, own it. Present it with confidence and explain what sits behind it.
Make Exclusivity Part of the Message
Veblen logic only works when the product feels scarce or hard to access. So use language that reinforces that. Talk about who you work with, and be clear about who you do not. Let buyers feel that being your client means something.
Let the Price Signal Quality
Buyers who have never heard of you will use your price as a proxy for quality. A high price says “this is serious.” Premium buyers can walk away if the price feels too low, before you even get to explain what you do. Therefore, set your price to match the positioning you want, not just the cost of delivery.
Sell to Status, Not Just Function
For Veblen buyers, the functional benefits are almost secondary. What matters is how the purchase makes them look and feel. So in your messaging, include the social gain. Consider what working with you says about them, who else you work with, and what being your client signals to others.
When Veblen Products Work Best
The Veblen effect works best when buyers care about status, image, or how others perceive them. This is common in luxury goods, high-end services, premium consulting, and anything sold to buyers who see their purchases as a reflection of who they are.
It also works well when your market has a clear upper tier. If some buyers will pay a lot more for the best, positioning yourself at the top pulls those buyers toward you. They are not shopping on price. Status is what drives the decision.
Similarly, Veblen logic applies when the buyer is choosing on behalf of others. A CEO picking a law firm or a consultant wants a name that looks right to their board. The prestige of the choice matters, so a higher price backed by the right names becomes a safer and more attractive option.
When Veblen Products Become Dangerous
The Veblen effect only works in markets where status matters. If you sell to buyers who purely care about function and value for money, a high price without clear justification will just cost you the deal.
Problems also arise when quality does not match the price. Veblen Products survive on perception. But if buyers feel the product does not live up to what the price implies, trust collapses fast. Word spreads quickly, and the premium positioning falls apart.
Another risk is pricing yourself out of a market you actually belong in. Not every service suits Veblen positioning. If your buyers are mid-market or price-sensitive, trying to apply this logic will leave you with no buyers at all. Knowing your buyer comes before choosing this strategy.
Common Veblen Products Mistakes
Discounting to Win
Cutting price to close a premium buyer can backfire. It signals that the price was not real, and removes the status signal the buyer was drawn to. Instead, hold the price and work on the proof and positioning that supports it.
Forgetting the Badge Value
Sellers sometimes focus only on features and outcomes. But Veblen buyers also want to know what the purchase says about them. So make sure your messaging speaks to identity, not just results.
Applying It to the Wrong Market
Not every buyer responds to Veblen logic. Using a prestige pricing model with a cost-focused buyer will just lose the sale. Know who you are selling to before you build your pricing strategy around status.
Making It Too Accessible
Running promotions, offering trials, or broadening access too far can undermine the exclusivity that makes a Veblen Product desirable. If everyone can get it, it stops being special. Guard the scarcity carefully.
Veblen Products – An Example
A business consultant charges £500 a day and struggles to fill her diary. On a whim, she raises her day rate to £2,500. Suddenly, she starts getting more enquiries, not fewer.
Buyers at that level are not price-sensitive in the same way. A different question drives them. Rather than asking “can I afford this?” they ask “is this the right person for me?” Her higher price answers that question. She comes across as in demand, selective, and serious, so the price does part of the selling for her.
She also starts turning some work away, which she mentions naturally in calls. That scarcity reinforces the perception further. As a result, the higher price creates more desire, not less.
See also:
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- The luxury version
