The Counterintuitive Truth About Premium Markets
Let me share my keyboard business story. At 21, I convinced a German manufacturer to make 50,000 custom keyboards. My orders? Just five. Not five thousand. Just five.
The smart move would have been to compete on price—make them cheaper and faster. I took a bold step that would shock any MBA professor: I sold premium, handcrafted keyboards instead of cheap rubber membrane ones.
Beautiful keys. Professional look. Quality materials. And here’s the kicker—people loved them. They sold quickly because I didn’t aim to be the cheapest; I aimed to be the best.
Why Premium Positioning Is Your Secret Weapon
Two decades with brands, from Cartier to corner shops, taught me that premium markets go beyond just higher prices, even if that’s nice. They involve a different game with different rules.
In commodity markets, you take prices as they come. In premium markets, you set prices. In commodity markets, customers shop around endlessly. They come to you in premium markets—often with checkbooks in hand.
In my work with luxury brands, I found that the main priority was brand protection, not competing on price. They were distant from the commodity game. Their main worry was counterfeiters copying their success. That’s a nice problem to have.
The Four Pillars of Premium Market Entry
1. Authority Positioning You can’t charge premium prices without being an expert. This isn’t about fancy offices or expensive suits. It’s about being the recognized authority in your field. When I led search engine marketing in London, I didn’t just provide SEO services. I chair the Internet Advertising Bureau Search Council, where I set industry standards.
2. Scarcity Psychology Premium customers don’t want what everyone else can easily get. They crave exclusivity, and limited availability makes them feel special. One French fashion executive told me, “If our brand were easy to find, our prices would drop. Being exclusive is key.”
3. Value-Based Pricing: Many get this wrong. They think premium pricing means adding 20% to current prices. Wrong. It means knowing some customers will pay 10X more for the right solution to their real problem. Clients pay £50,000 a week because the value is worth millions to their business.
4. White-Glove Experience: Premium goes beyond the product. It covers everything—from the first interaction to the final delivery. It’s about making customers feel like VIPs, not just transaction numbers.
The Premium Customer Revelation
Surprisingly, premium customers can be easier to handle than bargain hunters. They understand value. They don’t nickel-and-dime you. They stick around, pay on time, and refer other premium customers.
I learned how to clean cars as a teen. Customers who paid for premium service liked it when I respected their choices and showed up on time. They gave me their numbers and recommended me to neighbors. They became clients, not just customers.
The penny-pinchers? They shopped around every week for someone cheaper.
The Migration Strategy
You can’t flip a switch to become a premium brand. But you can start the migration now:
Start with your messaging. Stop saying you’re “affordable” or have “competitive pricing.” Talk about quality, expertise, and results.
Identify your premium cohort. Look at your current customers. Who pays the most? Who complains the least? Who refers others? These are your premium customers in disguise.
Test premium offerings. Create a high-end version of your current service. Price it high. See what happens. You might be surprised.
Develop premium credentials. Write that book. Speak at conferences. Get quoted in the press. Build authority that justifies premium positioning.
The Luxury Lesson from Lloyds Bank
When I worked with Lloyds Bank on invoice factoring, we didn’t call every small business. We focused on companies that valued expertise more than price. They needed solutions, not just services.
The result?
- Higher conversion rates
- Better client relationships
- Premium fees that justify our white-glove service.
Your Premium Future Starts Now
The irony is that while others race to the bottom, the top gets less crowded daily. There’s never been a better time to position yourself as the premium choice in your market.
Stop competing on price. Start competing on value, expertise, and experience. Your future self—and your bank account—will thank you.
The premium market isn’t just about making more money (though that’s a welcome side effect). It’s about building a business you’re proud of. Work with clients who value your efforts. Create something lasting.
But First, Find Your Premium Sweet Spot
Before you start slapping premium prices on everything like an overzealous antique dealer, most entrepreneurs skip one crucial step: discovering where your premium opportunities hide.
What is the difference between my keyboard success and my near-bankruptcy moments? I learned to identify markets primed for premium positioning versus those destined for price wars.
My Market Discovery Techniques Guide reveals the exact research methods I use to uncover these premium goldmines. Charging premium prices in a commodity market is like wearing a tuxedo to a mud wrestling match: technically possible but spectacularly misguided.
