This is a great thread, it's fascinating to read the responses.
I started dressing better a few years ago. I started noticing other men who just looked put together, and realized that I wasn't one of them. They stood out, they looked effortless, and the looked a lot better than I did. It all started with a desire to just do something basic, dressing myself, better than I had been. In retrospect, it was a similar to when I decided I needed to start learning to cook, manage my finances with more forethought, and generally just be a better man.
I currently dress more formally than my job requires, and a big part of the process has been learning just how much to do that so that it looks comfortable and put together and not like a costume. This means suits for meetings with clients, but generally with a little more character the accompanying pieces than CBD would generally present. It means well fitting wool trousers and sport coats for "in office" days, occasionally with a knit tie. It means jeans and chinos on the weekend, but always paying attention to fit, color and texture. And of course better made shoes.
I dress to be taken more seriously at work, to be seen as more attractive in general, and to enjoy the feel of well made clothing that fits well and is appropriate to whatever activity I'm going to be taking part in.
When I started dressing better I got more positive attention from everyone; at work, on the street, anywhere I went. I'm not too shallow to admit that it was a big ego boost when I realized that I was getting chatted up by ladies more often. That was all the positive encouragement I needed to keep going.
It all started as something of an experiment, and now it's just something that I love.