Sales CRM Terms

What is Price Objection? (Explained With Examples)

What is Price Objection? (Explained With Examples)

What is Price Objection? (Explained With Examples)

Oct 11, 2023

Oct 11, 2023

Table of content
    Table of content
      What is Price Objection? (Explained With Examples)


      What is Price Objection? (Explained With Examples)

      Price objection is a common challenge that businesses face when trying to sell their products or services. It occurs when potential customers express concerns or hesitation about the price of a particular offering. Understanding price objection is essential for businesses to effectively address customer concerns and close sales. In this article, we will explore the concept of price objection in detail and provide examples to help illustrate its impact in various contexts.

      1°) What is Price Objection?

      Price objection refers to the resistance or pushback from customers regarding the price of a product or service. It is a natural reaction that occurs when customers perceive the cost of the offering as too high or not aligned with their perceived value. Price objection can arise from different factors such as budget constraints, comparison to competitive prices, or doubts about the product's quality.

      1.1 - Definition of Price Objection

      In simple terms, price objection is a customer's objection to the price of a product or service. It is a barrier that prevents prospective customers from making a purchase. These objections can occur at any stage of the sales process, from initial contact to negotiation and closing.

      When customers raise price objections, they are essentially expressing their concerns about the value proposition. They question whether the benefits they will receive from the product or service justify the cost. As a result, sales professionals must understand price objection and be prepared to address it effectively.

      1.2 - Advantages of Price Objection

      While price objection can be challenging for businesses, it also presents certain advantages. By understanding and addressing price objections, businesses can:

      1. Gain customer insights: Price objections provide valuable insights into customer perceptions, preferences, and priorities. By understanding why customers object to the price, businesses can tailor their offerings and value propositions to better align with customer needs.

      2. Improve sales strategies: Addressing price objections helps sales professionals refine their strategies and responses. By anticipating common objections and preparing persuasive arguments, sales teams can enhance their effectiveness and overcome customer reluctance.

      3. Build trust and relationships: Successfully addressing price objections demonstrates a commitment to customer satisfaction. By providing clear and compelling explanations, businesses can build trust and establish long-term relationships with customers.

      Additionally, gaining customer insights through price objections can also lead to product or service improvements. By understanding the specific concerns customers have about the price, businesses can make adjustments to enhance the perceived value and address any gaps in the offering. This iterative process of refining the product or service based on customer feedback can result in a more competitive and compelling offering.

      1.3 - Disadvantages of Price Objection

      On the other hand, price objections can also have disadvantages for businesses. Some common disadvantages of price objection include:

      • Profit reduction: If businesses consistently lower prices to accommodate objections, it can have a negative impact on profitability. It is crucial to strike a balance between meeting customer needs and maintaining healthy profit margins.

      • Perception of value erosion: Reacting poorly to price objections or constantly offering discounts can diminish the perceived value of the product or service. This may lead customers to question the quality or uniqueness of what is being offered.

      • Competitive pressures: Price objections can also arise from customers comparing prices with competitors. In highly competitive markets, businesses may need to develop strategies to differentiate their offerings beyond just price.

      Overcoming price objections requires a strategic approach that focuses on value communication and differentiation. Businesses should emphasize the unique features, benefits, and value that their product or service offers compared to competitors. By effectively addressing price objections and highlighting the value proposition, businesses can increase their chances of closing sales and maintaining profitability.

      2°) Examples of Price Objection

      To further illustrate the concept of price objection, let's explore a few examples in different contexts:

      2.1 - Example in a Startup Context

      In the early stages of a startup, price objections are common due to the lack of brand recognition and limited resources. For example, a software startup may face objections from potential customers who perceive the price of their product as high compared to established competitors. To address this, the startup could focus on highlighting the unique features or benefits that differentiate their product, thus justifying the higher price.

      One way a startup could overcome price objections is by offering a limited-time promotional discount. By providing a temporary reduction in price, the startup can entice potential customers to try their product without feeling the full financial burden. This strategy can help the startup gain traction in the market and demonstrate the value of their offering.

      Additionally, startups can leverage their agility and flexibility as selling points. By emphasizing their ability to quickly adapt and customize their product to meet customer needs, startups can position themselves as a more personalized and responsive alternative to larger, more rigid competitors. This differentiation can help justify a higher price point as customers recognize the added value of tailored solutions.

      2.2 - Example in a Consulting Context

      In the consulting industry, price objections often arise as clients compare fees charged by different consulting firms. A consultant may encounter objections from a client who believes that the fees are too high for the services provided. To overcome this objection, the consultant can emphasize their expertise, experience, and the potential return on investment that the client will gain from their services.

      One effective strategy for consultants to address price objections is by offering a tiered pricing structure. By presenting different levels of service with corresponding price points, consultants can provide options that cater to various client budgets and needs. This approach allows clients to choose the level of service that aligns with their expectations and financial capabilities, making the consultant's fees more palatable.

      Furthermore, consultants can showcase their track record of successful projects and client testimonials. By highlighting past achievements and the positive impact their services have had on previous clients, consultants can build trust and credibility, which can help justify their fees. Sharing specific case studies that demonstrate the tangible results achieved through their consulting services can be particularly persuasive in overcoming price objections.

      2.3 - Example in a Digital Marketing Agency Context

      A digital marketing agency may face price objections when potential clients feel uncertain about the effectiveness of various digital marketing tactics. In this scenario, the agency can provide case studies, testimonials, and data-driven evidence to demonstrate the value and ROI their services can deliver. By showcasing successful campaigns and explaining how they align with the client's goals, the agency can justify the price of their services.

      Another effective approach for digital marketing agencies to address price objections is by offering a comprehensive package that includes not only the execution of marketing strategies but also detailed reporting and analysis. By providing clients with transparent insights into the performance of their campaigns and the impact on key metrics such as website traffic, lead generation, and conversion rates, the agency can demonstrate the tangible value they bring to the table.

      Additionally, digital marketing agencies can offer ongoing support and optimization services to ensure that clients achieve long-term success. By emphasizing the agency's commitment to continuously improving and refining marketing strategies based on data and market trends, clients can see the long-term value in investing in the agency's services, thus justifying the price.

      2.4 - Example with Analogies

      Another way to address price objections is through the use of analogies. For instance, a luxury car salesperson may compare their higher-priced vehicle to a high-end smartphone or designer handbag. By drawing comparisons to well-known and accepted luxury items, they can help customers understand the value and craftsmanship that justifies the higher price tag.

      Similarly, a high-end restaurant may explain the higher prices of their dishes by comparing the quality of their ingredients to those used in Michelin-starred establishments. By highlighting the exceptional sourcing and preparation methods, the restaurant can justify the premium pricing and create a perception of exclusivity and superior dining experience.

      Overall, price objection is a common hurdle in sales and customer acquisition. However, by understanding the concept, its advantages, and disadvantages, businesses can develop effective strategies to address customer concerns and successfully close sales. By leveraging examples like the ones provided above, businesses can tailor their approaches to different contexts and engage potential customers in meaningful conversations about value and pricing.

      About the author

      Arnaud Belinga

      Breakcold Youtube Channel

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      What is Customer Retention? (Explained With Examples)
      What is Customer Retention? (Explained With Examples)

      Sales CRM Terms

      What is Customer Retention? (Explained With Examples)

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      What is Dark Social? (Explained With Examples)
      What is Dark Social? (Explained With Examples)

      Sales CRM Terms

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      What is Data Enrichment? (Explained With Examples)
      What is Data Enrichment? (Explained With Examples)

      Sales CRM Terms

      What is Data Enrichment? (Explained With Examples)

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      What is Data Segmentation? (Explained With Examples)
      What is Data Segmentation? (Explained With Examples)

      Sales CRM Terms

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      What is Database Marketing? (Explained With Examples)
      What is Database Marketing? (Explained With Examples)

      Sales CRM Terms

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      What are Decision Criteria? (Explained With Examples)
      What are Decision Criteria? (Explained With Examples)

      Sales CRM Terms

      What are Decision Criteria? (Explained With Examples)

      What is a Decision Maker? (Explained With Examples)
      What is a Decision Maker? (Explained With Examples)
      What is a Decision Maker? (Explained With Examples)

      Sales CRM Terms

      What is a Decision Maker? (Explained With Examples)

      What is a Decision-Making Unit (DMU)? (Explained With Examples)
      What is a Decision-Making Unit (DMU)? (Explained With Examples)
      What is a Decision-Making Unit (DMU)? (Explained With Examples)

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      What is a Decision-Making Unit (DMU)? (Explained With Examples)

      What is Demand Generation? (Explained With Examples)
      What is Demand Generation? (Explained With Examples)
      What is Demand Generation? (Explained With Examples)

      Sales CRM Terms

      What is Demand Generation? (Explained With Examples)

      What is Digital Marketing? (Explained With Examples)
      What is Digital Marketing? (Explained With Examples)
      What is Digital Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Digital Marketing? (Explained With Examples)

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      What is Direct Marketing? (Explained With Examples)
      What is Direct Marketing? (Explained With Examples)

      Sales CRM Terms

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      What is a Discovery Call? (Explained With Examples)
      What is a Discovery Call? (Explained With Examples)

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      What is a Discovery Call? (Explained With Examples)

      What is a Discovery Meeting? (Explained With Examples)
      What is a Discovery Meeting? (Explained With Examples)
      What is a Discovery Meeting? (Explained With Examples)

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      What is a Discovery Meeting? (Explained With Examples)

      What are Discovery Questions? (Explained With Examples)
      What are Discovery Questions? (Explained With Examples)
      What are Discovery Questions? (Explained With Examples)

      Sales CRM Terms

      What are Discovery Questions? (Explained With Examples)

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      What is Door-to-Door Sales? (Explained With Examples)
      What is Door-to-Door Sales? (Explained With Examples)

      Sales CRM Terms

      What is Door-to-Door Sales? (Explained With Examples)

      What is a Drip Campaign? (Explained With Examples)
      What is a Drip Campaign? (Explained With Examples)
      What is a Drip Campaign? (Explained With Examples)

      Sales CRM Terms

      What is a Drip Campaign? (Explained With Examples)

      What is Dunning? (Explained With Examples)
      What is Dunning? (Explained With Examples)
      What is Dunning? (Explained With Examples)

      Sales CRM Terms

      What is Dunning? (Explained With Examples)

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      What is an Early Adopter? (Explained With Examples)
      What is an Early Adopter? (Explained With Examples)

      Sales CRM Terms

      What is an Early Adopter? (Explained With Examples)

      What is Elevator Pitch? (Explained With Examples)
      What is Elevator Pitch? (Explained With Examples)
      What is Elevator Pitch? (Explained With Examples)

      Sales CRM Terms

      What is Elevator Pitch? (Explained With Examples)

      What is Email Hygiene? (Explained With Examples)
      What is Email Hygiene? (Explained With Examples)
      What is Email Hygiene? (Explained With Examples)

      Sales CRM Terms

      What is Email Hygiene? (Explained With Examples)

      What is Email Marketing? (Explained With Examples)
      What is Email Marketing? (Explained With Examples)
      What is Email Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Email Marketing? (Explained With Examples)

      What is Emotional Intelligence Selling? (Explained With Examples)
      What is Emotional Intelligence Selling? (Explained With Examples)
      What is Emotional Intelligence Selling? (Explained With Examples)

      Sales CRM Terms

      What is Emotional Intelligence Selling? (Explained With Examples)

      What is Engagement Marketing? (Explained With Examples)
      What is Engagement Marketing? (Explained With Examples)
      What is Engagement Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Engagement Marketing? (Explained With Examples)

      What is Engagement Rate? (Explained With Examples)
      What is Engagement Rate? (Explained With Examples)
      What is Engagement Rate? (Explained With Examples)

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      What is Engagement Rate? (Explained With Examples)

      What is Engagement Strategy? (Explained With Examples)
      What is Engagement Strategy? (Explained With Examples)
      What is Engagement Strategy? (Explained With Examples)

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      What is Engagement Strategy? (Explained With Examples)

      What is Feature-Benefit Selling? (Explained With Examples)
      What is Feature-Benefit Selling? (Explained With Examples)
      What is Feature-Benefit Selling? (Explained With Examples)

      Sales CRM Terms

      What is Feature-Benefit Selling? (Explained With Examples)

      What is Field Sales? (Explained With Examples)
      What is Field Sales? (Explained With Examples)
      What is Field Sales? (Explained With Examples)

      Sales CRM Terms

      What is Field Sales? (Explained With Examples)

      What is a Follow-Up? (Explained With Examples)
      What is a Follow-Up? (Explained With Examples)
      What is a Follow-Up? (Explained With Examples)

      Sales CRM Terms

      What is a Follow-Up? (Explained With Examples)

      What is Forecast Accuracy? (Explained With Examples)
      What is Forecast Accuracy? (Explained With Examples)
      What is Forecast Accuracy? (Explained With Examples)

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      What is Forecast Accuracy? (Explained With Examples)

      What is a Funnel? (Explained With Examples)
      What is a Funnel? (Explained With Examples)
      What is a Funnel? (Explained With Examples)

      Sales CRM Terms

      What is a Funnel? (Explained With Examples)

      What is Gamification in Sales? (Explained With Examples)
      What is Gamification in Sales? (Explained With Examples)
      What is Gamification in Sales? (Explained With Examples)

      Sales CRM Terms

      What is Gamification in Sales? (Explained With Examples)

      What is Gatekeeper Strategy? (Explained With Examples)
      What is Gatekeeper Strategy? (Explained With Examples)
      What is Gatekeeper Strategy? (Explained With Examples)

      Sales CRM Terms

      What is Gatekeeper Strategy? (Explained With Examples)

      What is Gatekeeper? (Explained With Examples)
      What is Gatekeeper? (Explained With Examples)
      What is Gatekeeper? (Explained With Examples)

      Sales CRM Terms

      What is Gatekeeper? (Explained With Examples)

      What is a Go-to Market Strategy? (Explained With Examples)
      What is a Go-to Market Strategy? (Explained With Examples)
      What is a Go-to Market Strategy? (Explained With Examples)

      Sales CRM Terms

      What is a Go-to Market Strategy? (Explained With Examples)

      What is Growth Hacking? (Explained With Examples)
      What is Growth Hacking? (Explained With Examples)
      What is Growth Hacking? (Explained With Examples)

      Sales CRM Terms

      What is Growth Hacking? (Explained With Examples)

      What is Growth Marketing? (Explained With Examples)
      What is Growth Marketing? (Explained With Examples)
      What is Growth Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Growth Marketing? (Explained With Examples)

      What is Guerrilla Marketing? (Explained With Examples)
      What is Guerrilla Marketing? (Explained With Examples)
      What is Guerrilla Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Guerrilla Marketing? (Explained With Examples)

      What is High-Ticket Sales? (Explained With Examples)
      What is High-Ticket Sales? (Explained With Examples)
      What is High-Ticket Sales? (Explained With Examples)

      Sales CRM Terms

      What is High-Ticket Sales? (Explained With Examples)

      What is Holistic Selling? (Explained With Examples)
      What is Holistic Selling? (Explained With Examples)
      What is Holistic Selling? (Explained With Examples)

      Sales CRM Terms

      What is Holistic Selling? (Explained With Examples)

      What is Ideal Customer Profile (ICP)? (Explained With Examples)
      What is Ideal Customer Profile (ICP)? (Explained With Examples)
      What is Ideal Customer Profile (ICP)? (Explained With Examples)

      Sales CRM Terms

      What is Ideal Customer Profile (ICP)? (Explained With Examples)

      What is Inbound Lead Generation? (Explained With Examples)
      What is Inbound Lead Generation? (Explained With Examples)
      What is Inbound Lead Generation? (Explained With Examples)

      Sales CRM Terms

      What is Inbound Lead Generation? (Explained With Examples)

      What is an Inbound Lead? (Explained With Examples)
      What is an Inbound Lead? (Explained With Examples)
      What is an Inbound Lead? (Explained With Examples)

      Sales CRM Terms

      What is an Inbound Lead? (Explained With Examples)

      What is Inbound Marketing? (Explained With Examples)
      What is Inbound Marketing? (Explained With Examples)
      What is Inbound Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Inbound Marketing? (Explained With Examples)

      What is Inbound Sales? (Explained With Examples)
      What is Inbound Sales? (Explained With Examples)
      What is Inbound Sales? (Explained With Examples)

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      What is Inbound Sales? (Explained With Examples)

      What is Influencer Marketing? (Explained With Examples)
      What is Influencer Marketing? (Explained With Examples)
      What is Influencer Marketing? (Explained With Examples)

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      What is Influencer Marketing? (Explained With Examples)

      What is Inside Sales Representative? (Explained With Examples)
      What is Inside Sales Representative? (Explained With Examples)
      What is Inside Sales Representative? (Explained With Examples)

      Sales CRM Terms

      What is Inside Sales Representative? (Explained With Examples)

      What is Inside Sales? (Explained With Examples)
      What is Inside Sales? (Explained With Examples)
      What is Inside Sales? (Explained With Examples)

      Sales CRM Terms

      What is Inside Sales? (Explained With Examples)

      What is Insight Selling? (Explained With Examples)
      What is Insight Selling? (Explained With Examples)
      What is Insight Selling? (Explained With Examples)

      Sales CRM Terms

      What is Insight Selling? (Explained With Examples)

      What is a Key Account? (Explained With Examples)
      What is a Key Account? (Explained With Examples)
      What is a Key Account? (Explained With Examples)

      Sales CRM Terms

      What is a Key Account? (Explained With Examples)

      What is a Key Performance Indicator (KPI)? (Explained With Examples)
      What is a Key Performance Indicator (KPI)? (Explained With Examples)
      What is a Key Performance Indicator (KPI)? (Explained With Examples)

      Sales CRM Terms

      What is a Key Performance Indicator (KPI)? (Explained With Examples)

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      What is a Landing Page? (Explained With Examples)
      What is a Landing Page? (Explained With Examples)

      Sales CRM Terms

      What is a Landing Page? (Explained With Examples)

      What is Lead Database? (Explained With Examples)
      What is Lead Database? (Explained With Examples)
      What is Lead Database? (Explained With Examples)

      Sales CRM Terms

      What is Lead Database? (Explained With Examples)

      What is a Lead Enrichment? (Explained With Examples)
      What is a Lead Enrichment? (Explained With Examples)
      What is a Lead Enrichment? (Explained With Examples)

      Sales CRM Terms

      What is a Lead Enrichment? (Explained With Examples)

      What is Lead Generation? (Explained With Examples)
      What is Lead Generation? (Explained With Examples)
      What is Lead Generation? (Explained With Examples)

      Sales CRM Terms

      What is Lead Generation? (Explained With Examples)

      What is Lead Nurturing? (Explained With Examples)
      What is Lead Nurturing? (Explained With Examples)
      What is Lead Nurturing? (Explained With Examples)

      Sales CRM Terms

      What is Lead Nurturing? (Explained With Examples)

      What is Lead Qualification? (Explained With Examples)
      What is Lead Qualification? (Explained With Examples)
      What is Lead Qualification? (Explained With Examples)

      Sales CRM Terms

      What is Lead Qualification? (Explained With Examples)

      What is Lead Scoring? (Explained With Examples)
      What is Lead Scoring? (Explained With Examples)
      What is Lead Scoring? (Explained With Examples)

      Sales CRM Terms

      What is Lead Scoring? (Explained With Examples)

      What are LinkedIn InMails? (Explained With Examples)
      What are LinkedIn InMails? (Explained With Examples)
      What are LinkedIn InMails? (Explained With Examples)

      Sales CRM Terms

      What are LinkedIn InMails? (Explained With Examples)

      What is LinkedIn Sales Navigator? (Explained With Examples)
      What is LinkedIn Sales Navigator? (Explained With Examples)
      What is LinkedIn Sales Navigator? (Explained With Examples)

      Sales CRM Terms

      What is LinkedIn Sales Navigator? (Explained With Examples)

      What is Lost Opportunity? (Explained With Examples)
      What is Lost Opportunity? (Explained With Examples)
      What is Lost Opportunity? (Explained With Examples)

      Sales CRM Terms

      What is Lost Opportunity? (Explained With Examples)

      What is Market Positioning? (Explained With Examples)
      What is Market Positioning? (Explained With Examples)
      What is Market Positioning? (Explained With Examples)

      Sales CRM Terms

      What is Market Positioning? (Explained With Examples)

      What is Market Research? (Explained With Examples)
      What is Market Research? (Explained With Examples)
      What is Market Research? (Explained With Examples)

      Sales CRM Terms

      What is Market Research? (Explained With Examples)

      What is Market Segmentation? (Explained With Examples)
      What is Market Segmentation? (Explained With Examples)