Are You Buying It Back?

“We’re gonna need a big discount…” declared the prospect.

“What? Why?” reacted the salesperson, clearly surprised.

“In the demo, you showed us a lot of stuff we’ll never use, and we don’t want to pay for capabilities that we won’t use, so either remove those capabilities or cut the price.” stated the prospect.

“But they represent more value…!” the salesperson replied.

“Not for us.” was the prospect’s response, “I’d say we’ll use about thirty percent of what you showed in the demo, so we’ll expect a seventy percent discount.”

The salesperson’s jaw worked wordlessly, and then said, “I’ll see what I can do…”

The deal did close, and the prospect did enjoy a substantial discount.

Frighteningly, the original meeting was scheduled for two hours but was trimmed to ninety minutes due to another commitment by the prospect. I wonder what the discount would have been if we had used the full two hours!

I remember this story very well, because I was part of the vendor team. In fact, I was the one who presented the demo!

This unforced discounting is known as “Buying It Back” and it is counterintuitive for most people.

After all, the value of your software increases with the number of capabilities included, right?  Nope – the value of your software is based on the prospect’s perceptions of what they’ll use and the nature of the solution it delivers.

In a demo, the more capabilities you show that your prospect doesn’t need, the more you are at risk of Buying It Back.