Are you Buying It Back?

Have you ever been in a situation where your prospect said, “In your demo, you showed us a bunch of stuff that 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…”  Sadly, you can’t just “slice out” the features and functions they won’t use, so you have to give a discount to get the business.

This 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.

Wants and Needs

In a traditional demo – and, in principle, any demo done without prior discovery – each capability you show will fall into one of the following categories:

  • Must have;
  • Nice to have;
  • Neutral;
  • Don’t need it;
  • Really don’t need it.

The “must have” and “nice to have” capabilities are all great – and should become the Specific Capabilities desired by the prospect.  But what about “Neutral”, “Don’t need it”, and “Really don’t need it”?  Each time your prospect sees one of these in your demo they think, “Well, I don’t need that – and I don’t want to pay for it.”

And since they have just seen these demonstrated, they know that they will be paying for these features as part of the license fee.  One or two small capabilities isn’t much of a concern – but when their perception grows to where there are several or many features that they won’t use – especially capabilities that are positioned during the demo by the vendor as particularly important or high-value – then prospects get concerned.

They wonder, “Why should I have to pay for all of these if I’m not going to use them?”  And when it is time to negotiate the price and license fees, your prospect says, “You know, you showed us a lot of capabilities that we’ll never use – so you need to reduce your price accordingly.  We don’t expect to pay for things we won’t use.”

As noted above, most vendors believe that, “The more capabilities; the more value…”  This has been part of the reason vendors traditionally try to pack as many features and functions into demos as possible – they believe that by showing more and more, the perceived value of their software should similarly increase.

This is one (of many reasons) why traditional “overview” and “end-to-end” demos – also known as stunningly awful Harbor Tours – put you at risk.

An Example

Human Capital Management software is a hotly contested space with many vendors who often present a “hire-to-fire” demo, showing how to:

  • Open new hire requests
  • Create and post job descriptions
  • Review applicant resumes
  • Extend offers
  • Onboard new hires
  • Manage certifications
  • Assess employees’ skills
  • Provide and track ongoing development
  • Execute and track performance reviews
  • Identify high performers
  • Implement succession plans
  • Establish workflows and approvals
  • Communicate internally
  • Manage time and PTO tracking
  • Track employee satisfaction
  • Offboard employees
  • And more…

Further, many of these vendors’ packages are monoliths – you get everything, even if you don’t need it.

Now imagine that you are the prospect watching this demo and you only need or want ¾ of the functionality presented.  The salesperson has stated an annual price of $144K, based on the size of your organization of 120 users at $100 per month.  You would arrive at two conclusions:

  1. This is way more than you need;
  2. You don’t want to pay for the capabilities you won’t use.

Based on this, how much would you be willing to pay on an annual basis?  (Hint:  ¾ of $144K is $108K).  The vendor’s price is based on the full suite of capabilities but you will only use 75% – your argument is irrefutable…!  The vendor just lost $36K by Buying It Back.

In the world of video and movies they say, “If the camera doesn’t see it, then it didn’t happen…”  Interestingly, the same is true for demos.  If the prospect isn’t shown capabilities, they don’t exist – at least in their minds.

Clearly, this is one of the most important objectives of doing discovery:  to understand the Specific Capabilities needed and desired by the prospect.  This gives you the list of what should be presented in a demo – and the list of capabilities to ignore and leave out.

It Gets Worse

The mindset for many demo presenters often compounds the problem and increases the risk of Buying It Back.  I frequently hear presenters say at the beginning of a demo, “Stop me if you have any questions – I want to make this interactive…”  But they don’t really mean it!

What is going on in the mind of the presenter is often a different reality – the presenter is thinking, “Please don’t ask any questions – because if you do, I won’t have time to get through all of the content I want to show…”  These demos are typified by truly awful talk-to-listen ratios and infrequent speaker switches.

This mindset of “show as much as possible” results in some of the worst Buying It Back experiences.

Differentiating?

Many sales and presales teams are taught to present their “competitive differentiators” in their demos.  In the absence of doing sufficient discovery, your differentiators may actually be negative differentiators!

If you present a key, differentiating capability that your prospect needs, that’s a good thing.  But what if your prospect doesn’t want that capability?  Well, you’ve just differentiated negatively and added that key capability to the Buying It Back list.

Sadly, the trouble often begins before the demo with corporate overview slides that announce, “How We Are Different,” citing capabilities that are differentiators from the vendor’s perspective.  Again, if those capabilities are desired by the prospect, you are moving in the right direction.  But if they are not need or wanted, you’ve set the stage for a negative outcome.  Presenting those undesired capabilities in the demo completes the Buying It Back drama.

Discovery should be done prior to the demo with a specific focus on your differentiators – to include them as Specific Capabilities or to rule them out as Buying It Back candidates.

What About Discovery on the Fly?

The tendency of vendors to fall into this self-made Buying It Back trap is huge and happens far too frequently.  The temptation to dive further into your software is extremely high once it has been launched!  It takes enormous discipline to avoid showing capabilities that the prospect doesn’t want to pay for.

There are two solutions to avoid Buying It Back when doing Discovery on the Fly:

  1. Introduce your capabilities in the form of a question before showing them.

If the prospect responds positively, then you can say, “Well, we have that capability – would you like to see it?”

On the other hand, if your prospect’s response is, “No, we don’t really want that….” or “We can’t see situations where that would be valuable,” then you simply move on and don’t show that capability.

Note that if the negative response happens too frequently, you are still at risk of Buying It Back, since your prospect will begin to assume that all of these capabilities will be in the software they purchase from you, if they move forward.

  1. Use a Vision Generation Demonstration instead of trying to do traditional Discovery on the Fly. A Vision Generation Demo is designed to satisfy the prospect’s desire to “see what’s possible” while moving the prospect (gently, yet firmly!) into a discovery conversation.

The subsequent discovery dialog should yield the list of Specific Capabilities your prospect wants and needs, enabling you to present a Technical Proof Demo that is tailored precisely – and avoid Buying It Back.

Summary

Buying It Back is an insidious and often unrealized problem in B-to-B software demonstrations.  Many traditional sales and presales playbooks and processes actually intensify the risk.

Great Demo! methodology helps you to successfully avoid Buying It Back outcomes.  Vision Generation Demos replace old, ineffective overview demos.  Situation Slides help you guide the output of discovery conversations to capture the Specific Capabilities you need to deliver targeted and highly compelling Technical Proof Demos.

Stop Buying It Back…!

 

 

Copyright © 2022 The Second Derivative – All Rights Reserved.

Share This
;