March 4, 2003

22 tips for better software demos:
What's cool, what's hot, what's not

by Bruce Hadley, SoftwareCEO

The biggest challenge with any discussion of software demos is a definition of terms — so let's get that out of the way first.

The way we see it, there are three categories or levels of demos (or "software experiences" that go by the name of demo):

Level 1 demo: The overview. This is your prospect's first impression, where she or he learns about what you do and what problems your software solves. The delivery mechanism varies; we've seen PowerPoint presentations, screen captures on the ISV's Web site, software and tape-based videos, and lots more.

The key distinction here, in our terminology, is that in a Level 1 demo your prospects don't actually operate the software — they watch it.

Level 2 demo: The inspection. At this point, you show your prospect detailed functionality of your software. This is sometimes unguided (e.g., you let the user download a sample or presentation), and sometimes carefully scripted and managed (e.g., an in-person or Web-based step-by-step walk-through of your product).

With a level 2 demo, prospects may or may not actually push the buttons on your software, but they at least share in its operation; e.g., their questions prompt you to push certain buttons.

Level 3 demo: The trial use. This ranges from a downloaded version of the software — usually constrained either by functionality or time — to a full-bore pilot implementation. And, trials aren't necessarily free; in pilot projects, for example, the customer will usually pay for consulting and install time, but the ISV will forego software license fees in anticipation of a larger roll-out.

At the Level 3 stage, the prospect is fully involved — they are the ones pushing the buttons, and the ISV is on the sidelines as a coach, either literally (with a pilot project) or virtually (with a downloaded trial version).

Okay, with those definitions in place, we'd like to focus on the Level 1 demos, for several reasons:

• This is where most software companies struggle. Once they've got their sales reps and SEs in front of a prospect — which happens at Level 2 and Level 3 — they do okay. But, getting to that first meeting — especially nowadays, in this no-new-purchase-orders climate — is a huge challenge.
• Level 1 demos require skills that many software companies lack — especially the smaller firms. If you're like most, you've got engineering talent up the yazoo, but your marketing is an afterthought.
• The technology is changing rapidly. This doesn't mean you should necessarily jump on the latest gimmick, but it could mean that your Lotus ScreenCam demo makes your entire company look like it's 20 years behind the times (and behind your competitors).
• The cost. We don't think demos need to be expensive, but software companies often choke on the cost because they see it as an added expense — as if it were a luxury item. In some CEO's minds, the sales reps and engineers required to do Level 2 and Level 3 demos are "sunk costs"; shelling out operating capital for the development of a Level 1 demo is painful.

  At the same time, we're well aware that the cost of a good Level 1 demo represents a significant chunk of a small software company's marketing budget — all the more reason to do it right the first time, we say.

With all this in mind, we tracked down three software companies that have built some of the best Level 1 demos we've seen. We wanted to learn from their experience, good and bad.

Here are 22 tips: What you ought to imitate and what you ought to watch out for when you craft your own Level 1 demo:

Tip #1: Know your audience. You should conduct a thorough needs analysis, says John O'Rourke, senior director for global sales strategies at Hyperion, the Stamford, Conn., developer of business and financial performance management software. "We conducted surveys and one-on-one interviews," O'Rourke says. "In our case, most prospects are from finance, but a portion are IT people. Each group has its own set of issues."

During his 15 years in the software business, O'Rourke says demos have moved upscale: "Customers are more intelligent and experienced," he says. "They want to see something that resonates with them, something that solves a problem in their industry, something that's attuned to their problem. The need for customization has become more extreme."

Tip #2: For complex products, Level 1 demos are a necessity. "In the past, we'd let people download five or six static screen shots," O'Rourke says. "Definitely not very sexy. And although some products might lend themselves to a full download, most of ours are complex: They pull data from internal systems, and require a good amount of implementation. These don't lend themselves to a try-and-buy model."

Hyperion's Level 1 demos solve the problem: The demos on the company's Web site are being accessed up to 800 times per week, and traffic has been steady since they were were released, O'Rourke says.

"Our core competency is content," says Marc Verstraate, product marketing manager at Greenwood Village, Colo.-based Thomson-Micromedex, which offers a virtual library of clinical data for healthcare providers. "The key is to make it high-level, to show portions based on customer needs or problems. If you're a pharmacist, you shouldn't have to sit through the portions that don't appeal to you."

Tip #3: Use demos as lead qualifiers. "Our online product demos are the first level of qualification," says Vera Fischer, marketing director at Forgent Networks, an Austin, Texas-based developer of enterprise meeting management software. "They let the prospect decide whether he wants to proceed with more info, and give our sales department a tool to qualify them."

Forgent's demos have been accessed several hundred times since they went up last August, Fischer says. "We used to do live demos online, via WebEx, for anyone who requested a demo," she says. "You shouldn't do that until someone is further along in the sales cycle. The beauty of these demos is that users don't download anything — they just click and the demos go. Users can control the demo direction, or they can just sit back and watch."

If you'd like to see these software companies' best-practices demos, here are the links:

• Forgent demos
• Hyperion demos
• Micromedex demos

Tip #4: Use demos for lead capture. Both Hyperion and Forgent require prospects to enter a name, title, company, phone number, and e-mail address before viewing a demo.

That may strike some as an unnecessary barrier, but Fischer thinks it's part of the qualification process; i.e., if you're unwilling to provide that much information, you're probably not a real lead. "About 70% of our demo leads are coming from our own campaigns," she says, "with the balance coming from word of mouth and search engines. We're not reaching out to random people."

All leads go to Forgent's telemarketing team for follow-up within 24 hours. At that juncture they're qualified, and from there all leads get categorized and pushed to the field.

"With this system, we can handle a larger number of prospects through the lead cycle, which means we can move them through the process more quickly. We also have a better metric on each campaign — we can see immediately what's working." Fischer says her campaigns produce e-mail open rates of about 50%, with overall click-through rates of 1% to 4%. "The list is crucial in getting the higher rates," she says. "Nothing is as important as the quality of the list."

In contrast, Micromedex requires no login to view its demos online, mainly because 60% to 70% of the people who come to the company's Web site are looking for medical information. "That isn't what we do, and we don't supply that to consumers, but we still come up in the search engines," Verstraate says.

Verstraate says he'd prefer to leave the qualification up to his sales force: "We want our sales force to hand-select whom to give a demo disc to. If prospects are just kicking the tires, we don't want the information from them."

Tip #5: Keep it short. "People are busy and need to have information quickly," Fischer says. "Anything over four-and-a-half to five minutes is too long. If it has to be that long, then break it up — that's why we have three demos. We have three software products, and you can use them separately or together."

Tip #6: Create a balance between features and benefits. "You need to show people how your software works," Fischer says. In the Forgent, Hyperion, and Micromedex demos, you'll see a click on the screen — the feature — while a professional voice-over talks about how the user benefits.

Tip #7: Get into the "how to" of your product. Even though Fischer says the Forgent demos are "very marketing driven," she cautions against any marketing filler. "I don't want to spend a minute looking at marketing stuff," she says. "Walk me through a scenario. Let's say I want to use your software to set up a meeting with these people from these departments with these resources — show me how to do that."

Hyperion demos follow "a day in the life" scenarios, O'Rourke says: "We show them how them the product would be used in their work environment, in their role. We're starting to use the word 'trailers,' because they're like movie trailers." Hyperion's three demos, are five to seven minutes each; O'Rourke plans to create another three demos this year.

Verstraate echoes the movie theme: "Just like a good movie, a successful demo has a good plot, a story line, a good ending, and good visual graphics."

Tip #8: Don't do a corporate overview. It's a common mistake in software demos, Fischer says, to not provide enough nuts-and-bolts information. "The demo should entice the viewer to say, 'Man, I want to see more!'" she says. "A lot of people confuse a demo with a glitzy marketing corporate piece on their Web site. Your demo should be a tutorial."

At the same time, a common software demo gaffe is too much detail, says O'Rourke. "You can blow people away with too much detail, so that your software looks way too complex and confusing." All the more reason to observe the six-minute time limit religiously: There's not enough room for unnecessary detail.

Verstraate agrees: "It's a big mistake in a demo to try to go too deep in a demo," he says. "If you make it too long, you're going to lose people. Make it short and to the point. Use it to gain your audience, then let your sales reps do what they do best. If we tried to show all that we do, it would take four to five hours."

Tip #9: Begin the production process with an outline. "More than likely, any enterprise product is going to have a lot of features and benefits," Fischer says. "You need to identify the top five or six that you think are most important to get across. You can't go into creating a five-minute demo completely blind; you'll find that those minutes go by really fast."

Tip #10: Write a script. Or, better yet, get someone who's done this before to write a script for you.

Marc Verstraate was kind enough to show us his seven scripts for the Thomson-Micromedex demos. Every software company's needs will be different, of course, but if you've never seen a demo script before, these samples are instructive. SoftwareCEO Site members can get them from the Marketing and PR section of our Downloads Library.

Tip #11: Put the privacy of the demo to your advantage. "With technology like Flash and Cold Fusion, you have the ability to give control to the customer and bring out the detail of the product," Verstraate says. "Instead of your sales guys saying, 'I'll be in your office one day in March and if you miss that demo, tough luck,' you've now got something the user can view anytime.

"Within our demos, there's a control panel where the prospect can speed things up, slow things down, pause, or stop — they can run it when they want, how they want."

You ought to consider Level 1 demos in the same light as a test drive of a new automobile, Verstraate says: "Do you feel more comfortable with your spouse in the car, or a salesman? You need to let your software prospects discuss it with their peers. When your sales rep calls on them, he can go into more detail with live demos."

Tip #12: Provide a call to action and contact links. We know, this should be as obvious as putting your e-mail address on your business card, but it's amazing how many software companies fail this basic point of common sense. At the end of the Forgent demos, for example, you'll see a phone number to call for more information as well one live link to go to other demos, and another live link to an e-mail request for more information.

Tip #13: Choose the right narrator (or "voice talent") for your audience. And, don't listen to a portfolio of past work — get voiceovers from professionals mouthing your words. "We got samples from people reading our script," Fischer says. "In our business, you have to speak clearly — for example, saying things like 'ANSII SQL database.' Be very wary of someone who's not used to talking about software."

"What you choose depends on what your audience wants to hear," Verstraate says. "We researched this with all our reps and 20 customers, and asked them if it would it more believable from a man's or woman's voice; almost all said a man's voice. Ours is a very serious, clinical audience, so we went with a mid-range voice that spoke very clearly, and made points very well without a lot of emotional overlay."

Tip #14: Match corporate look and feel. "There should be no surprises," Fischer says. "Our demos use the same opening slide for colors and palette. After that — once they're in the demo — they're in our product, so the corporate look is less critical."

Tip #15: Talk only about features that are available now. "Don't put something out there that isn't fully representative of your current product," Fischer says. "If it's in a future release, indicate that."

Tip #16: Update your demos when you update your products. "If your new release comes out with new features, you must update your demos," Fischer says. "A demo's shelf life is as long as you're selling the product. You're making a mistake if it's going to be dated — and as soon as you change something in the product, you can change the demo."

"It's a mistake to create a demo with a short shelf life," Verstraate says. "You want nine months to a year. If you've got a major release coming out, especially if it involves an interface change, wait to do your demo."

Tip #17: Push demos, not paper, to your sales people. "Our reps were so excited about these demos, they couldn't stand it," Fischer says. "Now when they call in to prospective accounts, even if they can't get to them, they can say, 'Go check out our demos on our Web site." Forgent very rarely sends out paper material anymore, Fischer says: "Only if it's requested. And, you can download all datasheets from our Web site."

O'Rourke's team pushes the demos out to Hyperion's 400-person sales force: "We make them available to the sale force so that they can put them on the laptops to use at tradeshows, or in meeting intros," he says.

Verstraate created a demo set that runs a total of 12-and-a-half minutes, split into seven portions. The demos show healthcare providers how they can use the Micromedex virtual library of clinical data.

"These are the hottest sellers we've got," he says. In addition to the Web download, Verstraate put the demos on CDs and sent them to all Micromedex sales people; 12 reps in U.S., plus 12 account managers, plus 15 distributors went through 2,000 CDs in four months.

"The demos are great warm-ups," says Verstraate. "In a sales meeting, I can run the demo first, then turn that off and go into the live demo as a sales person. And, the CD is a nice leave-behind."

Tip #18: Use demos for international reach. "We're getting requests for localized versions, so we're doing French and Japanese voiceovers," O'Rourke says. The beauty here, of course, is cost: The visual portion of Hyperion's demos remain intact; only the audio needs replacing.

"Our distributors are taking portions of our demos and redoing in them in their native languages," Verstraate says. "Because 85% to 90% of our business comes from the U.S., we elected to not spend the money to do it ourselves." Yet another advantage of this route: The foreign distributors can't mess with the visual portion of your demo.

Tip #19: Budget $2,500 per minute. "There are lots of companies out there who are anxious to get into this, and you can do it for as $12,000 to $15,000," Verstraate says. "We spent $30,000."

Fischer says she also spent about $30,000. "The production company basically held our hand throughout the whole thing," she says. "We had never done this before."

Tip #20: Allow at least a month to build it. JC Stites, founder and CEO of demo provider Autodemo in Louisville, Ky., says his firm can create software demos very quickly. "We're set up like a service bureau — we can start in a day," he says.

"We ask clients to present the material to us over the Web, then our scriptwriter sends them a script within a week. We can create a finished demo in three weeks, because we don't have to go through a discovery period."

However, that three-wekk construction period doesn't include your own planning time. "I spent a solid six weeks gathering the information and figuring out how to present what we have in the best possible light," Verstraate says.

Tip #21: Find a software industry specialist. "I'd find someone who's done a lot of software demos or specializes in software," Verstraate says. "Look at their past work. We had four vendors come in to show us what they could do."

There are three big advantages to using an outside firm, Verstraate says: "Expertise in technology, the ability to write a decent script, and access to good voice talent — which is often overlooked. If you get a terrible voice, people aren't going to look at your demo."

Stites says expertise with the technology is crucial, because most demos are delivered online. "Too many people don't think about lowest common denominator," he says. "They build videos, for example, that take a long time to download, or need a particular plug-in. We use the latest development tools for Flash, but save it in version 4, which is nearly three years old, so we reach 98.6% of users."

Thanks to four years of practice, Autodemo can shrink file sizes down to a size that works flawlessly on a 56K dialup connection. "File size is in the range 100K to 200K per minute," Stites says. "We have refined the process so that we can minimize the content; even a 24K dialup will see it okay."

Tip #22: Use your demo live link everywhere. "The ROI on demos comes from distribution," Stites says. "Your demos should go up on your Web site, on sales laptops, be linked in your e-mail signatures and ads, and run as self-looping demos at tradeshows. It's a powerful thing, when everyone is on the same page — I think of it as cloning your best salesperson."