Captivate Your Customers: Top Product Demo Techniques to Skyrocket Startup Success

This article explores the importance of compelling demos for startup companies, providing insights into the key metrics that can help improve demo success rates. From transaction volume to customization, understanding the metrics and analytics involved in demos can help companies optimize their approach and drive growth.

According to recent studies, the success rate of demos can make or break a startup's growth trajectory. Unfortunately, only 16% of Series A and B companies have a demo success rate above 50%. As a result, most startups need help to deliver a compelling demo that resonates with customers.?

The common mistakes companies make during demos include:

• Not understanding their audience: If the demo addresses the audience's specific pain points and concerns, it's likely to convert. But, unfortunately, most Series A & B companies learn that so often don't know how to pivot from a scrappy demo to an adjustable machine.?
• Missing Point of View: The audience needs to see how this can change their current and future work. This grounded strategy must drive the product or solution the teams are discussing. However, it often is presented as a utility rather than a solution.?
• Poor Storytelling: If your demo doesn't fit the POV narrative, connecting with the audience's objectives and aspirations in one cohesive well-elaborated story, it ends as information clutter.?
• Lack of preparation: This includes various things, starting with knowing your contacts, the company's main product, and primary attributes ending with technical difficulties, awkward pauses, or poor choice of words.?
• Failure to follow up: If the company fails to follow up after the demo, the audience may assume they are uninterested in their business.

Like my previous examples, I want to focus on examples that illustrate their differences, sometimes dictating the topics as must-haves talking to their prospects. I'll focus on two industries this time - MarTech and FinTech.?

Example 1 - MarTech. According to a study by HubSpot, the average conversion rate for a B2B SaaS software demo in the marketing and advertising industry is around 12%. It suggests that about one out of every eight demos leads to a closed deal. Individual companies may experience higher or lower conversion rates depending on their circumstances. There are plenty of MarTech companies on the market.?

The most typical components of demo requirements in the MarTech industry include the following:

• Integration Capabilities: MarTech solutions are expected to integrate with multiple platforms, including social media, email, conversation tools, CRM, Marketing Automation, and web analytics (there is plenty). A demo should showcase how the solution integrates with these platforms and how it can provide a unified view of the customer across multiple channels.?
• Personalization & Customization: MarTech solutions are designed to enable personalized customer interactions. A demo should highlight how the solution can customize messaging, content, and targeted audience and offer to create a unique customer experience. These companies sell to multiple industries, so customization should be distinct from optionality (these two things have a subtle difference that matters here).?
• Automation: Automation is a critical component of MarTech solutions. A demo should demonstrate how the solution automates repetitive tasks, such as campaign setup and scheduling, social media posts, and lead nurturing, to help save time and increase efficiency. It connects well with the integration point from above. Once you operate in the ecosystem environment, you must help your prospect understand how they will implement new solutions and how much more complicated it will be to manage the environment. Remember, they look for simplification from where they are instead of showing them how much more work they need to put in.?
• Analytics and Reporting: Analytics and reporting are essential for measuring the effectiveness of marketing campaigns. A demo should showcase how the solution provides in-depth analytics and reporting capabilities, including conversion rates, click-through rates, and ROI. Timing is everything here. Customers want to see the immediate effect of their actions. However, solving analytical problems in this industry takes work (but possible and requires trade-offs on product roadmap).?
• Ease of Use: The MarTech industry is constantly evolving, and businesses need solutions that are easy to use and require minimal training. A demo should highlight the intuitive and user-friendly solution, with a streamlined interface that enables users to accomplish their goals quickly and easily. The user experience should always be your concern while presenting to the marketing audience that should spend more time on creative work instead of dealing with the intricacies of their system.?

Example 2 - FinTech. The demo success conversion rate in the FinTech industry can vary depending on the specific size, sub-segment that the company operates, and the presented solution. Remember that FinTech similar might operate in a heavily regulated market that may require "must haves" on your typical demo. For the same reason, it might impact the effectiveness of the demo process. However, according to a study by Finovate, the average conversion rate for digital banking demos in the FinTech industry is around 40-50%.?

The most typical components of demo requirements in the MarTech industry include the following:

• Compliance: The demo should demonstrate how the product complies with regulatory requirements, such as KYC (Know Your Customer), AML (Anti-Money Laundering), and other financial regulations. Even when you sell to the FinTech industry, you should include some of these aspects of your work and approach. Nothing that drives too much attention but has enough to show that you care and understand the industry better than your competitor.?
• Integration with financial institutions: The demo should show how the product integrates with banks, credit unions, and other financial institutions to provide seamless transactions and data access. None of these FinTechs can operate in isolation, needless to mention that each of us often has several bank accounts. So why would a commercial institution have one??
• Security: The demo should highlight the security measures to protect users' financial information, such as multi-factor authentication and encryption. This list goes on depending on which area of the industry you operate. For example, nobody wants to get an email that starts, "We are sorry to inform you that your data was found in a darknet." That's a good story if you ensure your prospect about your ability to secure customers' data and privacy.?
• Analytics: The demo should showcase the product's capabilities, including data visualization, trend analysis, and predictive analytics. There are many metrics here Transaction Volume (e.g., TPV, ATV, GMV, Transaction Success Rate), Processing Time, Time to Value, Platform Uptime, CAC, and many others.?
• Customization: The demo should demonstrate how the product can be customized to meet the specific needs of financial institutions and individual users, such as branding, language, and functionality. A good example here would be often requested Customizable Workflow, API Integrations, White-Labeling, Multi-Currency model, etc.?

The industries have certain similarities based on the above examples but only at the category level, where details change your conversation flow. It must often be tailored for each meeting separately, with some components that can be reused (not recycled). Working in any industry as a presales or solution consultant requires much more than just focusing on the above areas. You must show the depth of your product and the industry, including your competitors and their vulnerabilities.?

The best way to move from the weaknesses of your demo or build from scratch is to implement a set of metrics immediately. I'll list a few.

• Conversion Rates: One of the most critical metrics for measuring demo success is conversion rate. You must calculate the percentage of prospects who attended a demo and then went on to become paying customers. Please do not measure conversion only to the next stage of the sales process. It is a common fallacy behind teams being defensive, saying, "Beyond this point, I do not influence the opportunity; therefore, I cannot be on the hook for that." Conversion rates are a team game, so think twice before saying it. If something goes wrong, raise your hand and highlight the problem. It's better than assuming your job is done, but conversion needs improving. Then you and the rest of the company fail altogether. I'd choose confrontation over passive failure acceptance. Would you? Last, don't measure the conversion rate in one dimension. Look at different audiences and how they respond to your demo. That will help you expand the more tailored content and can be reused effectively with the type of prospects or customers. It also shows that your product fits the expectations.
• Average Deal Size: Once you focus on the correct conversion rates, you must ensure that the effort behind all resources you put into this part of the process gives you the proper return. You don't need a demo if your product is more like a utility solution driven by the classic transactional sale of $2K. All you need is a pre-recorded short video explaining how it works. It can be multiple videos, but you don't need highly paid Solution Consultants to explain self-serve-like content. For the same reason, please make sure that your resources follow the average deal size, allocating them to the more significant, complex deals that offer various use cases. That helps you to discover the future opportunities on that account, driving a higher and faster adoption. Don't look for peanuts if you want to feed a tiger.?
• Average Demo Duration: Monitoring prospects' time in a demo can provide insights into their engagement with your product. Prospects spending more time in the demo can indicate that they are more interested in your solution.
• Follow-up Actions: Keeping track of the number of follow-up actions taken by prospects after a demo can help measure how effective the demo was in driving engagement. It can include requests for more information, scheduling a follow-up call, or starting a trial. I recommend measuring the follow-up within 24 hours max.?
• Demo Customer Score: Gathering feedback from customers who have gone through your demo process can help identify areas for improvement. It can include feedback on the presentation's clarity, the demo's effectiveness in addressing their pain points, and the overall experience. Do it at the individual level to gamify to champion your game in the demo space. The rewards should be encouraging but not spoil your presales or solution consultants. Make sure it's fun.?
• Prospect Engagement: you can measure the time the prospect per persona (buyer, decision maker, and influencer) spends reviewing your content. You can leverage tools that can help you to make it interactive to encourage your prospect to click through things. Yeah, it is pretty cool.?
• Demo User Score: Implement the score around your demo specialists. This should be more of an index-like measure, but it helps stack the ranking and add other variables you discover in the ongoing conversations.?
• Demo Completion Rate: People might drop the call or try to finish this early. We often validate the ghosting process. Prospect is scheduled but ends with No Show Lost in your SFDC opportunity. Waste of time, but it doesn't have to be that way. Your team should take care of that.??
• Win/Loss Ratio: You should check how the demo impacts your Win/Loss ratio. You won't be able to provide a demo for every opportunity, but you should see the effects in better conversion to Won for those you do. Then you know that spending money on the presales team gives you a higher volume of deals getting signed faster.?

By tracking these metrics, companies can better understand their demo process and make data-driven decisions to improve their success rates. However, based on the stats from above, the room for improvement provides many opportunities.?

There are several things a growing and scaling company can do to improve its demo conversion rate:

• Customer Analytics: Knowing your audience, persona, competitors, and ICP is essential to understand the pain points of your targeted customer. This will help you to tailor your demo accordingly. Please make sure you have all their details analyzed, adjusted, and refreshed regularly (at least once a year, if not bi-annually).?
• Grand Central Library: Create a central library of demos for your teams: This will include good and bad examples and short and long videos that can be shared or provided to your audience. It is convenient when you need more headcounts but can leverage other company resources.?
• Everybody Demo: create a sales culture where everyone can do a simple demo without involving solution consultants. Organizations should encourage them to know how to present the product for other functions. For example, in a larger company, it might take much work to expect their finance folks to talk about the product as someone who spent 20 years in cybersecurity. That's true, but there is no excuse for sales folks working with presales; it's a mandatory game.?
• Enablement & Product Marketing: invest early in these functions. It might feel like a luxury, but it can help you create the story, evangelize and train your sales teams regularly. In addition, create a regular certification to keep your sales teams accountable to a high demo standard.?
• Make a connection: It's easier said than done, but once you're in your audience's shoes, you realize a lot of information may be overwhelming. Focus on your product's key features and benefits most relevant to your audience. Think briefly about how you would see this product doing your prospect's job.?
• Practice, prepare, and practice again: Ensure your presenters are well-rehearsed and confident in delivering the demo. It will help avoid awkward pauses or technical difficulties during the presentation. In addition, make sure that the live demos are reviewed by experienced peers or managers regularly. There are many things you can do to avoid the ghosting process.
• Use a story: People remember stories better than a list of features. So use storytelling techniques or analogies to help your audience understand your product's problem, solution, and value proposition. Make it memorable.?
• Customer's Hat: Remember to help your prospect understand how they should measure success criteria based on your system or the data you provide. You must pivot from the feature to the measure. Once you close the lid, you prove that you listened to them, and they can trust your solution.?
• Never miss a follow-up: Follow up with your audience to answer additional questions and address any concerns after the demo. It will help build trust and increase the likelihood of conversion.

Thanks for reading! If you have any suggestions on how I can make this newsletter deliver better content, please don't hesitate to contact me directly. I'm happy to get your perspective.?

In the meantime, if you like what you are reading, you can check previous posts here:

1. The Burn Rate Balancing Act: Finding the Sweet Spot for Your Company's Growth
2. Maximizing Customer Lifetime Value: Examples, Metrics and Practical Guide to RevOps Practitioners.
3. RevOps 101: Beyond the Basics. Why Customer Acquisition Cost Matters More Than You Think ?
4. Is Your Company IPO Ready? ?