Do Interactive Demos Work?

Interactive demos are still relatively new and haven’t been widely adopted yet. For me, it’s a no-brainer; openly showing your product and letting website visitors interact with it can/should significantly decrease friction during the sales process. Theoretically, this should also speed up the process since prospects will already be familiar with and have used the product. If prospects don’t like what they see on the website, they theoretically shouldn’t submit the form anyways. Conversely, if they like what they see, these prospects should be more inclined to submit the demo form, have the sales call, and, in a nutshell, convert.

To remain completely unbiased, I wrote the above paragraph before reviewing any data for this report. To be fair, writing a report on interactive demos wasn’t initially on our to-do list. However, after releasing the state of pricing report, we received numerous requests for information on interactive demos. Upon reviewing these people’s profiles, I noticed that most of these people didn’t have interactive demos on their websites. My hypothesis is that perhaps this report is necessary for other marketers who face resistance from their managers or sales teams when they pitch adding an interactive demo to their websites. So in this report, we’ll show how interactive demos perform across the funnel.?

Methodology

MQL: High-intent demo, pricing page, contact us submissions. Basically every hand-raiser on the website. Ebook form submissions, lead-gen stuff, webinar registrations were not counted as MQLs. In the first Labs report, some people got a bit heated with us for saying MQLs, but I won’t be changing this simply because I like the sound of it.

SQO: Pipeline created; SQL, Opportunity, etc. Every company has different definitions, but we unified this on the backend and used the SQO definition for when the pipeline is actually created.

CW: Closed won deals, new business, new revenue, added ARR.?

Form Pages: These are pages like demo, pricing, and contact us, where after submitting a form, the sales process begins.

Interactive Demo: Refers to companies providing a product tour, demo, or interactive videos on their website that visitors can engage with directly, without needing a phone call or similar direct interaction.

Sample Size: For this report, our sample size is smaller because not many of our customers offer an interactive demo. We analyzed data from 24 B2B SaaS companies based in the US and the UK.

Sample Description: From $30M ARR to $500M ARR; average ACV from $15K to $80K.?

Part I: Website Metrics

In the State of Pricing, Demo, and Case Study Pages report, we found out that demo pages have a 5.5% on-page conversion rate, meaning that over 5 out of every 100 visitors to the demo page submit the form. However, demo pages also have the highest bounce rate, averaging 70%.

On the other hand, pricing pages have a way better bounce rate with an average of 38% - but on that front, the conversion rate drops from 5.5% to 3.8%. So when we calculate the weighted average (because pricing pages also have 13x more visitors), we find out that on average B2B SaaS websites have a 43% bounce rate and a 4.1% conversion rates from high-intent forms.

If we take a step back and look at this journey from the first website visit, the Pricing Page report shows that the average website form conversion rate per unique visitor was 1.1% for B2B SaaS websites. This means that for every 91 unique visitors, a B2B SaaS company gets one form submission on average.

Now, how do interactive demos impact these?

Our dataset shows that if the visitor engages with the interactive demo, the average website conversion rate increases to 1.8%. This means that interactive demos actually increase the chance of generating MQLs by 63%.

On top of this, our dataset shows that it takes an average of 8.3 days from the first form view to form submission. However, if the visitor engages with the interactive demo, this period decreases by 1.5 days, resulting in an average of 6.8 days from the first view to form submission.

We don’t see any difference in the data when it comes to the average number of pages visited by unique users; when there’s no interactive demo, website visitors visit an average of 3.34 pages compared to 3.16 when there is an interactive demo, which corresponds to a 5.6% better performance without interactive demo, hence statistically insignificant—to an extent.

I suppose we need to consider this metric alongside time on page data. What we’re seeing is that when there’s no interactive demo, visitors spend 1.72x more time on the website.?

Yet, I don’t think this necessarily means that having an interactive demo negatively impacts the time spent on the website. Yes, the data suggests that, but I think we need to interpret this differently. In my opinion, when there's an interactive demo, visitors spend less time because they spend less time reading and scrolling through to learn about the product; the interactive demo essentially shows them most of the things they need—hence, they spend less time.

Part II: Conversion Metrics

Okay, at the top of the funnel, it makes sense that interactive demos increase form submission rates and decrease the duration from the first form view to submission. As mentioned in the intro, seeing the product beforehand helps visitors to easily decide if they want to proceed. If they don't want to proceed, they likely wouldn't have proceeded anyway.

But what about the entire funnel? Do we see similar metrics? The answer is yes.

In Navattic's State of the Interactive Product Demo 2024 report, Natalie Marcotullio found that interactive demos can increase website conversion rates by 16%. Our dataset shows a slightly different picture—significantly better, in fact.

If the website visitor engages with the interactive demo before submitting the demo form, we see a net 1.5x better MQL:SQL conversion rate compared to those who didn't engage with the interactive demo. To be fair, this exceeds my expectations, my hypothesis primarily focused on the top of the funnel. However, if we take a step back and think about it, it kind of makes sense. Considering the usual B2B SaaS sales processes, the first call is mostly with the SDRs, who qualify the prospect based on their business needs. However, the prospect usually sees the product for the first time during a call with an AE. Since most companies qualify deals after the first call with an AE, if the prospect doesn’t like the product during that AE qualification call, then the prospect will be disqualified. This scenario explains the difference in the MQL:SQL conversion rate better.

This once again shows that if you delay showing your product until the second call, you not only harm your conversion rates but also end up wasting both your SDR’s and AE’s time. When considered from this perspective, not having an interactive demo can be more costly than one might initially think.

And the final aspect is the revenue impact, where we continue to see the significant influence of having an interactive demo. Our dataset shows that companies with interactive demos on their websites close deals 23% faster than those without.

I believe this has two implications: Firstly, prospects who see the interactive demo gain a better understanding of the product and move more quickly as they're already somewhat familiar with the product. Secondly, it suggests that the shorter sales cycle might be due to the entire buying committee using the interactive demo to understand what the product is about, instead of being in calls or going through documents and case studies. In addition to that, potentially procurement or finance teams can see these interactive demos to understand the value proposition better; which could indicate more rapidly through the interactive demo. As a result, we see faster sales cycles.