How Does an Inefficient Demo Process Bottleneck SaaS Companies?

Poor Perception of Product Value

SaaS companies are a unique kind of business. They don’t offer retail products or one-time services, but they offer a long-time service designed to aid clients with their needs. Prospective clients are looking for something that will work well and serve a purpose for them. SaaS companies must have an efficient demo process so that they can prove to potential clients that their service is helpful, successful, and worth their money. If companies can’t prove the value of their service, they won’t convince anyone to purchase it.

Impedes Sales

The lack of an efficient demo process presents hurdles for the onboarding strategy, which is essential in closing a SaaS sale. When potential clients fail to understand how to use the product, they shy away from buying it. A SaaS is bought to help streamline work, but if it has a steep learning curve, it is detrimental to business progress.

Overlooked by Potential Clients

If you are unable to provide platform demos to your prospective customers, then you can easily lose out on the best chance to demonstrate your product to an audience who may be too busy to configure your solution for their own needs. By having a guided tour of what makes your SaaS solution best in class, you can be much more hands-on in reassuring your users that your product fits their requirements.

Demos may even assist in helping you to win higher ticket customers, as many enterprise buyers express a keen interest in taking platform demos over signing up and sharing potentially sensitive data before speaking to one of your advisors.

To further promote your platform demos, it is wise to conduct market research to see if there is demand for demos of services or hosted software related to your product. From personal experience, [providing] dedicated landing pages for each specific demo attracts many leads.

Inability to Communicate Product Benefits

SaaS companies have to prove themselves to potential customers more than any other type of company. They have to prove that their service is trustworthy, works well, and will offer a unique value. If a company fails to demonstrate its service efficiently, customers won’t know what they would be getting, so they will turn to another company instead.

Prevents Financial Investors from Buying In

Start-ups need to use what they have to prove to investors that they’re a safe bet. And, the most cost-effective way to do this is to build a demo or some kind of rough beta for potential customers to try out.

It’s kind of like getting a production company to pick up your story and finance it. To make the entire feature would cost too much, so what a lot of filmmakers do is create a ten-minute proof-of-concept that gives people a strong taste of what this could be if it were a feature. If that short film gets a ton of traction and excitement online, then the excitement itself becomes proof that this can be sold for a profit.

It’s the same thing for SaaS start-ups. To convince investors, they need proof beyond the pitch. They need to see how it works, and they need to see that you’re capable of building and running it. Sure, someone like Elon Musk can go to an investor with nothing more than an idea, but people just starting who don’t have that track record, they need to create a demo or a beta of some kind.

That’s what you use as leverage to build value for yourself in the absence of value, which is pretty much where most people are when they first start. You build your first component, the most essential component that isn’t going to kill your wallet, and then you blast it out to see how users respond to it. With a demo, you can track data that can support your pitch, help you figure out who your customers are, which can help you figure out how to better market and price your service, and it can help you iterate and make your service better.

Without a demo, even if it’s bare-bones, you’re stuck in your bubble theorizing what your service could be, and being a new entrepreneur in that position when pitching to anyone is probably going to make you look less favorable than someone who has a working demo and who has built a lot of traction and who has real data to substantiate their claims.

Your Software Product Won’t Be Evaluated by Potential Clients

If you run a SaaS startup, an efficient sales demo is a critical element of your product. It has the largest persuasive power amongst the entire arsenal of marketing methods, regardless of the software you sell.

An efficient sales demo for products with the ACV (Annual Contract Value) below $1,000 has to be delivered on a self-serve basis. For products with the AVC significantly higher than $1,000 (around $3,000), you should consider tailoring the personalized demo processes for each customer.

If you don’t deliver an inspiring demo process, your software product won’t be evaluated by potential clients, and they won’t purchase it as many times as you’d like them to.

Lost Deals

[Missteps] in the demo process erode confidence in the solution. It is like showing up for a date with spinach stuck between your teeth. Too often, demos are unfocused or feature tours hoping to hit on something meaningful, which leaves prospects to [determine] whether a solution is a fit.

This bottlenecks revenue because deals stall without a compelling reason to buy, clear next steps, or added value in the follow-up process. Sales blame marketing for bad leads, marketing blames development for lack of features, development blames management for lack of resources, and management asks sales about the fat pipeline with high win projections. Sales replies, “Things were going well, and then the prospect just ghosted me.”