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Why Demos Fail to Sell: A Question

Why do SaaS (Software as a Service) B2B firms make you go through a demo? This was the question on an expert platform I'm a member of. "What's with all the secrecy?" Why not, as is common in the B2C world, simply let the user download the SaaS and use it for a free trial period? Wouldn't that lead to better traction and more paying customers?

The original version of this post was written in October 2014. Recently, a SaaS founder was sharing a list of factors that helped them get over eight figures ($10MM) in revenue this year...and guess what the first item was? "No Free Demo". So that prompted a review of this post. Let's see how things have updated in the past nine years:

"No Free Demo"

Before leaving Canada, I was Business Development Manager of a full service boutique IT firm. One of our main products was for network security. 'Book demos, book demos, book demos' was the direction. The idea was to get people on a call and screenshare appointment with one of our techs. My experience and understanding from then to now leads me to this conclusion:

I don't think it's secrecy. I believe it's bad selling.

"Look at this awesome thing I developed! Surely if you look at it, and I can control the demonstration, I can explain everything about it. Then you'll really want it!"

Sometimes a product or service creator can be fearful someone will "steal" their idea. They have not realized ideas are a dime a dozen: it's execution that is difficult to match! This could lead to the perception of secrecy. But I believe poor understanding of selling is a much more common issue in the SaaS world.

Underlying Reasons Why Demos Fail to Sell

Many products are developed because the creator had an idea. Not because the market told them they needed it, note. This is why so many SaaS startups fail. No need. Then they make up some sort of pricing structure which has no basis in reality and certainly isn't profitable...and then must go out into the marketplace and try to convert people into becoming users. Tough road!

What most salespeople (and people who shouldn't really be in sales, but accidentally fell into the role) fail to understand is that customers rarely buy because of ALL the features your product or service has. They tend to buy because of ONE of these.

Example: the network security product I sold had four main features. But buyers would only be interested in one of them--a different one each time. Only months later, when they came back and asked the now-perceived-as-expert (me), "Gee, we need X...do you know anything that does that?" I could then happily inform them, "What you have now does that already."

Sell first, educate later. Often, putting too many choices or things to think about in front of a prospect will result in overwhelming them. Another example: I'm a producer for a TV network. When we first meet with a prospect, I don't go into everything we can do. I stick to one big idea, and that's what we sell. When I first started in the field, I tried upselling, cross selling, what have you. Nope. All that did was confuse the prospects. Now I sell them on the one big idea...and then come back a little later, now that they're used to working with us, and pick up the other orders I knew would be a good fit following the first discussion.

What to Do Now That You Know Why Demos Fail to Sell

The standard belief is: "If I can just get in front of enough people and tell them about every single feature of my SaaS, I will get lots of customers." And to a degree this is true. If you see enough prospects, you'll accidentally make some sales. But you probably won't truly know why they bought.

The demo is an outdated mode of selling. The assumption that people buy because of features and benefits is false. These salespeople don't know any other way, though. They want you on the call. Live. Then, they believe, they can convert you into a paying user. On your own, as a consumer, you're not to be trusted to come to your own correct conclusions.

As a SaaS developer, what else can you do?

Don't develop your tool in isolation! Don't create something just because you alone believe it would be a good idea.

Ask your target market.

Do the people you're going to be relying upon to be paying customers agree this is a needed solution to a real problem?

What do they want it to be and do?

What size of a problem does it solve for them (pricing and validation hint)?

Do they instantly "get it"? Or do you find yourself mired in the quicksand of attempted explanations and blank looks?

Many, many SaaS startups have tried and crashed and burned because they did not find out the answers to these simple questions before they went ahead and developed their solution. It was a solution to a problem nobody but the creator thought was important.

If you asked these questions before starting development, and got clear responses from your target market, you would be able to create a solution to a real problem...including features your audience has told you they will pay for. Now do you need a demo? Of course not. The sales copy will practically write itself. User adoption will happen like a rising tide. At that point, it's just a matter of letting your market know you and your solution exist.

One final example. I sell a stock trading software currently valued at $5000 (the price is going up!). My discussion with prospects is NEVER about technical issues: I might have to answer one or two little tech questions, but we do not even look at the software. Buyers invest in the software because they understand it will help them make more money. I'll say it again: I have never had to do a demo or show a single screenshot of this software to sell it for $5000.

>> Do you have a question about why demos fail to sell, selling or SaaS? Comment below to let us know! And if this info helped you, please Like or Share to get it in front of others. Jason Kanigan is a profit maximizer for individuals and organizations that competently solve serious problems for well-defined target markets. For more information about Jason, click here. <<

SaaS sales problems can quickly kill Software-as-a-Service businesses.

Take two of the most common:

My prospects aren't Internet savvy
My prospects don’t have enough time or interest to talk to my sales staff.

These issues have been hanging around for a decade or more. And when you combine them, you see results like former Boost CEO Amit Mehta encountered...such as 85% of people who download your app never installing the thing. Pretty serious SaaS sales problems, right?

His solution, detailed in a recent article about the meteoric rise and fall of Boost, was to have a lightbox pop up explaining in three simple images how to install the app.

saas sales problems

Image Credit: Amit Mehta

This change doubled his user base, and had a considerable impact on sales in his freemium model.

The Importance of Your Audience In Fixing SaaS Sales Problems

You can see why it's so important to consider your audience when it comes to SaaS.

If your target market is made up of business techs who regularly get into the nuts and bolts of desktop operations, and know what a registry is, that's one thing.

And if your market is regular public who, as they do with televisions and microwave ovens, use the technology typically have zero idea of how it actually works, that's quite another.

In Amit's case early on, the fact that different browsers have different processes for installing apps consistently blocked all but 1 or 2 in 10 of his "Joe Public" proto-users from installing it.

The problem I find with a lot of web-based SaaS apps is that they don’t properly onboard users on how to use the app. You need to hold your users by the hand and show them EXACTLY what to do. ~Amit Mehta

Boost got to #646 on the Inc. Top 5000 by fixing these SaaS sales problems, so this is good advice to take.

SaaS Sales Problems Are Often a Result of the Curse of Knowledge

A lot of this is the Curse of Knowledge striking again. You and your staff, as the developers, are embedded into that world. You know the terminology. You know the processes. You know the Whats and the Whys.

But your customer?

Do they know these things?

Or are they embedded into a different world, a world where those things don't matter much to their daily lives? Are they completely unaware of the concepts, beliefs and technologies you are so familiar with and casually work with ever day?

In that case, there's quite a gap to bridge, isn't there.

And what else does Amit say?

Validate that you have an app that people actually want to use and pay for! ~Amit Mehta

Well well, what a surprise.

>> If you have a problem anywhere along your conversion process—from attracting customers to delivering your product or service—talk to Jason Kanigan. He is a process improvement expert, copywriter and sales force developer. And he's been working in the IT field with VARs, SaaS developers, and network security firms for a decade. <<

SaaS vendors habitually have a critical problem.

And it leads them to do unproductive things in their sales and marketing process.

We'll be looking at these timewasters and sales losers over the next few posts. Here's a surprise: the same issues plaguing the field in 2007 remain today. For now, though, let's concentrate on the seminal issue.

A lot of SaaS vendors built something nobody wants.

The founder thought it was a cool idea. They went ahead and dumped the few, precious resources they had into their "baby."

What's the issue? They made it in isolation.

Look at that list of SaaS sales problems from 2007:

I don’t have enough leads
My customers want to customize my application
Getting new customers up and running is too long and hard
My prospects aren’t Internet savvy
My sales cycle is too slow and takes too much effort
My prospects always seems to want that one thing we don’t have
My prospects don’t have enough time or interest to talk to my sales staff.

These apply to ERP, accounting software and CRM tools as well, many of which are sold as SaaS solutions.

Why do you think these things happen? Does it sound like the SaaS solution matches up with the buyers' problem?

The Key Issue of Struggling SaaS Vendors

They didn't solve a problem a buyer said they'd pay to have fixed.

If you're one of the SaaS vendors, now you've got a real problem.

You've got a solution in search of a problem.

See, it's not what you say that gets people to buy. It's what they say.

Their problems. Their situations. Their specific language.

Yes, the terminology they use.

When you don't use the language your buyers use to describe the problematic situation they're in which your solution will get them out of, you miss your target.

What do SaaS vendors who don't know this do?

Run to features.

We'll be looking at this in more detail later, but nobody ever bought because of features.

That's why demos don't work.

Cranking Up the Number of Demos Is NOT the Right Solution for SaaS Vendors

Occasionally, if you run enough of them, a demo is going to accidentally match up a problem with your solution.

But this is an accident.

You won't really know why they buy.

And it's obviously incredibly inefficient.

SaaS vendors run into a couple business-killing issues when this happens:

1 - Not Invented Here syndrome, which makes them believe the only possible solution is to do more demos

2 - Burnout of tech staff forced to do unending demos and becoming increasingly frustrated with the results.

We'll look at each of these in greater detail in upcoming posts.

For now, though, if you're one of the crowd of struggling SaaS vendors, ask yourself...

"Did I build something buyers actually want enough to pay for?"