Product Demo: How It Works + How to Create & Deliver One

Read our step-by-step guide on how to create and deliver a live product demo that sells your potential buyers on the value of your solution.

A product demo, or sales demo, is the act of presenting a web-based or physical product to a qualified prospect to demonstrate its value. In the demo, sellers show a buyer how the product actually works to solve their specific pain points, helping them to envision using the product within their business. Done correctly, the demo can help you quickly close the sale. Here, we’ll tell you how a demo works, the steps to giving one, and some demoing tips.

How Product Demos Work

Product demos typically occur live over the phone or Zoom, but can also be a pre-recorded video. Usually, you'll host a demo after you've qualified a lead as part of your lead nurturing activities, and it may even have its own stage in your sales pipeline. During a product demo, you show a prospect your product’s features that are relevant to their unique needs with the goal of helping the prospect see its value, as well as to move them toward a successful close. 

The term “demo” typically refers to software-as-a-service (SaaS) demos, but it can also be for physical products. Software demos are usually given live over video conferencing with screen-sharing capabilities. Reps also might record video demos and email them to prospects at scale or host them on their website. You may even give a live demo during a larger sales presentation.

In this article, we’ll focus on live demos, which are highly effective at building relationships with prospects and personalizing the demo experience. However, you can follow the same steps to record a demo video. Regardless of exactly how and when you present a demo, the overall process can be boiled down into three main stages: 

  1. Research Your Prospect: During a pre-demo discovery call, learn about your prospect’s pain points so that you can show them the features that will solve them. 
  2. Create a Personalized Demo Flow: Plan out what parts of the product you’ll show them, what you’ll say about each, and the order in which you’ll present them. 
  3. Give the Demo: In a 30-minute virtual meeting, engage in small talk, introduce your product, show 2-3 main features (focusing on benefits), answer any questions, and set next steps. 

We’ll cover the step-by-step process for giving a demo more in depth below. For now, it’s important to point out one main rule: all live demos should follow a premeditated flow, but be personalized to your prospect’s needs. Avoid showing them every feature. They’ll likely get overwhelmed and confused. Instead, focus on the features that will satisfy their specific needs.

For a better understanding of a successful product demo, check out this video below from Microsoft, which delivers a demo as part of a larger sales presentation. Then, keep reading for the steps on creating and executing your own successful product demo.

live product demo example
Click to view product demo example

Who Gives Product Demos?

Almost all product-based companies offer some form of a product demo. REI records videos of backpacks. Macy’s offers 360 photos of their sweaters. However, live demos — the ones we’re focused on today — are restricted mostly to B2B SaaS companies with complex, customizable products that users would struggle to understand without the help of a sales rep. 

B2B SaaS companies fit into one of three categories, which do demos a bit differently: 

  • Self-Service SaaS: These lower-priced, user-friendly B2B products like Slack or SEMrush will typically record demos that users can watch. The product is simple, so each buyer will be able to tell if it’s a good fit and see the value without a sales rep. 
  • Transactional SaaS: The higher-priced, more complex B2B products are harder to comprehend. Prospects need a seller to help them understand how it works to satisfy their needs before making such a large investment.
  • Enterprise SaaS: Expensive software like Salesforce are highly customizable to fit in with each buyer’s tech stack and internal processes. The decision-making team might need multiple demos to understand how it works for the department. 

Like self-service SaaS brands, B2C SaaS companies (apps or gaming software) are typically better off creating recorded demos for prospects to access on their own time. They typically host these recordings on their websites. However, in any case, if a product is expensive enough (over $5,000 annual contract value), a live demo could be justified. 

Typically, sales reps like account executives are the ones that give demos. In smaller startups, the founder might still give demos. Some companies task their marketing team with sending recorded demos to leads to qualify them before they can meet with a sales rep. Sometimes sales development reps will also send short recorded demos in prospecting emails. Finally, technical salespeople are also leveraged for more complex products.

How to Create & Deliver a Product Demo

During a demo, you educate a prospect on how your product works through a visual demonstration. You want them to see the value. But, value means something different to each buyer. Therefore, personalize each demo to show prospects how your solution solves their specific pain points. 

Check out this overview of the nine steps to give a quality live product demo. Then, continue reading below for a detailed breakdown of each step:

1. Conduct a Discover Call

Qualify the prospect and learn about their needs, goals, and three main pain points.

2. Schedule a Demo

Ask for the meeting and send a calendar invite with a link to your web conferencing room or number.

3. Prepare a Personalized Demo Flow

Write an outline of the demo. It should highlight 2-3 features that specifically relate to the prospect’s pain points.

4. Set Up the Demo

Get the technical environment ready by preparing the product or service so it’s relevant to your prospect.

5. Hold Introductions

Engage in brief small talk and introduce yourself and your business.

6. Set the Scene

Demonstrate that you understand the prospect’s needs and priorities by restating their goal, challenges, and reasons for the challenges. Then state your solution.

7. Give High-Level Product Overview

Give the viewer enough context to understand how the individual features you’ll demo relate to the whole system or product.

8. Deliver the Personalized Demo

Go through your product while sticking to the demo flow you created in step three.

9. Establish Next Steps

Get another meeting on the calendar to show the prospect more of the product, meet with other decision makers, review your proposal, or close the deal.

We’ll now cover each of these steps in depth so you can fully understand how to execute each one.

1. Conduct a Discovery Call

A discovery call is a conversation during which you ask a lead questions to learn about their level of qualification, needs, and situation. This call will help you craft a demo that fits your prospect and helps them see how exactly they can use your product on a day-to-day basis and how it will fulfill their needs.

It’s important to have this call before a demo for two main reasons:

  • Measure Fit: You need to ensure that leads are a good fit for your solution before you devote resources to giving them a full product demo.
  • Collect Details for Personalization: You can gather intel about the prospect’s goals, challenges, and pain points to plan out a personalized demo flow (step 3 below).

On the discovery call, aim to uncover at least three pain points that can be satisfied or solved by features of your product. These will be the main features you focus on in your demo. To learn how to qualify leads with this call, read our article on how to conduct a discovery call, where we break the process down into bite-sized steps that you can replicate.

2. Schedule the Demo

At the end of the discovery call, if the lead meets your qualification criteria, schedule a product demo while you have them on the phone. When doing this, be sure to clearly lay out an agenda. Tell them how long the demo will last, what you’ll show them, and why they should be interested in attending.

Here’s an example of how to sell the demo: {Name}, It sounds like {product name} would be a great fit to help you {value proposition}. I’d love to set up 30 minutes with you to give you a web-demo of the {product}. I’d especially love to show you {feature X}, which will help you solve {main pain point}, and {feature Y}, which will help you resolve {issue}. You’ll also walk away with an understanding of how the entire system works at a high level. How does that sound?

If they say no, explore why, and handle any objections. When you get a confirmation, find a time that works for both of you. And after the call, send them a calendar invite so they can easily remember your appointment date and time. Also, send them a follow-up email restating the value they’ll receive from seeing the demo so that they get excited. This doubles as a reminder to join the demo.

Pro Tip:

A prospect who agrees to a demo has already committed time to your business, so make the rest of the process quick and easy for them. Send a Calendly link so they can seamlessly choose a date and time. Include all meeting details in the calendar invite. Send them a reminder email the day before. All of this will show that you respect their time and will be easy to work with.

3. Prepare a Personalized Demo Flow

A demo flow is a written script that outlines what parts of the product you’ll show the prospect, what you’ll say regarding each part, and the order you’ll do it in. Writing out this flow before the demo will help you plan and structure your demo. 

The main components of your demo flow are the following: 

  • Features: The 2-3 components of the product that matter most to the prospect. Be mindful of the order you choose for these. For instance, show a task management feature before a reporting one; that way, the task will show up in the report, thereby bringing it full circle. 
  • Value Proposition: The reason(s) why each feature is valuable to the prospect. “{Feature} automates outreach, saving your team time.” Check our article on unique selling proposition (USP) for more.
  • Use Cases: Inform the prospect on how they can use the current feature or functionality to solve their problem. “I could see your team using {feature} to speed up your {process type}.” 
  • Success Stories: Talk about how other businesses used this feature to succeed in some area, or, better yet, to solve an issue that your prospect also wants gone. 

To illustrate, here’s an example of a demo flow: Main desktop platform dashboard > How to set up building inspection workflow > What happens when the workflow is triggered > Switch to the cellular device and show the app and the POV of property manager after workflow is triggered > Show how they complete inspection in-app > Switch back to dashboard to show reporting. 

Of course, this leaves out the actual script of what you’ll say during the discussion of each feature. Write talking points you’ll give for each feature, including the use cases, value propositions, and success stories that will be relevant to the buyer. For example, you might jot down “Talk about the elevator inspection use case” next to the inspection app feature. 

Also, personalize any recorded video demos for your different types of typical buyer. For example, a CRM software company might make a demo for sales managers that highlights task management, and one for VPs that highlights reporting and analytics.

4. Set Up the Demo

On the technical side of preparation, create a demo environment that resembles what it will be like for the prospect if they bought the product. Do this by setting up a demo with relevant data and fields, relatable workflows, and correct integrations. The platform should be relatable to the buyer. This helps them actually envision themselves owning it. 

To set up a personalized demo environment, take these factors into account: 

  • Relevant Data and Fields: Use data that looks familiar to the buyer. A marketing manager buying project management software should see “article in progress” instead of “hotel construction in progress.” 
  • Relatable Workflows: Prospects should see workflows that they could actually use. A property management buyer based in Austin shouldn’t be seeing a workflow for snowstorm preparation. 
  • Correct Integrations: Figure out what software your prospect uses and create a demo account that integrates with that tech. If that’s impossible, simply use one similar to theirs. 

Before your demo, rehearse your demo flow in this environment a few times. Also, ensure that all the technology is up and running and the correct tabs are open in your browser. Check that all essential apps are open and cords plugged in and accessible. If you’re switching between digital platforms or devices, test the transitions once at least 20 minutes before the demo.

5. Hold Introductions

At the beginning of the demo, use about five minutes to establish some trust and rapport with your prospect. Do this by talking with them about personal or business matters. Also, help them get to know you by introducing yourself and your company. A quick 2-3 sentence blurb about whom your company helps and how you do it will be enough to satisfy the prospect. 

Here are some ways to build rapport and trust with your prospect: 

  • Ask Your Prospect Questions: Kick off small talk with some questions. “How long have you been in the industry?” “What inspired you to make the switch from {industry X} to {industry Y}?” “How was the trip to {location} with your family?”
  • Bring Up Industry News: If the prospect is a decision maker, it’s likely they stay up to date on recent events in their industry. To come across as an expert, start some conversations about these happenings.  
  • Be Genuine: Tell honest stories about yourself that have to do with the experiences your prospect shares. This helps them form a connection with you.

A prospect who trusts you is primed to be amazed as you reveal each new feature in the demo, rather than on the lookout for sneaky sales tactics. After small talk, transition into the demo by saying something like, “Alright, I could chat about this for hours, but we’ve only got 30 minutes on the calendar, so let’s get started.”

6. Set the Scene

When it's time to dive in, set the scene by demonstrating your understanding of the prospect’s situation. Summarize their goal, the main challenge in their way, implications of never reaching the goal, and the three main underlying pain points/causes. Finally, end with a statement of your solution for them and the features you’ll show them, thereby building anticipation for the big reveal. 

Here’s how to set the scene like a pro: 

  • Goal: “So, we talked about how your main goal is to double the number of buildings your company manages by next year.”
  • Challenge: “But, you feel that your property managers aren’t capable of taking on all that work and also that new property managers are too expensive to hire and train.”
  • Implications: “And you told me that if you don’t expand quickly you’ll lose your edge.”
  • Issues/Pain Points: “Now, from what I gathered, the main reason for this inability to reach your goal is three-fold: your business lacks the SOP framework to quickly train new managers, your managers work too slowly on-site, and your team wastes time doing paperwork.”
  • Solution: “Our mobile app will increase the efficiency of your current managers out in the field, and our document automation will save them time in the office. Plus, our SOP library and workflow software will make ramping up new managers extremely simple.”
  • Value Proposition: “With our software, you’ll be able to double the buildings you manage without doubling your staff. In fact, you might not need to hire any new managers at all.”

By now, your prospect should be excited about what they’re about to see. So, segue out of this stage and into the product demo itself. Say, “Before I go through the three features I mentioned that’ll solve your specific problems, let’s give you a quick high-level overview of the product.”

7. Give a High-Level Product Overview

Your 10,000-foot overview depends on your product. Basically, the goal here is to give them enough contextual information to understand how the exact features you’re going to show them are connected within and to the whole product.

Follow these best practices when giving your product overview:

  • Summarize How the Product Works: Show them the home dashboard or simply verbalize how the product functions. A good formula for this is "The system is built to X. It does this by Y.”
  • Keep the Overview Brief: Keep the summary to under two minutes to avoid overcomplicating the overview; you'll get into more details in the demo itself.
  • Have the Prospect in Mind: You don't have to personalize your verbiage too much in this step, but ensure your overview is still relevant to the prospect's needs to keep their interest.

After you've finished your quick overview, it's time for the meat and potatoes of your demo, including explaining how it directly relates to the prospect and their pain points.

Pro Tip:

Think of this step like a car salesman showing a potential buyer the exterior and interior of a car they believe would be a good fit before cracking open the hood. Your prospect won't be ready for a full explanation of the product and how they can use it before understanding what the product is in the first place. Give them this basic information, then dive in to the details during the actual demo.

8. Deliver the Personalized Demo

If you haven’t already, share your screen. Run through the demo flow you created in step 3 above. Start demoing the three main features that solve the prospect’s three pain points, along with the sub-features. For example, if a rep showed the reporting function, they’d also highlight the report filtering options. This portion should take about 15-20 minutes, but if it goes over because your prospect is enthralled and wants to see more, let it happen if you have the time.

This leads us to a key point. As you move through the demo, pay attention to the prospect. If they’re expressing interest in a certain feature, hone in on it. Share more success stories or use cases than you jotted down in your demo flow. Sometimes a product can be sold because of one shining feature. On the other hand, if they seem bored, move on to the next feature. 

Also, ask questions throughout the demo, like the following: 

  • How Could You See Your Team Using This Feature? This one’s great because it encourages the prospect to think about how they’ll benefit from the product. 
  • Any Questions? This ensures the viewer is following what you’re saying. It gives them an opportunity to speak up and request any clarification. 
  • How Does This Feature X Compare to Your Current Product’s Functionality? If they’re using another product, help them think about how yours is better. 
  • How Do You Think This Will Help You With {Process}? Empower them to imagine how your feature will improve a current process you learned about during discovery. 

Like in a sales presentation, the live demo calls for a reactionary element on the side of the presenter; you must be able to adjust at a moment’s notice. If the prospect seems particularly interested as you click into a feature, spend more time on that feature. And note which features they were interested in, either mentally or on paper. As you near the end of the demo, you should have at least a sense of the prospect’s feelings about your product.

9. Establish Next Steps

Set next steps and get another meeting on the calendar. Your specific next steps depend on two factors — how much the prospect liked the product and their internal purchasing process. If you were unable to gauge their level of interest during the demo or understand their buying process in discovery, ask them before proposing next steps. 

Common next steps after a demo include the following: 

  • Proposal/Contract Review: If your prospect likes the product and is ready to buy, tell them you’ll send a proposal, then you both can set up another time to meet to go over the proposal. 
  • Another Demo: Some prospects will be one of many decision makers, especially if you’re selling enterprise software. Schedule some time to have another demo with the key decision makers. Or, this person might just want more time to see other features. 
  • Speak Further With the Prospect: Some prospects will want to meet with their team and write up some questions they’d like to ask you before a proposal is sent out. 
  • Disqualification: Sometimes, the prospect just won’t be a good fit. If so, disqualify them and wish them well. Record this event in your CRM and consider assessing your lead qualification process to see why this person made it to a demo. 

If you’re having trouble figuring out which next steps to take, but are pretty sure the prospect is interested, feel free to ask for the sale, which we cover in depth in our article on how to ask for the sale. One effective way is to say, “What will it take for you to buy our solution?” The prospect will either tell you they’re ready to buy or they’ll state objections. It’s better than gray area.

If they share their objections or hesitations, you can overcome them, especially if you know how to handle sales objections properly. Or they’ll tell you the exact steps you need to take to make the sale. This could be another meeting, another demo, or a drop in the price. Whatever it is, clarity on what the prospect needs gives you direction on how to move it along to a close.

Top 4 Tips on Holding Successful Product Demos

A product demo has the power to make or break your sale. To ensure you do your best out there, take a look at these top four tips for holding product demos.

Hand Over Control to the Prospect

“Want to test it out?” has been asked countless times by savvy sales reps. They’re well aware that once the prospect gets their hands on the product or takes it for a test drive, they’ll develop a sense of ownership over the product. And people hate losing things they own that make them feel good.

So, in a software demo, consider giving them control of the screen to use the software, whether that means creating a workflow, assigning a task, or exporting reports on the platform. If you’re in an in-person meeting, this is as simple as letting them onto your laptop or tablet. If you’re meeting virtually, you can use Demodesk, a collaborative screen-sharing technology that allows you to seamlessly hand over the controls.

Record a Video Demo

Record a video demo of your solution that you can host on your website or send to leads during email prospecting. This is a great weapon to use to generate interest in website visitors or MQLs. It’s also handy to have in your back pocket for when a higher-level executive might need to sign off on the contract but doesn’t have time for a full-fledged demo.

To execute this in the most effective way, check out this article by TechSmith where they take you through the steps to make a product demo video.

Ask Questions Throughout the Demo

One great way to keep your prospect engaged throughout the demo is by asking them questions and sparking conversations about the features and how they would fit into the prospect’s day-to-day. 

Here are some questions to ask as you give your demo: 

  • How do you envision your team using this feature? 
  • How is your team currently handling {action that the feature automates or streamlines}
  • How does this functionality differ from that of your current provider?
  • What do you think about {feature}?

Questions don’t just increase engagement. They also give rise to mutual connection, a key ingredient of trust, which will help you win the sale.

Bring Another Member of Your Team

If you’re new to giving product demos, consider bringing in a more experienced rep on your team for assistance. This is quite common when a business development representative is transitioning into an account executive position. You’ll still run the demo, but the colleague will be your safety net. If you receive a tough product question that you don’t know how to answer, your colleague can field it for you, and you can continue to learn and improve in the process.

Bottom Line

A product demo is the act of showing your potential customer how your product can solve their specific pain points. It’s when the illusion of what your solution looks like in the prospect’s mind is replaced by the real thing. It’s when they go, “Hmm, now I see how it works, and I like it.” Now that you understand the basics of a product demo, start mapping out a demo that will wow your ideal customer, and create iterations from there.

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