product demos that close deals
|Jan 10|| 14|
Happy New Year! Hopefully you’ve now settled back into the swing of things after a great break. If you’re looking for more reasons to celebrate, check out Harvard Business Review’s top 20 business transformations of the last decade. HBR points to company culture as the driving factor which led these businesses to their massive successes, but it’s no coincidence that three of the top five are cloud service providers, and the other two have a major SaaS component to their business.
Here’s to a great 2020!
🦶 New year, new SaaS trends, and one that we’re predicting in 2020 is an increase in the number of B2B companies using influencer marketing. Today’s miniversion of B2B influencers are evangelists, who promote brands out of their sheer fandom of the product, and do so without receiving payment aside from a free subscription or some swag (another 2020 trend, fewer people saying swag). But as influencer marketing continues to skyrocket, jumping nearly 50% in 2019, we’ve already started to see more B2B folks like SAP, Oracle, and DivvyHQ dip their toes into the influencer water.
🚨 It’s never a bad time for a reminder that the best startup pitches and marketing messaging are first and foremost, great stories. Our brains are hardwired to first analyze if something is either dangerous or novel—if it’s dangerous, avoid it, if it’s novel, explore it further. So if you deliver too much information and are unable to grab your audience’s attention, their brain’s fear alarm will quickly trigger, and the rest of your pitch will fall on deaf ears. One way to keep people engaged is by having a narrative arc that is only resolved at the end of your pitch. You can also introduce surprises at points where there might be a lull—just make sure it ties in well to your larger story.
🔬 Doing product demos can be counterintuitive—sometimes what feels like is working is actually lessening your chances of closing a deal. Revenue Intelligence platform Gong analyzed over three million demos to see which demo structures and behaviors were the most conducive to selling. Here’s what they found.
Demos that slowly build up to a grand finale are boring. Start with the end result to show the light at the end of the tunnel, then see where the customer wants to focus. Better put, don’t decide how much detail to give on the demo, let the audience!
While it sounds brief, stick to a 9-minute demo for your main demonstration. This gives the opportunity for customers to ask more questions and be more engaged (top sales employees have customers ask 28% more questions).
Loss aversion is key: people will work twice as hard to avoid loss than they will to gain benefits, so focus on the pain of a user’s status quo rather than just your benefits.
Avoid generic social proof in your demo. Putting too much emphasis on big customers using your product actually lowered close rates by 47%.
⌛ They say it takes 10,000 hours to become an expert on any given subject, and Sujan Patel has spent even more time than that helping SaaS companies grow. Looking back on the past few years of his career, there are a few product lessons that stuck with him. The idea that what works for other companies won’t always work for you was one that resonated with us. It’s always tempting to emulate successful strategies from other products, but that rarely works out because there are too many variables to consider in what made them successful.
♟️ The standard calculation for business churn is your number of churned users divided by your total user count. But as Appcues points out, the basic equation can be a misleading metric for high growth companies. This is because businesses with rapidly growing customer bases end up having artificially lower churn rates because their new users haven’t really had a chance to churn in their short customer lifetime. Shopify has been playing chess while we all play checkers, and created an adjusted formula to account for these high growth situations (pictured below with variable definitions) by balancing out any higher periods of customer acquisition.
Churn = number of users churned
∑ = the sum of the number of users on every day (i=1) in the data set (n)
n = number of days in the period
📘 There’s a reason your teachers made you outline essays before writing them, and Pyramid Principle author Barbara Minto would have you do the same. A popular pick among consultants, the book offers guidelines on how to clearly communicate and structure your ideas. Minto suggests you should convey your thoughts through a top-down approach. Just like pitching, if you start with the main takeaway, you can then move down into supporting arguments that brought you there, making it easy for your audience to keep up, and allowing you to attack points methodically. Ideas are best left to groups of three and each box in the pyramid should summarize the boxes below it.