Demos That Don't Suck With Peter Cohan
A good or bad demonstration can sell or destroy whatever you are selling. You can spend all your money on research to make the best possible product, but everything goes to waste if you have a sloppy demo. Learn how to make a good demonstration with your host, Chad Burmeister, and his guest, Peter Cohan. Peter is the Founder of The Second Derivative, which provides coaching for demonstration skills. Learn some important key factors that play a role in a good demo and some things that you should avoid. Learn how to focus on the customer and start with what they're looking for with Peter in this episode.
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Demos That Don't Suck With Peter Cohan
I have Peter Cohan, who is with Second Derivative. He's the Founder. He started the company years ago. He's got about a dozen or so folks who are helping companies around the world do better demos. I'm excited to have him here because I have been part of a lot of very bad demos. Welcome to the show, Peter.
Thanks so much. You took away my typical starting point, which is if somebody asks me what I do, I return with a question that is, “Have you ever seen a bad software demonstration?”
I have probably given a handful in my day as well when I was first learning and I see them regularly. Nowadays, if you are 2 or 3 minutes into a bad demo, it's time out and, “I'm going ahead and jump everybody. You are in great hands with Shannon, my Director of Operations.”
That's why we are in business. Demo by demo, person by person, company by company, improve the world of watching a mouse fly across the screen.
It's interesting because literally we are changing our website and we have been debating on, should the button say, “Request a Demo or not,” because there's always this debate of, “Should you set the wrong expectation that I want to give a demo before it's time to give a demo?” I want to dig into all of those questions.
I've got a suggestion for that. Put up two buttons. The first says, “Book a Conversation.” The second says, “Book a Demo.” You will see people will self-qualify. If all they want to do is get a sense of what the product looks like, they will say, “Book a Demo.” If they are interested in learning something about the solutions, they are interested in having a discovery conversation. They are likely to click on the Book a Conversation button.
Let's dig in here. I like to first help our audience get to know you and how you’ve got to this place, not just where you are physically but this place in life. Which part of the country or world were you raised in?
San Francisco Bay Area in California. I'm a California native protected under Federal law.
That's like The Beach Boys. Were they in San Francisco?
That's Southern California. We are talking Grateful Dead.
Stop saving the best for last. Do the last thing first.
If you think back to your early age, what was your passion then? I like to connect the dots between how did you get here from where did you come from?
The dot-connecting with the meta challenge. I am told that I had two passions. The first was peanut butter with a spoon or eaten with a spoon. The second was being ADHD. I'm semi-serious about that.
I like peanut butter with a spoon and I don't know many people in sales who aren't ADHD. That puts two things in common. Where did you go to college? Did you stay in San Francisco or did you go somewhere else?
I went down to the land of The Beach Boys, to the University of California San Diego, where I matriculated in Chemistry, Biochemistry and Computer Science.
What did you learn in those days that applies to what you are doing now or is there any of that applicable?
The most applicable thing in that era, we were programming computers using these things called punch cards. When you built punch cards, it taught you to type precisely because if you made a single error, you had to reject that card and start all over again.
I don't know if I did the punch cards. I remember one of the elections, they had the hanging chads but that's a different thing.
It's a similar concept. Basic principles of Science can be applied extraordinarily well to the world of sales. Sales have always been considered in Art and that's incorrect. That is part of the core of this whole business demos, which have also been considered an art and that's incorrect. It's a set of skills that can be learned, tap, applied and improved.
Artificial intelligence, that's obviously the topic of the show. A lot of times, we talked about how companies use AI and I will give an example. We are seeing companies do use AI to pull a dataset. Instead of randomly blasting a group of people, you can find out who has the best intentions to look for your products? What Geography? How many employees do they have? Are they growing or not? There's so much data in machine learning that you can use to get a better dataset.
You then build out an email approach with multiple emails that can be fully automated. You can automate social outreach and you can even automate voicemail drops. It feels to me having done this for two and a half years and over 100 deployments. What used to be the job of the seller, is they are now able to focus on higher-value work.
Good Demos: When in a demo, do not have any corporate or product overview. This is for the customer. It's all about them, not you.
I would put having a great demo in that bucket. This conversation and what you are doing is important because if you spend all that money on AI, on the leads and building pipeline and it converts at a low level, then you have wasted a lot of money and time. If you can improve the conversion rate by 2X, 3X, 4X, then the investment in demo skills is easy. In breaking it down, you could put Book a Conversation, Book a Meet, Book a Demo. I love that idea. I'm going to do that by the way. What are the other 5 or 3 things? Do you have a process that you break down for the audience? What are the most important things in a demo?
Let me introduce ourselves in the form of a brief story. In 1998, I was the President and Founder of a business unit as a part of an overall operation. I grew it over five years into a $30 million business with about 120 reports. Along the way, in addition to selling software, I was buying a bunch of software. I was the customer and we were buying CRM systems. We invited a pile of vendors and all the demos went the same way. They all started a long linear almost day in the painful life.
“Here's how you enter a new record. Here's how you nurture it. Here's how you add more records to that same record. Here's how you run some marketing campaigns.” Two hours later, several of the vendors that came in and consumed hours of our time said at the end of the meeting, “It looks like we are out of time. We know you wanted to see some reports and dashboards on the forecast and pipeline. Trust us. They are fabulous.”
After the third of these demos where they’ve never got to what the executive, which was me, in this case, was looking for, which was dashboards and information on the current forecast, “How solid it is? How to coach? Who's solid? Who's weak?” We are Looking at the pipeline, going forward with the same kind of concerns. I realized something horrible. That was, we were doing the same thing to our customers in our demos. We were saving the best for last and in many cases, running out of time or getting into situations where the ranking folks had left the room and everybody else's brains were mush.
I’ve got the team together and I said, “Guys, we've got to do the last thing first.” That became the hallmark and methodology called Great Demo, “Do the last thing first.” We banded to practice it, refined it. When I finally got tired of having an incredible amount of whining in an organization, I founded my own business in 2003 and have not looked back. I can go through 5 or 7 key items for the methodology. I can tell you that everybody thinks to gasp out loud validated using AI technology.
I think of WebEx in 2005 to 2008 pre-Cisco Acquisition, I was running a sales team thereof a dozen people. Stu Schmidt was the Head of Training at the time. He's now gone on to a lot of other CEO-type of jobs. He's the SVP of Sales at one of those lead companies now. He taught exactly what you are saying and that is, “In the first 3 to 5 minutes, let's understand what you are looking for.”
Let's go to the last thing first because I don't want to make a guesstimate of what the most important things are. In a lot of web meetings, when you are doing high velocity, we didn't have the luxury of, “Let’s do a one-hour discovery and then let's do the next call.” We had to jam that all into a 45-minute conversation. Quick discovery, we would share a whiteboard, take few notes, share the screen and show what the customer asked us to show in the first five minutes.
Years ago, a company called Gong.io, which you know because they are huge in AI, did a study 67,149 recorded demos and analyze the results using machine learning and AI. They teased out some key indicators of success. I will offer five. The first that was at the very most successful demos had a pre-demo discovery. That was a leading indicator of success. It shouldn't be a challenging concept that to present a compelling demonstration, you need to be able to effectively do a diagnosis before you offer a prescription. That has been in sales methodology since the early 1900s, at least. Item number one, “You’ve got to do discovery.”
Item number two is a crisp review of the customer's situation. In other words, you could put up a slide. This is what we recommend. That starts with the words, “What we heard from you.” It's all about the customer. No corporate overview presentation, no product overview presentation, very limited introduction to the sales team, “Dear customer, this is all about you. Let's review our understanding of your situation and confirm that our understanding is correct or that there are things we need to edit.” Number two, the key indicator for success.
Our VP of sales started with us. I think I'm good at this. Guess what? I found myself back on the track of wanting to go in 150 customers, “Here are some logo slides.” To my credit, I set thousands and I put in the 2 or 3 slides. Those are the backup slides. I only go to 1 or 2 but I did catch myself in that area. He came in and it's all about the customer, “You need 300 opportunities in a quarter. You are going to get 150 if you keep doing it the way you are. Here's the value of getting the other 150 and it’s $1.5 million revenue. This is a big problem you need to solve and you don't have a way to solve it now.” Once you get in that kind of an alignment, it’s like, “That's exactly what we need.” Skip Miller would always train me and all you need to say at that point is, “We can do that.”
A well-written article is all about the crisp summary of the whole rest of the thing.
Number one, pre-demo discovery. Number two, the demo begins with a crisp review of the customer's situation with that confirmed. Number three is, “Do the last thing first.” The Gong studies showed conclusively that the most successful demos started with the end result that the customer was looking for that deliverable, report, dashboard or whatever it was. Number four is an intriguing concept called the inverted pyramid.
I can introduce this briefly by asking you the question, “How do you read a newspaper article?” Maybe let me ask it slightly, “Remember newspapers?” If you think about newspaper articles or the way news is presented on the web, they follow this concept called the inverted pyramid. The first thing we do when we are scanning a webpage, a new site webpage, is we look and read what?
The picture and the word in pictures where I would go.
The pictures and the headlines. Those are designed to capture our interest and engage us. That example of doing the last thing first. What do we do next? Do we read the entire article?
You scroll down.
The way most articles are drafted, you read the first paragraph because, in a well-written article, it's the crisp summary of the whole rest of the thing. That's something we teach in Great Demo Methodology. We call it the fewest number of clicks to execute any particular task. You keep reading and exit on your own in accord with your depth and level of interest. This is what we teach people to do in demos. You keep testing to see, “Is this what you like? Is this all you need? Do we want to go any further?” At some point, most people will say, “No, I'm good. Let's move forward.”
Sometimes you can get yourself into a trap. You don't need to go down.
Do you remember a solution selling? They had a terrific phrase stop selling when the customer is ready to buy.
There was a vendor and I'm not going to name them. They are a dialer. Years ago, at Riverbed Technology in the Bay Area, I lived in Belmont and commuted to the city. This company that's a dialer company came in, we saw the first five minutes and we are like, “We are ready.” One hour and a half later, I said, “Can you send us the order form? I will send you a check for $25,000.” He was like, “We’ve got to set up the technical call next.
There's a whole lot of next steps.” We ended up buying from ConnectAndSell. That's where I ended up going to work as the VP of sales later because they made it seamless and easy to buy. The repercussions of a bad demo are that another company is in $8 million in sales. They are a legitimate company but the demo done by the CEO at the time was horrendous.
Good Demos: The most successful demos start with the end result that the customer is looking for.
That is a name that's known as a sales prevention team.
We are on three. What's number four or did we do four already?
That was four. Number one, pre-demo discovery. Number two, crisp review the customer's situation. Number three, do the last thing first. Number four is inverted pyramids. You hit the most important things early in the demo. As you go deeper, you are getting to finer levels of detail so that you can exit out or more importantly, the customer can exit out when they are satisfied.
Think about it from the standpoint of the executive. They only need about six minutes to say, “This is what we need.” They may say something like folks, “I've got another meeting I want to go. You guys can stay here and torture the vendor as long as you like but I'm comfortable to proceed.” Execs are satisfied very rapidly. Middle managers or next staff members are thinking, “I'm going to have to run these workflows.”
They will want you to go through some of the details and system administrators there, “How do you set up and administer the software a totally different set of needs and capabilities?” We teach people inverted pyramids so you can map to each of those constituencies. That's number four and number five makes it a conversation we call, we say, peel back the layers in accord with the customer's depth and level of interest.
One of the compelling indicators of success from the Gong study was the most successful demos enjoyed speaker switches, meaning vendor talking versus the customer asking a question or commenting. That's a speaker switch. They enjoyed speaker switches. I will ask you the question. What do you think the average number of minutes or seconds were for the most successful recorded demos?
Less than 40 minutes.
That would be a person talking nonstop for 40 minutes.
The whole interaction
We are talking about how long between like you and I had a speaker switch?
Stop selling when the customer is ready to buy.
Less than five minutes.
The number is 76 seconds or one minute and a quarter. On average, if you are doing a successful demo, it should be a conversation, which means that if you have been talking for 3, 4, 6 or 8 minutes, which is what most demos are like, “That is way too long.”
There's a company that I should introduce you to that you probably have never heard of and it will change the way that you work with your customers. It's called Balto Software. What it does is it's a Chrome extension that plugs into any kind of audio discussion. Imagine a little sidecar in this Zoom video that your prospect can't see but the seller can see. It will pop up on the window. You are approaching 76 seconds. All of the guts of what you know, which is moving upfront, do discovery first, all of those things can now be built into the platform and served up. If you say a competitor's name, it pops up and says, “Here are the 7 or 8 questions you could ask Peter at this time during the call.”
This beats the heck out of using an egg timer.
One of them is funny, it says, “You are talking 70% of the time. You are talking too much.” You see the rep in the demo video lean back and go, “I have been talking for a while now. What questions do you have now that we have discussed this?” The person interacts and comes back to interactions.
Several things are going on here. One is it's enormously gratifying to have a methodology validated with hard data. In fact, the Gong studies. The first study was 67,000 data points. It's well over three million demos that they have analyzed with the same result. It's one thing to know in your heart that a methodology is a successful approach. It's quite something else to have it validated specifically by AI machine learning an enormous amount of data. That is a delight.
I have heard a few things on the studies that say, “What's causation versus correlation?” It loses me when people start to diagnose the results. At the end of the day, there’s some level of variability but three million audio files don't lie. The data's the data. I think what you are doing is tremendous. If I could flip, go to an 80/20, where 80% of the demos were as good as what you are sharing now, the world would be a better place.
Early on in this business, I had some conversations with Guy Kawasaki, who is the author of The Macintosh Way. He ended up asking for a copy of my book and read it. He sent me this beautiful quote, “If everyone just practiced Chapter 1, the world would be a better place.”
I'm glad I have some of the same lines of thinking as Guy Kawasaki. He published this. “The best subject line in an email is RE:” The best meanings are the most opens. The customer, in some cases, might feel duped by that.
There's a little disingenuity there. Far too many people have figured that out. Their lead emails appear like it's a response to something you sent. That's disingenuous but it's true. It gets you to open it.
Good Demos: On average, if you are doing a successful demo, it should be a conversation. If you've been talking for three or four minutes, which is what most demos are like, that is way too long.
I have enjoyed this conversation, Peter. Thank you so much for sharing this with the audience. This may be my first show that goes in the new platform that we are launching because this is extremely valuable content. I will publish this as my very first contribution to my own second company called SalesClass.ai.
Congratulations to both of us.
Thank you for joining. If anyone wants to get ahold of you to learn more about how you can help them, how would they reach you?
It’s very easy. GreatDemo.com is our business website. If you wanted to take a sample of the methodology without having to contact us strangely enough, there's a book on Amazon called Great Demo. I know the author personally.
I appreciate your time. It's good getting to know you. I'm glad you are putting your major to use in what you are doing and teaching.
Thanks so much.
Signing out. Thank you.
Important Links:
Shannon Miller - LinkedIn
Stu Schmidt - LinkedIn
About Peter Cohan
Peter Cohan is the founder and principal of The Second Derivative and the author of the Great Demo! methodology, focused on helping software organizations improve their sales and marketing results – primarily through improving organizations’ demonstrations.
The bulk of his experience is with complex, enterprise software and strategic systems sold to varied audiences in a range of vertical markets. He has enjoyed roles in technical and product marketing, marketing management, sales and sales management, senior management and the C-Suite - as well as serving on Boards of Directors.
In 2003, he authored Great Demo!, a book that provides methods to create and execute compelling demonstrations. The 2nd edition of Great Demo! was published March 2005.
In July 2004, he enabled and began moderating DemoGurus®, a community web exchange dedicated to helping sales and marketing teams improve their software demonstrations, which was subsequently transitioned to the Great Demo! LinkedIn Group in 2010-2011.
Before The Second Derivative, Peter founded the Discovery Tools® business unit at Symyx Technologies, Inc., where he grew the business from an empty spreadsheet into a $30 million per year operation. Prior to Symyx, Peter served in marketing, sales, and management positions at MDL Information Systems, a leading provider of scientific information management software. Peter currently serves on the Board of Directors for Collaborative Drug Discovery, Inc., is an advisor to IN2SV, Inc. and a mentor to StartX, the Stanford University start-up accelerator. He holds a degree in chemistry.
Peter has experience as an individual contributor, manager and senior management in marketing, sales, business development, and as a member of the C-suite. He has also been, and continues to be, a customer.
