Demo automation is a category of software designed to showcase a company’s product and technical capabilities in a personalized manner, catering to buyers throughout the go-to-market lifecycle.
While the definition is simple enough, there is confusion in the market about demo automation software due to blurred differentiation, varying levels of technical complexity, and a propensity for vendors to oversell to multiple use cases.
Our objective with this report is to establish a position on the demo automation landscape by providing a clearer understanding of the space while clarifying misconceptions.
This report was written and published by the team at GTMshift and has been licensed by TestBox for republishing. To view and download the original GTMshift report, please visit the GTMshift website.
Key insights
- The demo automation category — or interactive demonstration applications as Gartner has described it — has accelerated quickly over the past three years with a large number of vendors entering the space.
- We believe the momentum is warranted and within the next 12-24 months, we will see a majority of software companies allocate budget for demo automation software.
- Competition continues to heat up in this space; however, the lack of differentiation between products is causing confusion for buyers.
- Because of this, products are selling multiple use cases, which may not be the best technical fit for buyers.
- Marketing teams tend to have a specific budget for website-specific tools; however, many of the demo applications target sales and solutions organizations.
- Solutions engineering organizations tend not to have a dedicated budget, so sales cycles are challenging and require more champion management to sell the business case to the head of sales.
- While we mostly agree with Gartner’s classification of (1) Video-Based, (2) Screen Capture, (3) Front-End Cloning, and (4) Live Product with Simulated Data, there are also nuances between how these products solve problems, which we break down differently.
Key moments in the evolution of the demo automation market
There is conflicting information on the origins of demo automation; however, Consensus is credited with the creation of this category (~2013).
Why demo automation matters
Without a doubt, buying and selling are changing. The power dynamics have shifted to buyers because of their ability to self-serve, validate organizations via third-party review companies, and test drive products on the internet. However, there is still a massive need for high-quality sales representatives and customer engagements.
With the decreasing amount of time that buyers spend with vendors — only 17% of the entire buying process according to a 2019 Gartner report — high-quality interactions are mission-critical to closing business.
Our belief is that the buyer's experience is the most important aspect of any sales process.
Because of poor selling experiences and improper expectation-setting during the last decade of SaaS, Gartner stated that 43% of B2B buyers prefer a rep-free experience. That rises to 54% among millennials, who are aging into key decision-making roles and influencers of organizational purchases.
As a result, more buyers than ever are looking to self-service digital buying. A 2020 report from McKinsey & Company showed that 32% of buyers are willing to spend between $50-$500k on a self-service purchase.
However, self-serve buying typically undermines confidence in complex purchases, and those same customers who prefer a rep-free buying experience also see a 23% higher purchase regret. We believe this is due to a lack of expectations set and managed during a purchase decision; without a dedicated individual aiding in the process, consumers may make incorrect assumptions about product capabilities.
B2C buying behaviors are bleeding into B2B
While we do not believe all enterprise software will become self-serve, we do believe that B2C buying behaviors are bleeding into B2B.
The same individuals who buy enterprise software are using products like Amazon, Uber/Lyft, Netflix, and other products that deliver speed and personalization at your fingertips. These types of experiences have created a new sense of urgency and a lack of patience for jumping through hoops; the least path of resistance usually results in a better overall experience.
Leverage has shifted from a sales-controlled process to a buyer-controlled process. Buying teams still need help from sales on how to run the process, but they have increased knowledge and expectations of the experience:
- 68% of buyers say they’re unlikely to engage with a seller who reaches out with information that is irrelevant to their job.
- 47% want sellers to understand their role in the buying process.
- 51% want sellers to understand their business needs.
- 47% want sellers to provide personalized communications.
When analyzing all of the pieces of the go-to-market motion that have been modernized, product demonstrations seem to be the last frontier ripe for disruption. Aragon Research called this "digitizing the last mile of the customer acquisition process" in its 2021 report.
The technology stack has become overwhelmingly crowded with products and tools that are disrupting everything from outbound and inbound experiences to predictive forecasting, discovery, proposals, and more.
Likewise, we expect to see the demo automation space become increasingly competitive.
Evolving buyer expectations
According to Consensus, work hours per demo are up 20% from 2022 to 2023. On average, solutions engineering teams are spending three hours on the preparation, execution, and follow-through per demo. If SEs are working on multiple deals per week, the amount of time spent on non-customer-facing activities is staggering.
Core concepts of demo automation
Demo automation, also known as interactive demonstration applications, is a category of software designed to showcase a company’s product and technical capabilities in a personalized manner, catering to buyers throughout the go-to-market lifecycle.
In our research, we found that most demo automation vendors have a primary use case in which their products are technically achieving a successful outcome. While some vendors may say they can achieve the additional use cases, the way they are solving the problem may not always meet customer expectations.
When looking at the technical feasibility and the how of the demo automation space, many buyers are comparing apples and oranges. While some products may be in the same category, they are solving different use cases. None of these use cases can be achieved through simple implementation. All products have a level of configuration and ongoing maintenance that is different across the use cases.
What are the different types of demo automation software?
The demo automation space is still in the early days, and as a result, recent publications have miscategorized these tools by their abilities.
While there is overlap in the functionality across the primary use cases, we have simplified the space by focusing on the stages in the buying journey and the specific go-to-market teams that each subcategory of tools is best equipped to support.
1. Video demonstration software
Software in this category utilizes micro-video recordings to guide personas through specific aspects of a product. To offer a tailored experience, the software asks prospects 1) to answer a series of questions or 2) use the search feature within the video series to find specific topics.
Where it's best used:
- Awareness
- Consideration/Qualification
- Expansion/Cross-Sell
Roles it's designed for:
- Business Development Reps
- Account Executives
- Solutions Engineers
- Customer Success
Pros:
- Provide a self-service asset utilized at the top of the funnel.
- Can be deployed to alleviate bandwidth bottlenecks in transactional sales.
- Engage new buyers and stakeholders in the sales process.
Cons:
- Need to create and maintain a video library to maximize efficiency.
- Videos are not a one-size-fits-all replacement for buyer interactions.
- Can lose control of the quality of videos being shared with prospects.
Thesis on this subcategory:
The original use case for demo automation software has made great traction, especially in the enterprise where penetration is high. This is due to the low technical barrier and ability to deploy at scale with limited training.
While this subcategory has made massive strides, space may be disrupted by AI and other up-and-coming technologies. Fundamentally, we believe that video demonstration software will see increased competition from all video software that can be deployed for this use case.
This subcategory is not a full replacement for other subcategories and will ultimately sit adjacent to the product tour, live, and sandbox use cases.
2. Product tour software
Software in this category creates interactive experiences through which prospects feel the product through a defined click path. Typically, this is done by cloning a product's front-end code and building tours using the application's no-code editor.
Where it's best used:
- Awareness
- Consideration/Qualification
Roles it's designed for:
- Marketers
- Business Development Reps
Pros:
- Engage demo-averse prospects and fill the pipeline with qualified leads.
- Show a tailored product experience in a controlled manner.
- Allow buyers to access an ungated sneak peek of your product.
Cons:
- Does not showcase a live environment, so further steps in the buying process are needed.
- The value of the actual product is not typically realized in the tight and limited experience.
- Time-consuming to create and manage; arguably unscalable to manage in some instances.
Thesis on this subcategory:
This subcategory is home to the most companies within the demo automation software space due to the low technical complexity of creating software in this category. The number of software solutions entering this space is growing every month, which is creating pricing pressures.
Software solutions from this subcategory are best fit for marketing teams with simple products at the top of the funnel versus sales organizations due to the limitations in live product experience and heavy overhead.
3. Live demonstration software
Software in this category lets sales organizations showcase live versions of their products during sales demonstrations.
Data is added to the demo environment to make the product experience richer either by 1) using a browser plugin to temporarily inject data into the front end of an existing demo environment or 2) preconfiguring unique product accounts with data during account setup. Environments can be rinsed and reused so that they're always clean and ready for the next demonstration.
Where it's best used:
- Demonstration
- Expansion/Cross-Sell
Roles it's designed for:
- Account Executives
- Solutions Engineers
Pros:
- No demo environment cleanup is required as the product resets itself after every use.
- Works on top of existing demo environment or live production product, so time saved is high as the need for SEs to build new environments is limited.
- Can insert data into the live environment, with some manipulation abilities.
Cons:
- Typically has a longer implementation timeline than some of the other tools in this space.
- Recurring configuration may be required for some tools in this category.
Thesis on this subcategory:
This subcategory is where we believe the differentiated value really begins, as technical teams want to use their real products in demonstrations. While companies are solving this problem in similar — yet different — ways, the ability to use the live environment creates trust with both internal and external teams.
Using this subcategory is ideal for mid-market and enterprise companies that spend heavy employee hours managing multiple demonstration environments for different industries and personas. This subcategory is table stakes for any demo automation evaluation.
4. Sandbox and proof of concept software
Software in this category is used to create functional sandboxes and proof of concepts (POCs) that can be sent to leads to either qualify them before a sales call or to let them get hands-on with a product after a demonstration.
These sandboxes/POCs are either 1) created using live product accounts that are preconfigured with data and integrations or 2) created by cloning a product's front- and back-end code.
Where it's best used:
- Consideration/Qualification
- Demonstration
- Proof of Concept/Evaluation
- Retention/Education
- Expansion/Cross-Sell
Roles it's designed for:
- Account Executives
- Solutions Engineers
- Customer Success
Pros:
- Can be used to prequalify leads before they engage with sales.
- Analytics on evaluation usage can be used to provide great insight into how prospects are engaging during an evaluation.
- Environment be shared with the buying committee after a sales call for hands-on evaluations.
- Great for upsell and expansion within the install base.
Cons:
- Access is typically provisioned to individual users versus self-service setup.
- Recurring configuration may be required for some tools in this category.
Thesis on this subcategory:
Sandbox and proof of concept software is the newest and potentially most nuanced subcategory. Software in this subcategory either uses a live version of a product or a product duplicate to allow prospects to test-drive products before purchasing them.
This subcategory is extremely powerful for mid-market and enterprise companies with complex product sets, personas, and demo environments and is very flexible for companies where evaluations are a heavy part of their sales cycles.
Want to understand which demo automation tools fall into which categories? Check out this guide to the best demo automation software.
Evaluating demo automation software: Buyer’s guide
The information below is designed to be a buyer's guide for teams shopping for demo automation software, including KPIs to consider and questions to ask vendors.
Leading KPIs
- Decreased demo preparation time (aggregate and per opportunity)
- Decreased non-customer-facing activities
- Increased ACV with multi-product
- Increased upsell and expansion (pre-selling new products and features)
- Decreased reliance on “demo resource” for BDRs, AEs, and CSMs
- Reduce unqualified pipeline
- MQL conversion
- Increased conversions from visit to trial/demo request
Lagging KPIs
- Increased win rates
- Decreased sales cycle length
- Improved customer experience
- Decreased complexity for proofs of concept and trials
Questions to ask vendors when buying demo automation software
Asking the right questions to vendors is crucial to ensure alignment with your business needs. Here are a few key questions to ask that cover security and compliance, customization and scalability, cost efficiency, and support and maintenance.
- Which use cases are you typically solving for? Which are you not solving for?
- What does implementation and ongoing maintenance look like with your product?
- Security is a major concern of ours. Please explain your security and compliance policy.
- Does marketing or sales engineering typically manage this product?
- What does implementation look like? Which roles are involved from both organizations?
- What type of product and engineering effort is involved in the implementation and ongoing maintenance of this product?
- In what situations does your product not work?
- What happens when we release new products? Explain the ongoing maintenance required.
- When should we expect to see the value and ROI of your product?
- Which of your customers have seen the biggest impact on revenue?
- Which metric is most influenced by your product?
- How many of your customers are quantifying time saved? What does that number look like?
- Can you share your churn percentage?
Emerging opportunities in this domain
The demo automation space is showing some momentum and proving that products in the space have the potential to move from nice-to-have to need-to-have.
According to G2’s recently released “The State of Software,” demo automation has seen the highest traffic of any new category created between September 2022 and September 2023.
However, influenced metrics and KPIs will ultimately be under the microscope in today’s economic climate.
We would be remiss if we did not at least acknowledge the elephant in the room: many of these companies emerged during an era where capital was inexpensive and valuations were high. Unfortunately, the pressure on these organizations to perform is extremely high, and there is a sense that the future is unknown for some vendors.
The TAM of this space is still under scrutiny. While almost every company has a need to showcase the “demo,” selling to solutions engineering professionals is proving to be a blocker. Many of these organizations do not have substantial budgets, thus resulting in budgeting needing to come from marketing or through the head of sales.
We believe that solutions leaders need to be better equipped to build proper business justifications for these products, many of which will ultimately lead to trade-offs of headcount for software in an effort to increase productivity.
Sales leaders will ultimately see that the value of these products has an impact on efficiency and productivity, which we believe will result in accelerated market penetration and organizations having these products as an identified line item in their technology spend.
Where demo automation is heading
In summary, the demo automation space has experienced substantial growth with a surge in vendors, but this has led to heightened buying complexity, a lack of clear differentiation, and confusion about product capabilities and use cases.
The demo automation space is gearing up for an increasingly heated battle among competitors. A number of vendors built in 2020 and 2021 are coming off of large funding rounds, while a new age of seed and series A companies are attacking the problem in different ways.
GTMshift believes the space has increasing momentum between both sales and marketing and will ultimately benefit sales, marketing, and — most importantly — buyers. The increasing technical differentiation between the products will ultimately create separation between vendors.
While there is debate on whether these products are better served for sales or marketing, underlining ownership should live with solutions engineering teams. These teams are typically the owners of demos within an organization and are best suited to create the best user experience; this can be alongside marketing for products that focus on the top of the funnel.
Ultimately, the impacted KPIs are the focus of this space. When does demo automation move from a nice-to-have to a need-to-have? What metrics are actually influenced by these technologies? How will organizations create a budget for this software in an increasingly noisy SaaS environment?
We are still in the early stages of demo automation, but one thing is clear: in a world where buyers have increasingly more power in product purchasing, the demo is ripe for disruption.
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