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Demonstration Post-Mortem: Why Vendors Lose Deals

Written By: Steve McVey
Published On: January 1 2005

Introduction

Large software vendors seem to have many advantages over smaller vendors. Vast financial resources allow them to develop and market a slew of complementary applications (either from integrated suites or through extensive partnering), leverage well-trained consultants for implementations, and deliver global support services twenty-four hours a day. Smaller vendors are often relegated to a narrow industry or functional niche, have fewer alliances, and are severely limited by geography. The Internet has leveled the playing field somewhat in building brand awareness, but the big vendors win here as well by virtue of larger advertising budgets. In business as usual, these shortcomings give smaller software companies little hope of outdistancing their larger adversaries.

As inequitable as this may seem, there is one area where smaller vendors can achieve an edge: scripted scenario demonstrations. Users who follow due diligence in selecting a new ERP or SCM system require shortlist vendors to illustrate how well their software performs on user-supplied business scenarios. Demonstrations can be grueling, for both vendors and users, but are the only way to discover how a product behaves under real world expectations before a contract is signed.

Vendors of all sizes agree to participate in demonstrations but the larger ones tend to do so with less enthusiasm than others. For example, a vendor like SAP is often chosen because of its reputation, something that can be reinforced by a half-day marketing presentation followed by some free coffee mugs. With prospects so eager to become SAP shops, why should SAP want to slog through preparing a scripted scenario demonstration? In contrast, smaller vendors tend to be grateful just for the opportunity to compete toe-to-toe with the SAPs and Oracles of the world.

Regardless of its size and market dominance, a vendor that makes it to the demonstration stage begins with a clean slate, an even playing field where it succeeds or fails based on its performance. In the vast majority of cases, one factor makes the difference. One failing makes the best in the business as vulnerable to disaster as the little guys. What is this great leveler among enterprise application vendors? Lack of preparation.

Be Prepared

Lack of preparation is painfully obvious to clients, who downgrade performance scores for the vendors accordingly. Few things frustrate clients more than listening to presales consultants jabber on and on about an "amazing" piece of functionality without ever showing how it works. This is especially true when the functionality wasn't requested in the scripts. Many presenters seem to believe that all it takes to convince clients their product works is a wink and a smile. What they fail to consider is the client's desire to see how the product works. The most often asked question following a bad demo is "why?": Why didn't the vendor understand our business scenarios? Why did they ask us questions they should've asked weeks ago during their "preparation?" Why was the presenter as lost as we were? Why did we have to sit here for eight hours and waste our time?

The three most common symptoms of poor preparation follow:

  1. Demonstrations are not exactly sales opportunities

    Of course, any time spent before a potential client is an opportunity to dazzle them, but vendors often view demonstrations as just another "dog and pony show". Vendors who make this mistake try to steer the presentation away from the scripts toward canned slides that address issues of only high-level interest to the user. Easygoing audiences may sigh and let it pass but usually users start objecting and demand strict adherence to the scripts. Vendors that fail to straighten up are decimated in the final score tally.

    Bottom line: Users perceive canned presentations as substitutes for true preparation and score accordingly.

  2. Too much "tell", not enough "show"

    Those vendors that do read the scripts before demonstration day and sidestep the canned presentation trap are still prone to this common failing: talking about features instead of showing them. The excuse many vendors use is overly long scripts with insufficient time to show everything. What users see is that vendors have not prepared the necessary data files to show the scenarios as requested. In addition, vendors seem compelled to chat up every button and drop-down box on every application window, regardless whether the client asked to see them. The vendors fail to understand that no points are awarded for extra-curricular demonstration. In short, they are talking at their own expense.

    Bottom line: A picture is worth ten thousand words. In the time it takes to explain how to do something, vendors could show it and earn smiles of satisfaction from the audience.

  3. Inexperienced Presenters

    Vendors that read the scripts thoroughly, ask follow-up questions before the demonstration, and prepare sample data are still not out of the woods. Failure to prepare for a demonstration by choosing inexperienced presenters can negate the diligent efforts of dozens of highly trained staff. Users spot immediately when a presenter is unfamiliar with the product, scenarios, or both. For vendors, this is the most difficult failing to avoid since turnover rates are high and demonstrations involve extensive time and travel for their employees. In addition, sometimes users ask to see the latest version of the product, one that was released one week prior to the demonstration. The staff in this case can be expected to stumble now and then in navigating the new application. Nevertheless, the effect of inexperienced presenters on users is dramatic: most users become extremely angry that the "best and brightest" were not assigned to their account and lower their scores in response.

    Bottom line: Although sometimes unavoidable, inexperienced presenters take their toll on vendor performance scores.

Summary

Even large, successful enterprise software vendors can fail miserably when it comes to product demonstrations. Lack of preparation is the usual culprit, but vendors are not entirely to blame. Users can be instrumental in helping vendors prepare sufficiently so that no one's time is wasted.

Suggested guidelines include

  • After delivering the scenarios to the vendors and discussing them, be available for follow-up questions should they arise.

  • Remove as much jargon as possible from the scenarios and try to stick to industry standard terminology.

  • Explain how important it is for the best people to present your scenarios and ask to see candidate resumes.

  • For larger, multi-day demonstrations, give vendors at least four weeks to prepare.

  • About a week before the demonstration is to take place, call the vendor and ask pointed questions about how the preparation is progressing. Ask vendors to explain how they will show a scenario of interest.

  • Minimize the amount of time allotted for marketing pitches; these are rarely of use at this stage of the selection.

A diligent approach to preparing scripted scenario demonstrations by both parties will ensure that vendors shine and users obtain the insights they need to make a decision.

 
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