Extracting Insights From A Competitor's Software Demo

Edited remarks from a presentation at the Silicon Valley Society for Competitive Analysis on Tue-May-24 on “Extracting Insights From A Competitor’s Software Demo.”

Extracting Insights From A Competitor’s Software Demo

You can use competitive insights gleaned from a competitor’s demo in at least four ways

Improve the quality and effectiveness of your demo
Learn how to identify positioning you may need to counter in your messaging and demos
Learn how to identify prospect types or needs you may have overlooked
Translate your competitive insights so the sales and demo teams can use them.

A Demo Offers Specific Capabilities To Solve a Customer Critical Business Issue

We use Peter Cohan‘s definition of software demonstration from his book Great Demo!

“A software demonstration is
the presentation of the set of specific capabilities
needed to solve a customer’s critical business issue.”
Peter Cohan in “Great Demo!“

One definition of a critical business issue is that it’s a goal at risk that may lead you to a failure that will get you fired or a success that will justify a bonus. One of the challenges is that a prospect may mention many challenges they face (or a competitor’s demo may address many potential challenges) that are not in fact a critical business issue.

Where to See Competitor’s Demos

There are three places to see a competitor’s demo that I will cover in this presentation:

Video Recording on Website: this can be the competitor’s website, this can be a webinar recording they have posted or it might be on a site like YouTube or Vimeo.
Live Webinar: this is when you are part of the audience for a live webinar presentation. The key difference here is that you can often can learn what questions the audience is asking that may be cut from the recording.
Trade Show Booth: this is where you are part of the audience for a live demo in a public setting, again you get to hear questions and these are often less scripted or can become more ad hoc in response to questions.

Video Recording on Website

This is the easiest to analyze because you can replay sections several times. It’s also possible to capture and annotate the video using a tool like Camtasia, or to assemble a “greatest hits” or highlights reel to brief others on your team of the most important 3 points or five minutes in what might be a 30-60 minute recording. What you miss, which is often as valuable, are the audience reactions and questions.

Live Webinar

This is often more useful but may be much harder to capture for replay. I tend to take notes contemporaneously so that I can jog my memory later. Sometimes a poll or live question (or text chat question) can offer a lot of insight.

Trade Show Booth

This is often where you can learn the most because you can also listen for the competitor’s discovery process: what questions are they asking you or someone in what is normally a small crowd to diagnose needs and understand what features or capabilities to present. Sometimes a competitor will offer a menu of options to guide the prospect’s ability to tailor the demo, which is something you will rarely see in a recording a webinar but can provide a lot of insight into the range of their capabilities. If you are part of a small crowd you can also more easily pick up on customer interest (when does their body language indicate heightened interest or when do their eyes start to glaze over and they stop asking questions).

Customer’s Description of Their Situation, Problem, or Needs

I gave an example during the talk that because I had been to a SCIP event before and I had listened to the announcements that night I knew that the audience referred to the group as “skip” and did not spell out S-C-I-P when they pronounced the name of the group. This is what we often call a “shibboleth test” a pronunciation of a term of art that indicates you are member of the industry, profession, or group.

For example, if I had said “I’m glad to be at the S-C-I-P Chapter” the audience would have immediately known two things: I haven’t been paying attention for the last 30 minutes because no one else pronounced it that way; this is probably my first time here. Your competitors can also be tone-deaf to their customers’ language. When you’re analyzing a competitor’s demo ask yourself, “Is this their marketing guy bumping chests with our marketing guy?” Or are they actually talking with customers and playing that back, the way the customer talks about the problem.

Some Key Items to Extract

Who is their target customer?
- Job Title – Industry
- Critical Business Issue (CBI)
- Problems/Reasons
- Specific Capabilities
- The Delta – the Value
- Critical Date
What language do they use to describe problem?
How do they talk about needs?
What questions are prospects asking?

Broadly speaking there are three kinds of demos:

Vision Generation: presents a vision of the solution without a lot of detail or proof, designed to elicit interest and normally part of a discovery process. This kind of demo allows you to infer a competitor’s strategic intent.
Technical Proof of Capabilities: normally this is done after discovery or when the market requirements have become well established, the competitors offers specific proof and you can use this to benchmark your offering against theirs.
Information: sometimes is called the standard demo, the informational demo, the museum tour, the harbor tour, where all of this detail is offered. They spread all their watches out on a blanket and say, “What I’ve just given you is an IQ test. Can you figure out how to use this software based on the last hour’s demonstration?” From a competitive perspective this can be useful to get a detailed overview of capabilities.

An Example: An Illustration From a Demo

Title/Industry: Nurse Case Manager
Critical Business Issue: Access on the go
Problems/Reasons: Paper Files / Desktop PC
Specific Capabilities:
- Smartphone Access to Client Files
- Ability to File Reports In the Field
The Delta: 25-35% more cases a day
Critical Date: Not specified (immediate)

This is an illustration from a real demo by DataCare, they offer Worker’s Compensation workflow software. This was the illustration they offered before the live software demonstration. Their promise for a nurse case manager who’s in the field–for example meeting an injured worker at a doctor’s office–and needs access information on the go is that everything that’s in the filing cabinet back in your office is available on your phone. You may have a great desktop system but that does not help you when the worker is late and you need to get a hold of them, or they didn’t bring their x-rays, and the doctor doesn’t have them. Using a tool like this, you can actually look up the worker’s number, and email the doctor the x-rays.

The specific capabilities that this promises the nurse: while you’re still in the field, you’ve got access to all of your client files and you can file reports. Instead of taking two or three hours every night–knocking off at 3:00 in the afternoon–to work on your paperwork, you can do the filing and reporting as you go. This often translates into about 25-35% more cases a day; if you get paid by the case, that’s money in your pocket. No critical date was specified but the implication was that you could start using this immediately and it would reflect in your bottom line.

An Example: An Explainer Video

For this example I would play a phrase or sentence from the explainer video and then outline what competitive inferences you could draw.

“Meet John. John is the general manager of a large hotel.”

That was the name, the title, and the industry, right upfront. If you’re not a general manager of a hotel, the next minute and a half may not be for you.

“A few years ago John wanted to get his operational cost under control and after seeking advice from a consultant…”

Operational cost is the critical business issue. What is the general manager measured on? Is the hotel making a profit on it and how much?

“John decided to make some changes and install more energy efficient lighting, upgrade his air conditioning units in the guest rooms as well as implement a number of other energy saving technologies. The consultant calculated that these technologies would save almost ten percent of the hotel’s annual energy bills. Now a year after all these projects have been completed, John is a bit confused. Looking at his bills from his utility company, John is only seeing a reduction of about 6.3 percent in his annual energy usage. John would like to understand after all this expense, why he’s not seeing the ten percent reduction in energy use he expected.”

Now we learn that the capability sought is to understand why, after John spent a lot of money, why the results have not materialized based on the way he’s analyzing the bills and the spend. John’s worried that maybe they’re not going to renew his contract.

With 101 things to do each day, John does not have the time to look deeper into his energy analysis. There are several things that could affect how much energy John’s hotel was using over the course of the year. The weather was very different this year compared to last year. The occupancy of the hotel is also different this year compared to last year.

Just looking at your utility bills does not take into account these external factors. Luckily John has heard about Verdafero’s Utility Analytics platform from a friend in the hospitality industry and how it might be able to help. John signs up and easily set up an account, added details of his hotel and uploaded his utility billing data into Verdafero’s Utility Analytics platform and within minutes he had his answers. Just taking the difference in weather across the two years into account, John saw that the energy savings were 8.7 percent.

When John also added the analysis for the difference in hotel occupancy, the actual savings were 9.3 percent, not the original 6.3 percent he calculated from his utility bills. Now John is happy that the money he spent doing the upgrades are really paying off and his boss will be happy. Now with Verdafero, John can constantly track, analysis, visualize and report all his utility meters and billing data from his hotel automatically and be alerted to any problems immediately. John now has the power of utility analytics at the touch of a button to help him make the most efficient use of his capital to reduce operational costs, increase net operating income and in the process, increase the value of his hotel.

This is the delta or the impact of the solution: John gets to keep his job, and the consultant probably also gets to keep his job. Compared to a straight forward method of analysis that didn’t adjust for weather, occupancy, or meals served, now they have a more realistic comparison of the before and after.

Those three factors turned out to be about a 3% swing, taking them from 6%, which is about half of the promised savings of 10, up to 9.3, which is close enough to play another year. The other thing Verdafero is doing here is positioning against other utility players that only do the aggregation of the bills and don’t adjust for the transactions, the occupancy, and the meals served. A lot of tools adjust for weather, very few actually model key transactions in the underlying business.

Checklist for Competitive Analysis

Here is a list of things that you might keep track of while you’re watching the competitor’s demo.

Prospect job title and industry
Critical business issue
Problem definition
Specific capabilities / features
Delta / Impact on problem
Critical date or event
Call to action
Language used: customer or vendor?
Baseline or status quo offered (needed to calculate the delta or impact)
Customers questions
Audience engagement techniques
Discovery questions to tailor demo
Tempo: how quickly do they respond to a demo request?
Customer case studies, examples
Benchmarks / Standards
Testimonials
New features: better / faster / cheaper
New features: impossible features (prospect understands what it does but they would say it was not possible).
New features: unthinkable features
What rules of yours are broken?

You should be scanning competitors’ demos on a regular basis: set up a regular cadence to do so–at least every quarter–and track changes over time. Listen for the phrase, “…Our key differentiators…” as these will likely be areas of perceived strength and will be promoted by marketing and sales staff.

Unthinkable Features Break Your Rules

An unthinkable feature is one where a competitor creates a new axis of competition. For example:

Google Docs vs. Microsoft Word: Microsoft did not see the threat because it didn’t seem like it was aimed at them. It was very nice that you didn’t have to email documents around and you had correct changes built in when multiple people collaborate. They thought about putting Word in the cloud but they didn’t see the real axis of competition which was real time collaboration on a document.
TomTom vs. iPhone maps: a hardware company suddenly found themselves competing with a software app on a smartphone. An losing.
Jiao Sports vs. iPhone golf apps: a hardware company solved several hard problems, e.g. the design of a low cost GPS-enabled wearable device pre-iPhone, getting qualified for use by professional golfers in tournament play, and mapping hundreds of golf courses very accurately. But the goal of casual consumer adoption was frustrated by the unanticipated arrival of a GPS equipped iPhone so that the golf functionality was essentially free with the phone.

This is a hard one to detect because you have a frame on the market needs and who your likely competitors are, and you have expectations for how the market is going to evolve. And you are looking at a demo of something that does not seem to make sense. Now a lot of startups have bad ideas or a poorer understanding of the market than yours and your intuition that this new product won’t catch on is correct. Well, a lot of times it is, but, sometimes it’s not. You need to pay attention to which of your assumptions are being broken in the presentation of features or the problem.

Translating Insights Into Action

Great, you have all of this information, how do you translate these insights into actions at different points in your sales and marketing process?

What can be done to improve your discovery process and focus?

Questions for qualification – move beyond BANT (Budget-Authority-Need-Timeline)
Narrow focus to identifying and targeting best customers
What sales situations should you walk away from?
- Increase win rate by focus on high delta
- Avoid “no decision’ scenarios
- Develop Models to help measure your delta (impact / ROI) early
- Yes, No, Number questions
Put more resources where you can promise high impact
Key questions to frame a critical business issue?
For each feature: what question(s) to ask before introducing? How to diagnose need from symptoms?

Do you have a clear set of criteria for determining who your best prospects are beyond BANT? What is the sweet spot(s) for your offering and how do you make sure you are addressing what they view as a critical business issue? If you have a hundred prospects lined up, what are three to six specific questions you can ask that have “yes, no, number” answers that would allow you sort them by the amount of value your solution would offer. Questions that uncover the amount of time and money currently devoted to managing or working around a problem are useful here. As are questions that uncover structural issues in a firm that guarantee the problem will be worse.

Often when you lose a deal you may hear, “They just didn’t see the value.” This is a symptom that you were not working on a critical business issue. They had a problem you could help with, it just wasn’t on the top of the list.

What’s worse than losing? A “no decision.” That’s when they say, “We have decided to live with the problem.” What questions are your competitors asking to frame the need? When you look at your win/loss rate break the losses into two categories: the spent money on a competitor (a true loss) and they spent money on an internal solution or decided to continue to study the problem or live with it (a “no decision”).

One good rule of thumb is to ask a question the ensures a feature will actually be of use, depending upon the answer , before you introduce it. Intermix discovery with presentation. The alternative is to “spread all of your watches on the blanket” and see what they are interested in (otherwise known as “spray and pray” or “show up and throw up”).

Incorporating Findings Into Your Positioning

Look for ways to break the (competitor’s) rules
Break trade-offs competition offers
Break constraints on competitor solutions
What features to introduce into the buying decision that are biased to you?

Now that you understand how your competitor views the problem the trade-offs they offer, what can you do to “break their rules?” This can be by offering software that substitutes for a service, or for existing hardware, or by pricing around units or transactions that are closer to the way that the customer looks at the problem or allows them pay only to the extent that they benefit.

Another way to do this is to introduce a new need or constraint that the competitors don’t provide but which some set of customers will view as intrinsic to the solution. Or to delete a feature or aspect that customers view as unnecessary but which they are forced top pay for.

Incorporating Findings Into Content

Offer a prospect a perspective on their situation and needs
Written content that offers proof of your benefits
- Case studies
- Benchmarks
- White papers
- Relevant third party research
- Curate user group content and presentations
Testimonial quotes (written, audio, video)

The entire qualification process has changed considerably in the last decade or so, where before you get a form fill or demo request prospects have reviewed the material on your website and relevant third party sites. This is also true for your competitors: the demo starts with the website: you can ruled out before they even formally request a demo and the evaluation is already half over before the demo starts.

If you can get your current customers to talk about their results that is likely to do more to convince a buyer than anything you say. That can come at the end of the process in reference checks or can be used to generate inquiries if you publish relevant case studies and testimonials and curate customer content and presentations–obviously either form public content or with their explicit permission.

Incorporating Findings Into Strategy

Niche selection / abandonment
Expanding to adjacent niches
Suite vs. best of breed
What data or content to embed to cut time to value

If you offer a niche solution (or “best of breed”) you need to identify what other niche solutions play well with yours to be ale to compete against a suite. If you offer a suite you need to compete both at the niche feature level and make an argument that your well integrated solution is better than the quilt or Frankenstein monster your competitors will force a customer to live with.

If you and a competitor are addressing different niches and the customer has you in a shoot out (or bake off) then one of you may not belong there–but you should take a hard look at their demos and other information before you rule them out as serious competition or decide not to compete. But ordinarily if the customer is looking at very different niche solutions they have not defined their needs correctly.

Masking Intentions Without Confusing Your Prospects

Menu approach: let the customer drive
Don’t have a “standard demo” beyond two or three key illustrations.
Do more discovery of customer workflow before demo
Present capabilities tailored to their specific needs

These are techniques for limiting how much information you share with the market or can be gleaned by a competitor from your demos. If you zero in on customer needs then you only have to present aspects of your strategy or feature set that are directly relevant. This is a variation on “stealth mode” where instead of saying nothing you stress that you don’t want to waste a prospect’s time and start with discovery to tailor your demo to their needs. This is never a bad idea, but it’s especially important when you are trying mask your strategic intent without confusing prospects–or current customers for that matter–or putting them off.

Avoid the harbor tour: don’t have the standard one hour demo. Instead have a few simple illustrations and have a conversation (a conversation means that both you and customer are asking questions) that continues based on mutual interest. If there’s a CI person on the other end, they have to pretend to be a customer pretty realistically.

Use The Checklist to Get a Perspective on Your Demo

It’s also a good idea to sit through your own demos and cover the checklist to make sure that your presentation is having the impact that you believe that it is. Have new hires use the checklist to provide critique and insights before they “drink the KoolAid” and lose their “newcomer’s eyes.”

Customer perspectives are also useful: if you cannot provide customer substantiation of the claims you make about key features then you may be fooling yourself.

“Every man possesses three characters:
that which he exhibits,
that which he really has,
and that which he believes he has.”
Alphonse Karr in “A Tour Round My Garden” (1855)

This Topic Remains a Work in Progress

We spend a lot of time doing competitive analysis of demos for our clients: this topic remains a work in progress for me. I gave my first software demo in 1982 and continue to revise and improve my approach every year.

My collaboration with Peter Cohan of “Great Demo!” has been incredibly helpful over the last decade. I am also indebted to Alok Vasudeva of The Marketer’s Continuum for suggesting the topic and inviting me to speak at the Silicon Valley Chapter of the Society for Competitive Intelligence. This article is based on that presentation.

I welcome any feedback or suggestions for improvement: you are welcome to leave a comment or contact me directly.

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Extracting Insights From A Competitor’s Software Demo