Online demos cost less and generate more revenue than CDs and downloads

 One item that all software marketing professionals must include in their marketing is a demo of their software.  It’s impossible to compete, or even show potential customers what your software does without a demo.  Some marketers have a good idea of what their demos contribute to their bottom line, some have no clue and just consider demos a cost of doing business.

It doesn’t have to be this way – software demos are a valuable software marketing resource and not all demos are created equally.
 
Ask yourself – do you really know what your demos cost you and how much revenue are they generating for you?

I’ve done some research to find out how much it costs to produce and deliver trial CDs, downloads and TestDrive online demos.  I chose these demo methods because CDs and downloads are the most common form of software demo and the cost is easy to evaluate.  I’ve used actual numbers from real producers/service providers to come up with the software demo cost.

To provide the conversion rates, I’ve used real Runaware online demo customer data and recorded conversion rates to compare how the different demos perform.  Keep in mind that these numbers are not set in stone and will vary by company but are actual observed numbers from our online demo clients.

We based our numbers on providing an average of 1,000 demos per month for a year for a desktop software package that sells for $150.

 

	CDs	Downloads	Online Demos
Production cost/CD	$0.98	$0.00	$0.00
Mailing Cost/CD	$2.75	$0.00	$0.00
Cost/Download	$0.00	$3.45	$0.00
TestDrive Setup	$0.00	$0.00	$5,000.00
TestDrive Hosting	$0.00	$0.00	$1,500.00
Cost/Demo	$3.73	$3.45	$1.92
Cost/Month	$3,730.00	$3,450.00	$1,500.00
Annual Cost	$44,760.00	$ 41,400.00	$   23,000.00
Average Conversion	5%	8%	14%
Annual Revenue Generated	$90,000.00	$144,000.00	$252,000.00
ROI	201%	348%	1096%

 While it may appear that the initial cost of an online demo is more, over the year it’s shown that online demos are less expensive per demo and cost less to provide overall.  In addition, the higher conversion rate of online demos leads further improves the ROI by generating more revenue.

One added benefit of incorporating online demos into your marketing is the account management that you receive from experienced marketers that help increase your conversion rates by using a proven customer profiling and lead capture system and improve the customer experience using best practices – ensuring a higher return.

Online demos are best used to augment other demos being offered, giving your consumers a choice and providing squeezing more value out of your other software demos.

Do you know how much your demos cost and what they are contributing to your ROI?  Do these numbers surprise you?