Donald Light has been in the room for hundreds of product demos as insurance software vendors try to convince carriers why the carriers should select their product. Light, director, Americas, in the property/casualty practice for the consultant and advisory firm Celent, has seen more than his fair share of disastrous demos and has detailed some of them in his latest report.
“I was involved in vendor screening for this global initiative,” he recalls. “The vendor must have had a team of eight different people there, which is a lot of head count in one room for a demo. We had no idea why at least half of them were there. Notwithstanding all those people, the vendor to a large degree ignored what the insurance company had said they wanted to see in the demo.”
Experiences such as that led Light to write the tongue-in-cheek report: “How to Give a Really Bad Demo.” In the report, Light lists the 10 “worst” practices he has seen based on actual experience.
“Essentially, everything in that report actually has happened,” he says. “Fortunately, not all of them happened in a single demo.”
Light has more than once felt puzzled by the poor job vendors have demonstrated.
“Carriers want to end up with a new system that will make them a more successful insurance company,” he says. “How can you structure your demo to reflect that? That is where vendors are missing a huge opportunity in how they create the demo and how they present the demo.”
When a vendor visits a carrier’s office to present a demonstration, the carrier isn’t looking for what Light calls “a dog and pony show.” The company has already gone through several steps in the selection process and the demo is almost always after the RFP.
“At that point the insurer or an analyst will say to the vendor here are 10 or 20 specific things they want to see from the vendor—processes, capabilities, business environments, IT environments—and demonstrate what happens, how [the system] is automated or how work is kicked out of an automated processing cycle,” he says.
Vendors have been known to take the lazy route, using their standard, off-the-shelf demo that may hit some, but certainly not all of the specific points the carrier is seeking answers to.
“Is that a good way to sell your system?” Light asks. “No. Does it take the insurance company’s request seriously? No. Does it hurt the vendor? Yes.”
Seeing a complete meltdown by the vendor is unusual, according to Light, who estimates it may happen in 10 to 15 percent of the vendor demos he has witnessed.
Not being responsive to each and every part of what the insurer has asked the vendor to present is much more common. Light estimates that happens approximately 50 percent of the time.
“Maybe they are responsive to 17 or 18 out of the 20 requests, but they ignore the other three,” he says. “Or, of the 20 things they are being asked to demonstrate, they kind of blow it on a few of the requests. Demos, per se, don’t call for the business value of your underwriting system, but it ought to be obvious to everyone that the insurance company wants to acquire a system that has business value. Hitting the business value theme is probably where over half the demos fail.”
Presenting a good demo can improve the vendor’s position in the eyes of the carrier, according to Light.
“One thing we always tell insurance companies we work with is don’t be a slave to the numbers,” he says. “The RFPs come in and the insurer scores them and then ranks the systems. You can’t capture all the dimensions in what is going to be a long-term business relationship through scoring. You have to listen with your heart and your gut to determine what’s going on. A good demo provides a tremendous opportunity to improve the company’s view of the vendor and the solution they are trying to get the carrier to license.”
Here is what Light has determined are the 10 “worst practices” that vendors should not try and emulate if they are lucky enough to reach the demo stage in the sales process:
- Don’t try to understand the insurance company.
- Give the same demo you always give.
- Don’t waste time convincing the insurer that you are a good, long-term partner.
- If you get a hard question, don’t answer it.
- Business value? Don’t even go there.
- Spend as much time as possible in the business user environment.
- Don’t demonstrate the current version.
- Don’t give people a chance to understand new scr3eens.
- Don’t tune your demo for the insurer’s presentation environment.
- Don’t repeat questions or answers for anyone on a conference line.