Every week, someone books a call with us and says "we need an explainer video." Five minutes into the conversation, it's clear they actually need a demo video. Or vice versa.
These two formats get conflated constantly, and the confusion costs SaaS companies real money. Let's fix that.
The core difference
Explainer video: Sells the problem. Establishes why your product needs to exist. Targets people who don't know about you yet. Lives at the top of funnel.
Product demo video: Sells the solution. Shows how your product works. Targets people who already know about you and want to evaluate. Lives at the bottom of funnel.
That's it. Everything else flows from this distinction.
When you need an explainer video
You need an explainer if:
- You're launching a new product or entering a new market
- Your product solves a problem people don't know they have
- You need to build awareness before you can sell
- Your homepage needs a hero video that captures attention
- You're running paid ads to cold audiences
An explainer video's job is to make someone care. It should never start with your product. It should start with the viewer's world — their frustration, their aspiration, their unmet need — and then reveal your product as the answer.
The best explainer videos don't explain anything. They tell a story that makes the explanation unnecessary.
When you need a demo video
You need a demo if:
- Prospects are visiting your site but not converting
- Your sales team is doing the same product walkthrough on every call
- You have a free trial but activation rates are low
- Your product has a complex UI that needs visual guidance
- You're comparing features against competitors
A demo video's job is to reduce friction. It should answer the question "how does this actually work?" in a way that's faster and more compelling than reading documentation.
The best demo videos don't feel like tutorials. They feel like watching someone effortlessly accomplish the thing you've been struggling to do.
The mistake most companies make
Most SaaS companies make their first video a hybrid — half explainer, half demo — and it fails at both.
It starts with 30 seconds of "managing projects is hard" (explainer territory), then cuts to 90 seconds of clicking through the interface (demo territory). The viewer who needed the emotional hook got bored during the screen recording. The viewer who wanted the demo was annoyed by the 30-second preamble.
Pick one goal per video. If you need both, make two videos. They'll each perform better than one confused hybrid.
The production difference
Explainer videos benefit from:
- Cinematic production and visual storytelling
- Metaphorical imagery and emotional hooks
- Distinctive art direction that sets you apart
- Short runtime (30-90 seconds)
Demo videos benefit from:
- Clean, focused screen recordings or UI animations
- Clear narration that guides without patronizing
- Logical flow that mirrors actual user workflows
- Longer runtime is fine (2-5 minutes) because the audience is already interested
The budget allocation
If you have budget for one video type, here's the decision framework:
Choose explainer first if: You're pre-product-market-fit, launching, or struggling with awareness. No point optimizing conversions on traffic you don't have.
Choose demo first if: You have traffic but poor conversion rates. People are finding you but not understanding what you do. The demo will have immediate, measurable impact on signups.
If you can afford both: Launch with the explainer. Build the demo 30 days later. Use the explainer to drive traffic, then use the demo to convert it.
The companies that grow fastest with video aren't the ones with the biggest budgets. They're the ones who understand which video goes where — and never confuse the two.
