Rule Number One - Establish a Demo agenda:

From a communication perspective this:

• Sets a vision with the prospect that you are organized and professional.
• Sets the stage for what you are going to discuss.
• Communicates an estimate of the length of the meeting to show you are cognizant of the importance of their time.
• Allows you to check-in with the prospect to make sure you are going to cover everything he/she hopes to accomplish.
• Allows you to create a vision for what you want to accomplish.

From a process perspective this:

• Should start with a first bullet that allows you to take a few seconds to confirm the prospect's pain, reiterate the conversations you've already had with them. Things may have changed and you may have additional participants in the meeting that aren't up to speed.
• Forces you to stay on track.
• Allows you to control the meeting. If the prospect brings you off track, you are able to say something like "keeping with the agenda, I'd like to continue discussing xxxxx".
• If you are nearing the end of the meeting, but would like to continue, you should always get the prospect's agreement before you proceed. This is not only courteous but also serves as a qualifier to see how engaged in the process they are.
• Should always end with this bullet "Determine Next Steps". This documents the fact that both you and the prospect have committed to defining what the next steps in the process should be.

So, hope this helps. Lots more to come in the future on how to deliver effective demos. Stay tuned!