diff --git a/README.md b/README.md
index 559c130..05deeb8 100644
--- a/README.md
+++ b/README.md
@@ -26,12 +26,29 @@ views or other methods should be running in demo mode.
 ```python
 from drf_simplepermissions import is_demo
 
-if is_demo(User, demo_group='demo'):
+if is_demo(User):
   # We should run in demo mode when the user is in 'demo'
 ```
 
-You can override enable demo mode globally by adding `DEMO = True` to your
-application's `settings.py`.
+# Settings
+
+Settings can be managed in `settings.py`.
+
+## DEMO
+
+Global demo mode can be enabled by changing `settings.DEMO` to True. If
+it's set to False you can override it by adding users to a group. You
+can't override `settings.DEMO` when it's set to True. When global demo
+mode is set to true, all users no matter their group membership will be
+considered demo users.
+
+## DEMO_GROUPS
+
+`settings.DEMO_GROUPS` contains a string or a list of groups that should be
+considered demo users. It will try to match against any group and if a match
+is found, it will return true. It is set to 'demo' by default. Groups are
+not managed by this module and should be added manually or with a custom
+migration.
 
 # Installation
 
diff --git a/drf_simplepermissions/permissions.py b/drf_simplepermissions/permissions.py
index 7f43733..403a3fa 100644
--- a/drf_simplepermissions/permissions.py
+++ b/drf_simplepermissions/permissions.py
@@ -23,10 +23,10 @@ def has_permission(self, request, view):
         return False
 
 
-def is_demo(user, demo_group='demo'):
-    '''is_demo checks if a user is added to a demo group or groups. If a
-    list of groups is supplied, it will try to match against any group and
-    if a match is found, it will return true.
+def is_demo(user):
+    '''is_demo checks if a user is added to a demo group or groups. It will try
+    to match against any group and if a match is found, it will return true. It
+    uses `settings.DEMO_GROUPS` as its source to check against.
 
     Global demo mode can be enabled by changing `settings.DEMO` to True. If
     it's set to False you can override it by adding users to a group. You
@@ -41,6 +41,8 @@ def is_demo(user, demo_group='demo'):
     except NameError:
         basestring = str
 
+    demo_groups = 'demo'
+
     if hasattr(settings, 'DEMO'):
         if not isinstance(settings.DEMO, bool):
             raise SimpleModeException('DEMO {0} is unsupported'.format(
@@ -50,11 +52,14 @@ def is_demo(user, demo_group='demo'):
         if settings.DEMO:
             return settings.DEMO
 
+    if hasattr(settings, 'DEMO_GROUPS'):
+        demo_groups = settings.DEMO_GROUPS
+
     if isinstance(user, User):
-        if isinstance(demo_group, basestring):
-            return user.groups.filter(name=demo_group).exists()
+        if isinstance(demo_groups, basestring):
+            return user.groups.filter(name=demo_groups).exists()
 
-        if isinstance(demo_group, (list)):
-            return user.groups.filter(name__in=demo_group).exists()
+        if isinstance(demo_groups, (list)):
+            return user.groups.filter(name__in=demo_groups).exists()
 
     return False
diff --git a/drf_simplepermissions/tests/test_permissions.py b/drf_simplepermissions/tests/test_permissions.py
index 82085dd..6ef4120 100644
--- a/drf_simplepermissions/tests/test_permissions.py
+++ b/drf_simplepermissions/tests/test_permissions.py
@@ -90,23 +90,26 @@ def test_demo_group_default_name(self):
         group.user_set.add(self.user)
         self.assertEqual(is_demo(user=self.user), True)
 
+    @override_settings(DEMO_GROUPS='foobar')
     def test_demo_group_custom_name(self):
         group = Group.objects.create(name='foobar')
         group.user_set.add(self.user)
-        self.assertEqual(is_demo(user=self.user, demo_group='foobar'), True)
+        self.assertEqual(is_demo(user=self.user), True)
 
+    @override_settings(DEMO_GROUPS='foobar')
     def test_demo_group_custom_name_with_default_group(self):
         group = Group.objects.create(name='demo')
         group.user_set.add(self.user)
-        self.assertEqual(is_demo(user=self.user, demo_group='foobar'), False)
+        self.assertEqual(is_demo(user=self.user), False)
 
+    @override_settings(DEMO_GROUPS=['group1', 'group2'])
     def test_demo_multiple_groups_true(self):
         groups = ['group1', 'group2']
         for group_name in groups:
             group = Group.objects.create(name=group_name)
             group.user_set.add(self.user)
 
-        self.assertEqual(is_demo(user=self.user, demo_group=groups), True)
+        self.assertEqual(is_demo(user=self.user), True)
 
     @override_settings(DEMO=False)
     def test_demo_mode_for_global_false_but_user_in_demo_group(self):
@@ -114,9 +117,9 @@ def test_demo_mode_for_global_false_but_user_in_demo_group(self):
         group.user_set.add(self.user)
         self.assertEqual(is_demo(user=self.user), True)
 
+    @override_settings(DEMO_GROUPS=type('demo_group', (), {})())
     def test_demo_group_unsupported_object(self):
-        unsupported_group = type('demo_group', (), {})()
-        self.assertEqual(is_demo(user=self.user, demo_group=unsupported_group), False) # noqa
+        self.assertEqual(is_demo(user=self.user), False) # noqa
 
     @override_settings(DEMO='foo')
     def test_demo_group_unsupported_demo_mode(self):