As part of the ritual of examining local commerce and SMB Saas strategies, Localogy goes right to the source: SMBs themselves. How do they feel about marketing and operational software? What features do they want? And how has their hunger changed during a global pandemic that has hit local businesses hardest?
Localogy’s Modern Commerce Monitor (MCM) wave 6.1 answers these and other questions across the SMB SaaS product set, which we preview in this Benchmark Bytes series. After the last installment examined SMB’s biggest reasons for adopting online services, we switch gears this week to examine the reasons they don’t.
The top reason was the feeling that “if it isn’t broken, don’t fix it” with 46 percent of responses. Close behind at 45 percent comfort with the tools currently deployed. 34 percent of SMBs say that they’re unaware of new digital solutions and 28 percent say that online services aren’t relevant for them.
Meanwhile, 24 percent state they’ve had bad experiences with new technologies. 22 percent say that the companies or tools they’re currently working with are stable or well established. And 21 percent cite cost as an adoption barrier. These data were gathered in January and February so have some Covid-influence.
Localogy members can access full charts and SMB survey reports.
What Does it All Mean?
Going a bit deeper, a few things jump out at us:
— As noted, the top SMB reason for not adopting new digital services is the feeling that “if something isn’t broke, it shouldn’t be fixed” (46 percent). This was not only the top answer but one that grew significantly from wave V (31 percent).
— That, plus the feeling that they’re comfortable with what they’re currently using (45 percent), signals habitual tendencies.
— This can often impede progress for SMBs, and stands as the biggest current challenge for SMB digital services and SaaS providers.
— This result was somewhat surprising (especially the growth from wave V), given all the talk over the past year of “accelerated digital transformation.”
— Unawareness of new digital offerings also ranked high at 34 percent of responses, signaling that SMB education is needed. This likewise stands as a challenge for SMB SaaS providers, as you never want to have to educate your target market.
— Other top movers in these results include “It’s not relevant for my type of business,” growing from 16 percent to 28 percent over the past survey wave.
— Conversely, there was movement in the other direction for privacy/security concerns, which dropped from 36 percent in Wave V to 14 percent in Wave VI.
— This could signal greater trust in digital technologies, which is a good sign given that security concerns are (another) inherent challenge in selling digital services to SMBs.
Time to Shine
Stepping back, SMB online services adoption tracked by MCM continues to grow rapidly. SMB SaaS startups and online services providers are correspondingly thriving with exit velocity, funding, and public-market performance. SMB SaaS is becoming a leading subsector of the broader SaaS universe.
Meanwhile, new SMB SaaS users (despite those represented above) could represent permanent adopters — a concept that’s accelerated in the Covid era as SMBs are forced to accelerate their digital transformation. This sends them into the arms of SaaS providers to accomplish a range of operational and marketing functions.
We’ll return in the next installment to go deeper on other pandemic-driven areas of SMB technology adoption. That will include top goals and what types of SMBs are adopting. Let us know what additional insights jump out at you from the above data, and stay tuned for more breakdowns in our Benchmark Bytes series.
