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 in a pandemic? This is all a moving target.
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 examining how many SMBs adopt online services last week, we shift gears to zero in on the types of SaaS they’re buying.
Specifically, the leading category for SMB SaaS adoption is finance and operational solutions with 67 percent of respondents adopting. That’s followed by marketing and advertising solutions (54 percent) CRM (53 percent), payroll and HR (51 percent), and supply chain services (46 percent).
Localogy members can access full charts and SMB survey reports. Non-members can purchase reports.
Data Dive
Going deeper, a few other insights jump out at us from these figures.
– Finance and operations’ lead in software spending isn’t surprising, given the rise in fintech over the past few years.
– Furthermore, finance software is a universal need, as is operations software. These categories have the largest total addressable market of any SMB SaaS functional areas.
– These are also core operational needs for any business, as opposed to less mission-critical (though still important) functions like marketing.
– Speaking of marketing, it came in second place among all software categories. It has also grown 35 percent from Wave 5 of the research in January 2020.
– This period of time reflects Covid-era dynamics, suggesting that local marketing has been an imperative during the pandemic to drive scarcer than normal levels of foot traffic.
– Next up in the rankings is CRM, which relates to marketing in terms of better management and outreach to existing customers.
– This has likewise been an additional push during the pandemic to maintain relationships with customers and keep them informed of dynamic business attributes (think: hours, mask policies, etc.).
– Among all areas of SMB spending, supply chain services have grown the most since Wave V in January 2020.
– This need has been heightened by the supply chain challenges of the Covid era, not to mention the more recent headwinds in global supply chains.
– Similarly, payroll and HR software is a priority for many businesses.
– This may be exacerbated by the great resignation, in terms of having smarter software and capabilities to optimize a sometimes-diminishing workforce.
Time to Shine
Stepping back, SMB online marketing – website-based or otherwise – continues to grow rapidly. SMB SaaS startups and online services providers are correspondingly thriving as it continues to grow as a leading subsector of the broader SaaS universe. There’s a long-tail opportunity at play.
Meanwhile, new SMB SaaS users could represent permanent adopters – a concept that’s accelerated in the Covid era as SMBs are forced to boost their digital transformation. This sends them into the arms of SaaS providers to accomplish a range of marketing and operational functions.
We’ll return in the next installment to go deeper into Localogy original survey research. That will include SMB goals and success factors. 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.
