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 SMB SaaS, which we preview in this Benchmark Bytes series. After examining the importance of freemium pricing models last week, we switch gears to look at SMBs’ level of engagement in Saas.
Specifically, how engaged are they after they’ve purchased? 43 percent used new software extensively, but that usage tapered off over time. For 38 percent of respondents, it’s just the opposite… usage was slow at first but then grew over time. 13 percent use SaaS heavily on a consistent basis.
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Data Dive
Going deeper, a few other insights jump out from these figures.
– It’s not surprising that the leading SMB behavior is to use recently-procured software heavily and then taper off.
– This is common behavior, given that SMBs are time-starved and tend to stray from certain activities unless considerable discipline is exercised.
– However the opposite behavior – usage that starts slow then ramps up – is a close second.
– In fact, these two top results are basically a tie, considering the survey margin of error.
– Among these two top results, the more favorable outcome for software providers is the second: SMB usage that starts slow and then ramps up.
– Though not ideal initially, this behavior involves sustained SMB software usage.
– This engagement is important to SMB Saas providers because engaged SMBs tend to keep their software subscriptions in place.
– Non-engaged SMBs have a greater chance of churning.
– After those two top results, there’s a steep dropoff, then a nominal quantity of SMBs (13 percent) that have consistently engaged from the beginning.
– This is the best of both worlds for SMB Saas providers, and its low score is a signal for initiatives to boost engagement.
– To support or incentivize this behavior, Saas providers can work on better onboarding tools to get SMBs hooked on a given software product while it’s fresh on their minds right after purchase.
– A small minority of SMBs (6 percent) have never used a product after purchasing.
– This is obviously suboptimal, and is subject to high churn.
– However, it’s possible that some of these respondents have delegated software use and management to employees, hence never using it themselves.
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.
