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 how SMBs utilize SMB Saas features last week, we switch gears to examine the channels through which they purchase.
Specifically, the most popular channel to purchase software is directly on a provider’s website (37 percent). That’s followed by online marketplaces (22 percent), sales rep solicitation (16 percent), local marketing agencies (10 percent), and intermediaries like a lawyer or accountant (6 percent).
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Data Dive
Going deeper, a few other insights jump out from these figures.
– It’s telling that the top purchase channel is directly on a given vendor’s website, a self-serve orientation
– The second most popular channel (online marketplaces) likewise represents a self-serve format.
– This is a sign of the times in terms of the degree to which SMBs have gotten comfortable with self-serve software sales.
– SMB services (especially advertising and marketing) have traditionally been sold rather than bought… but that appears to be changing.
– Indeed, local sales rep solicitation is now third on the list of most popular SMB Saas procurement channels.
– This is partly a function of digital native SMB proprietors and increasing self-sufficiency and tech-savvy.
– It’s mildly surprising that local marketing agencies are so far down the list at 10 percent.
–However, this is likely a function of the relatively low share of overall SMBs that use agencies to begin with.
– Intermediaries like lawyers and accountants also show up further down the list but are nonetheless an untapped opportunity for SMB Saas sales
– Affiliate programs can be established and cultivated to mine this opportunity more extensively
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.
