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 top benefits SMBs realize from online services last week, we switch gears to tackle how well they utilize those services
Specifically, 55 percent report not utilizing the full range of features in the software they license. Top reasons include feature mismatch (32 percent), more training required (21 percent), intention to utilize software features soon (19 percent), and the need to integrate other supporting tech (13 percent).
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Data Dive
Going deeper, a few other insights jump out from these figures.
– It’s telling that more than half of SMBs aren’t even utilizing the full capabilities of the operational software that they license.
– If you add respondents who reported “not sure” (basically a “no”) the share of SMBs that aren’t using SMB SaaS full capacity grows to 67 percent
– This stands to reason, given well-known time management challenges for SMB proprietors.
–As for SMB reasons for not utilizing the full capacity of their software, product/market fit was the most prevalent response.
– This indicates that there’s some software bloat and feature creep for some functional offerings (e.g., payroll, CRM, marketing platforms).
– For that reason, SMBs not utilizing the full range of these offerings is to be expected.
– It’s also encouraging that 19 percent of SMB respondents have every intention of expanding their utilization of SMB SaaS. The only reason they haven’t so far is that they haven’t gotten around to it.
–As with all aspirational survey responses, this should be taken with a grain of salt, as aspiration doesn’t always translate to action (especially with busy SMBs).
–The rest of the responses fall into the broader category of having dependent/gating factors, including needing training or other supporting technology to be applied first.
–These holdups are to be expected, but software vendors that can best reduce friction from these requirements, such as onboarding and training, can alleviate a common SMB pain point.
– If vendors can pull this off, the reward is greater SMB retention and lifetime value, as greater utilization of software functions correlates to perceived ROI.
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.
