SMB Website and Single Source SaaS Preference

SMB SaaS Survey

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) answers these website dynamics questions across SMB SaaS, which we preview in this Benchmark Bytes series. After examining SMBs’ preference for where they buy their software, we expand into the topic of how many vendors they typically work with.

In other words, when being sold software for various operational needs, are SMBs piecing together disparate best-of-breed software into a customized mix that fulfills their unique goals? Or do they prefer a one-stop shop where all the pieces may not be best of breed, but a single source breeds convenience?

Localogy members can access full charts and SMB survey reports. Non-members can purchase reports

Data Dive

Going deeper, a few insights jump out from these figures.

– When evaluating the number of vendors that SMBs work with, the most popular segment (35 percent)  works with five or more vendors.

– This is down from 37 percent in Wave VI but up from 28 percent in Wave V.

– After that, the second most popular group (31 percent) works with 3-4 software vendors. This is followed by 1-2 software vendors (25 percent) and zero software vendors (9 percent).

– Overall, the trend seems to be moving towards more vendors. SMBs working with fewer vendors has declined over three survey waves while vendor quantities at the higher end has grown.

– This could represent the ongoing growth in tech savvy among SMBs. Indeed, it’s harder to bring together software from several vendors, as opposed to working with just one.

– But that difficulty level has a payoff: Often it’s more effective to assemble various software from different providers, given that you can cherry-pick the best software for a given function.

– This advantage also requires integrations to be in place. If disparate software systems don’t have built-in integrations or APIs, the several-vendor advantages deteriorate.

– As for the advantages of the one-stop-shop approach, it’s basically the inverse of the multiple-vendor approach.

– It’s convenient from a billing and administrative perspective to use a single source. And there are natural integrations and interoperability between different operational functions.

– However, this applies a lowest common denominator approach, taking away the ability for SMBs to shop around for the best software for a given function.

– This often comes down to a “Jack of all trades… master of none” dynamic

– There’s no one-size fits all answer and it usually comes down to the needs of an individual SMB website. Plus the SMB’s time & ability to manage software integrations.

– Though it’s a toss-up, the SMB universe seems to be moving towards more software vendors. A trend supported  by three waves of survey data.

SMB SaaS Use and Purchase Trends, October 2021

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. Stay tuned for more breakdowns in our Benchmark Bytes series.

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