How do SMBs 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. As part of the ritual of examining local commerce and SMB Saas strategies, Localogy goes right to the source: SMBs themselves. Localogy’s SMB survey uncovers the role played by cloud-based tech providers such as Square, Gusto, or Stripe.
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 SMBs’ feelings on live sales reps last week, we switch gears to look at our SMB survey data to find their preferred places to buy operational software.
Specifically, when the need arises for a given software function. SMBs often prefer using existing software vendors. But when those vendors don’t have offerings that meet those expanded needs, where do SMBs turn? Do they prefer dealing with cloud tech providers? ISPs? wireless carriers? banks?
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 the SMB survey.
– The leading place where SMBs surveyed prefer to purchase new software is cloud-based tech providers such as Square, Gusto, or Stripe.
– This sentiment was dominant in the MCM survey, with 51 percent of respondents. The next highest response was 15 percent.
– This dominant sentiment among SMBs is likely due to the perceived tech competency of cloud software providers, versus other entities on this list, such as banks and carriers.
– Scores further down the survey list were fairly evenly matched including internet service providers (ISPs).
–This can often represent bundling opportunities that offer an administrative convenience to SMBs, given that nearly all SMBs have an existing ISP relationship.
– Though this convenience factor resonates, it’s clearly not as important as tech competency, as ISP-delivered SaaS trails so far behind cloud-tech vendors.
– Tied for third place on this list were advertising and marketing service providers (10 percent) and accounting firms (10 percent).
– These both can offer the convenience factor noted above in cases where SMBs have an existing business relationship. But again, tech competency is relatively low with these entities.
– Bringing up the rear, other low scorers on this list include wireless carriers (8 percent) and business banks (5 percent).
– These scores are likely due to the red tape and antiquated systems that these entities are known for. Contrast this with the streamlined online account management systems of cloud-native players.
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 as the Localogy SMB survey uncovers.
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 SMB 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.
