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’ preferred number of software vendors, we switch gears to look at their actual behavior in this area.
In other words, though SMBs say that they prefer one-stop-shop software vendors for a range of operational needs, how many are actually doing this? Indeed, like many SMB sentiments in this and other surveys, limiting software vendors to just one is challenging and fairly aspirational.
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Data Dive
Going deeper, a few insights jump out from these figures.
– As we examined last week, the vast majority of SMBs surveyed (78 percent) prefer to work with just one software vendor for all their SaaS needs.
– 21 percent conversely prefer to work with several vendors to have the freedom and flexibility to cherry-pick the best software across functional areas.
– These results stand to reason, as SMBs are famously time-starved and tech challenged. Working with just one vendor alleviates some of these common challenges.
– However, as is sometimes the case with survey sentiments, these stated preferences are highly aspirational.
– We say that simply because the number of SMBs that actually work with just one software vendor is far fewer than the number that say they want to.
– Specifically, 36 percent report that they currently work with just one software provider for all their SaaS needs.
– This is less than half that say they want to consolidate SMB software into one provider.
– Meanwhile, 63 percent of SMB respondents work with more than one SaaS vendor.
– Synthesizing all of the above, SMB aspirations are important as a window into their potential future behavior… but actions speak louder than words.
– On the bright side, the gap between aspirational goals and actual behavior is where the opportunity lies.
– This gap is where software providers can potentially deepen relationships with existing SMBs by getting them to consolidate services.
– The same opportunity represents a threat if SMB Saas customers are poached by competing vendors likewise coaxing them to consolidate.
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. This is 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.
