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 the SMB SaaS product set, which we preview in this Benchmark Bytes series. After examining the types of SaaS that SMBs buy last week, we switch gears to look at their biggest reasons.
In other words, what is the impetus for purchasing software that can help SMBs streamline operations? Is it driven by gaps in functionality, a desire to save time, or automate key functions? As we examined last week, this list of SMB Saas tools includes things like fintech, payroll, CRM, and marketing software.
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Data Dive
Going deeper, a few other insights jump out at us from these figures.
–The biggest driver for SMB SaaS adoption is to gain more capabilities (46 percent of responses).
– That’s followed by saving time and gaining operational efficiencies (39 percent), and gaining tools that are easier to use than existing ones (29 percent).
– Gaining capabilities is not surprisingly a leading driver for SMB adoption. Heavy competition among SaaS providers has caused feature sets to ratchet up over the past few years.
– Saving time and gaining operational efficiencies are likewise logical adoption factors for famously time-starved SMBs.
– However, it’s notable that this factor is down significantly from previous waves including 72 percent of responses in Wave 5 (Jan 2020) and 51 percent in Wave 6 (Feb 2021).
– The decline in Wave 6.1 may represent a leveling off of the adoption inflections and software boom seen in the Covid era.
– Speaking of Covid, one SMB SaaS adoption driver that seems underrepresented in these results was the ability to work remotely (16 percent).
– This is down from 36 percent in Wave 6 (Feb 2021), when we were at the height of the pandemic. Like the above point, the decline could simply mean the Covid-accelerated ramp in adoption has plateaued.
– Simplicity is the name of the game for any software targeted at SMBs. This is why it was no surprise that 29 percent of respondents named UX simplicity (versus current tools) as an adoption driver.
– This was up from 16 percent in Wave 6, and 11 percent in Wave 5.
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.
And don’t forget that MCM, Wave 8 will be available soon…
