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 post-pandemic world? This is all a moving target.
Localogy’s Modern Commerce Monitor (MCM) answers these and other questions across the SMB SaaS product set, which we preview in this Benchmark Bytes series. And we recently entered a new chapter of this series, with highlights from the latest wave (8.0) of Modern Commerce Monitor.
After examining the degree to which SMBs take advantage of free trials in SaaS, we switch gears to examine the degree to which they engage in those products. After they purchase SaaS licenses, do they jump in with both feet or let the software linger? The answer can meaningfully impact their sense of ROI.
Data Dive
– Diving right in, the most prevalent engagement level seen in new SMB SaaS purchases (40 percent) is “We didn’t use it at first, but usage has grown over time.”
– This stands to reason as SMBs are often slow to adopt and learn digital technologies.
– They’re also famously time-starved, with software usage happening on nights, weekends, and other off-hours.
 – But buried in this response is some good news… though their engagement is delayed, it does eventually occur.
– Next on the list with 34 percent of responses was the inverse of the above: Heavy initial use, followed by declining engagement over time.
– This is the behavioral pattern that SMB SaaS vendors want to avoid, as declining use can lead to a low perception of ROI on the part of the SMB… which leads to churn.
– Trailing far behind at 13 percent of responses was “We used it heavily at first and maintained that level of activity.”
– This response is obviously the most favorable outcome, with early engagement showing SMB excitement; and sustained engagement showing a strong sense of value.
– The fact that this behavior is relatively low on the list, it signals an opportunity for SMB SaaS vendors to move more businesses into this bucket. This can involve gamification or other UX mechanisms to breed sustained engagement.
– Last on the list at 9 percent of responses is the rather discouraging “We’ve never used the product.”
– This behavior is a death sentence, most likely resulting in customer churn. So SMB SaaS vendors need to invest in ways to minimize this outcome.
– There also should be some urgency here given that almost 10 percent of SMB SaaS users fall into this trap.
– Methods for avoiding such behavior can include frequent outreach to recent software buyers, such as email newsletters, “how to” videos, and other content and support meant to help them get the most value out of the product.
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Long-Tail Opportunity
Stepping back, SMB online marketing – as well as operational and fintech tools – continues to grow rapidly. SMB SaaS startups and online service 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 accelerated in the Covid era as SMBs were forced into digital transformation. This sent them into the arms of SaaS providers (where many have stayed) 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.
