Benchmark Bytes: Can SMB SaaS Boost Revenue-Generating Activity?

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 during a global pandemic that has hit local businesses hardest?

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 the last installment examined projected SMB SaaS adoption, we switch gears to examine how those services free up valuable time.

At a high level, the data indicate that SMBs who have adopted online services show a clear increase in time spent with revenue-generating activities, versus those who have not. Drilling down, among SMBs who spend between 51 and 75 percent of their time on revenue-generating activity, the vast majority use SMB Saas.

Conversely, the situation is flipped among SMBs who spend less of their time (between 26 and 50 percent) on revenue-generating activity. A majority of this cohort are non-SMB-Saas adopters. These data were gathered in January and February so they have some Covid-influence in terms of adoption drivers.


Localogy members can access full charts and SMB survey reports.

What Does it All Mean?

Going a bit deeper, a few things jump out at us:

— There’s a clear correlation between SMB Saas adoption and time-spent with revenue-generating activity.

— This validates one of SMB SaaS longstanding value propositions: to automate otherwise manual/rote tasks and free up valuable time for core revenue-generating functions.

— Breaking down the data further, businesses utilizing online services /tools spend 65%-75% more time on revenue-generating activities versus non-users.

— As we’ll detail in the next Benchmark Bytes installation (spoiler alert), this has allowed businesses to spend more time with customers (54%), improve satisfaction levels (44%), increase revenue (29%) and reduce error rates (24%).

— Though these benefits are clear in the survey data, only 39 percent of businesses are actually realizing these benefits.

— This is a double-edged sword: low adoption figures are a detriment to SMB productivity, but also represent considerable headroom for growth. This signals opportunity and addressable market for SMB SaaS players.

— One of the biggest stated barriers to adoption for SMBs is training/onboarding FOR new software products. This should signal an area of improvement for SMB SaaS players to better accommodate SMBs and lessen pain points.

Time to Shine

Stepping back, SMB online services adoption tracked by MCM continues to grow rapidly.  SMB SaaS startups and online services providers are correspondingly thriving with exit velocity, funding, and public-market performance. SMB SaaS is becoming a leading subsector of the broader SaaS universe.

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 operational and marketing functions.

We’ll return in the next installment to go deeper on other pandemic-driven areas of SMB technology adoption. That will include the types of SMB SaaS software that resonate most. 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.

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