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 underutilized SMB online services, we switch gears to examine how SMBs purchase these tools.
Specifically, the most prevalent method for purchasing online services is directly from a company’s website (35 percent). That’s followed by 26 percent of SMBs who discivered a given product in an online marketplace. 17 percent of SMB SaaS buyers were solicited by a sales representative before purchasing.
Further down the list is influence from a local marketing agency (12 percent). Speaking of influence, 5 percent of SMBs report having been influenced by an intermediary, such as a lawyer or accountant. 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:
— At a high level, it’s telling that most SMBs are buying online services directly. This could be a sign of the times, resulting from both SMB evolution and savvy, as well as Covid inhibitors.
— The latter impacts the ability for sales representatives to reach SMBs to do their thing.
— Further in support of Covid impact, the self-serve method was up five points from Wave 5 of this research.
— The same dynamics feed into the second-highest answer in this data set which is discovering new services through online marketplaces.
— This was the biggest mover in the survey, jumping from 18 percent in Wave V to 26 percent in Wave VI.
— Given that SMB services have traditionally been “sold rather than bought,” it’s telling that rep-sold SMB services are down to 17 percent of instances.
— This figure was flat year-over-year which is suprising given the above Covid factors.
— Influence from local marketing agencies and professional services will continue to be strong sales drivers for SMB SaaS
— SMB SaaS players should work on these points of influence and channel relationships. That can include local agencies as well as affiliate/referral incentives for trusted local professionals like lawyers and accountants.
— Influence from local pros was down 8 points from Wave V, but this is likely due to Covid, and we predict that it will bounce back in the next research wave.
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 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.