Benchmark Bytes: How Many SMBs Utilize SaaS?

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 the last several installments looked at our Freelancer report, we now dive into the latest MCM wave.

And to kick things off, we’re looking at the number of SMBs that have adopted SaaS and online services. Specifically, Wave 6.1 indicates that adoption is now at 85 percent of SMBs. This is up from 72 percent in 2020 and 35 percent in 2017. The survey was fielded in q4 2021, reflecting Covid dynamics.

Localogy members can access full charts and SMB survey reports. Non-members can purchase reports

Data Dive

Going deeper, a few other insights jump out at us from these figures.

– The average number of apps business owners use to manage their business is 6.35

– As reported in Wave V in 2020, the average number of apps in use by SMBs to run their businesses had doubled to 6.25 since 2019.

– As SaaS players continue their quest for user retention and expansion of services, we may see this number level – signaling a consolidation among SMBs in the apps they use every day.

– 62 percent of businesses stated they have saved money from using online software.

– A welcome side effect of racing to adopt and invest in new technologies throughout 2020 is the cost savings many SMBs have discovered in doing so.

– Digitally driven operational efficiencies are sure to be among the stickiest experiences and will drive customer retention.

– 65 percent of small businesses plan to purchase more online solutions over the next 12 months.

– Those experiencing cost savings and efficiencies in areas such as marketing, finance, HR, supply chain, and customer service, are compelled to expand their use of online tools.

SMB SaaS Use and Purchase Trends, October 2021

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.

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