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 success metrics of freemium pricing models, we now drill down into SMBs SaaS usage levels.
Specifically, 41 percent used services heavily at first but then tapered off. 37 percent experienced the opposite — not using services at first but then growing into them. Meanwhile, 13 percent used online services heavily at first and have maintained that level of activity. 8 percent of respondents never used the product at all.
As for things SMBs want, they cited product simplicity (61 percent), better training/onboarding (55 percent), and better expectation-setting about features (52 percent). Further down the list, SMBs want proactive customer support after onboarding (35 percent), live 24/7 support (30 percent) and chatbots (25 percent)
What Does it All Mean?
Going a bit deeper, a few things jump out at us:
— Nearly half of SMBs didn’t use online services or had limited usage due to service complexities, lack of training, and misalignment of expectations.
— This should be a call for SMB Saas providers to better engage with customers, as their inactivity will often translate to customer churn.
— The fact that usage has tapered off for 41 percent of SMBs should be concerning that their engagement levels aren’t optimal for perceived ROI (and thus renewals).
— That bad news is counterbalanced by an almost as large segment (37 percent) for whom usage/engagement has grown over time.
— As for things that SMB SaaS providers can do to boost engagement (and thus retention) almost all have to do with sales and service levels, as opposed to product features.
— High touch interactions and check-ins (though costly) can breed more perceived ROI on the part of SMBs.
— Some of these functions can be automated for better cost containment and to preserve margins, including automated onboarding tutorials.
— Along the same lines, it’s notable that 25 percent of SMBs wanted to see more chatbot availability for 24/7 support. This is up from 17 percent in Wave V of the survey.
— This affinity for automated tools for remote support is likely due to comfort levels that were conditioned during the pandemic.
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.