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 latest Small Business Trends report answers these and other questions across the SMB SaaS product set, which we examine in this Benchmark Bytes series. After the last installment examined the types of fintech that SMBs are adopting, we switch gears this week to the factors that are driving fintech adoption.
Specifically, one of the top drivers is the ease and value of bundled software packages. Here, Fintech is a logical purchase alongside adjacent functions due to synergies and bundled pricing. For example, 32 percent of businesses that got new financial software also upgraded their payroll capabilities.
Meanwhile, 48 percent of businesses that got new financial software also upgraded their payment processing capabilities. And 23 percent of businesses that got new financial software also upgraded their Email marketing capabilities. This adoption happened between March and October 2020 when the survey was fielded.
What Does it All Mean?
Going a bit deeper, a few things jump out at us:
— The biggest realization from these data is that SMBs appreciate the value and ease that bundled software integrations can offer.
— In some cases, there are logical ties to Fintech software, such as Payroll integrations and Payment processing.
— In other cases, there’s less of a functional synergy but there’s bundled value nonetheless, including emal contact integrations.
— There are also Pandemic-related factors at play, as this survey was fielded between March and October 2020.
— Some SMBs may have more time to apply to longstanding admin projects and “cleaning house,” during lockdowns, where things like bookkeeping and other fintech functions make sense.
— Fintech’s pandemic adoption (also indicated in previous posts in this series) is also logical, given that this is a time when SMBs need to run a tight ship as there’s a low margin for error and dire need to mitigate Covid-inflicted losses.
Time to Shine
Stepping back, Fintech is having a moment. It continues to grow rapidly as a business category, including its SMB adoption. Fintech startups are generally thriving with exit velocity, funding, and public-market performance. It’s becoming a leading subsector of the broader SaaS universe.
Meanwhile, new SMB fintech users above could represent permanent adopters — a concept that’s accelerated in the Covid era as SMBs are forced to accelerate 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 tech adoption. That will include top goals and what types of SMBs are adopting. 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.