Benchmark Bytes: What Types of SMBs are Hottest for CRM?

As part of the ritual of examining local commerce and SMB Saas strategies, we decided to go 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 one-by-one in this Benchmark Bytes series. After the last installment examined how SMBs’ goals for their CRM platforms, we turn this week to the types of SMBs most likely to adopt.

When we say “types of SMBs” that includes size of business and vertical. Specifically, 48 percent of MCM respondents that have adopted CRM since the beginning of the pandemic have 1-10 employees — the most adoptive group. That’s followed by 11-25 employees (25 percent) and 26-50 (13 percent) and 50+ (14 percent).

As for verticals, retail has a commanding lead of SMB adopters with 28 percent. That’s followed by dining & entertainment (19 percent), health and medical services (13 percent), professional services (13 percent), Automotive (9 percent), personal services (9 percent) and home services (9 percent).

These figures reference the time period between March 2020 and when the survey was fielded in October 2020, indicating that a considerable portion of SMB sentiments were Covid-driven.

What Does it All Mean?

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

— As examined last week, CRM’s growth in new SMB adoption is logical, given that this is a time when SMBs need to optimize every customer relationship to mitigate losses.

— SMBs may have more time to apply to longstanding admin projects and “cleaning house,” during lockdowns, where CRM projects make sense.

— SMBs are also more driven to pursue any means necessary to boost business.

— The smallest businesses (1-10 employees) are the biggest CRM adopters, suggesting that they need software and automation to drive business, as manpower is relatively scarce.

— These data could also be interpreted to mean that smaller businesses are the biggest untapped SMB segment, with several larger businesses already equipped with CRM.

— Retail’s leading position as a CRM-adoptive SMB segment makes sense, given that transactions are recurring and the name of the game is to get customers to come back at more frequent intervals.

— The same can be said for dining and entertainment.

— Conversely, some verticals have less frequent transactions but higher stakes… which likewise compels CRM software to drive recurring visits or sales.

— This can be said for health and medical services, professional services, automotive and home services.


As noted last week, CRM is on a clear uptick in the Covid era. The question is if that growth will sustain as SMBs reopen. A certain degree of SMB CRM sales will evaporate as they themselves do… which isn’t good for CRM providers nor any vendors that serve this segment. But there could also be new Covid-driven converts.

These new users could represent permanent adopters — a concept that has gone into hyperdrive in the Covid era as SMBs are forced to accelerate their digital transformation as a survival imperative. This often 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 some of the other areas of the MCM survey beyond CRM. That will include fintech services that SMBs are adopting in the Covid era. 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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