Benchmark Bytes: Who’s Winning at SMB Websites?

After examining SMB website dynamics in our Website Windup series, and in roundtable discussions with thought-leading investors, we decided to go right to the source: SMBs themselves. How do they feel about websites? What features do they want? And do they upsell to adjacent services?

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. But first up is SMB website sentiments: Considering the who? what? when? and why? we’ll start with the who? (not them).

Asking SMBs “Who is your website provider?” the top two answers were an ad agency (16 percent) and DIY (9 percent). When diving deeper into website builders, WordPress takes the top spot (9 percent), followed by GoDaddy (9 percent) and Wix (7 percent), (7 percent) and Shopify (6 percent).

What Does it All Mean?

Going a bit deeper on the above data points, a few things jump out at us:

— Adoption shares aren’t surprising and mostly align with the rankings of website builder market share we see in the broader market (WordPress in the lead, etc.).

— In fairness, it should be noted that Wix recently surpassed GoDaddy.

— These results also validate the fragmentation in the website builder world, with a long tail of providers that are attracted to the supply gap and market opportunities (more on that in the next section).

— Speaking of the supply gap, in addition to market dynamics and Covid-era transformation, it should be noted that only 64 percent of SMBs have a website according to the SBA, meaning there’s still ample headroom in this market.

— Shopify has six percent of SMB responses, followed by Constant Contact (owned by Endurance International) with five percent. This demonstrates the expansion of website builder features mentioned above… but in reverse. Several other functions — in this case eCommerce and email marketing — are expanding into websites to be that digital onramp.

— Google My Business (GMB) follows the players in the previous bullet with 5 percent of survey responses. This is likewise notable because it’s technically not a website builder. Like SMBs that use simpler forms of “presence” like a Facebook page, GMB has attracted SMBs that sidestep an actual website.

Tip of the Spear

For further context, websites continue to be the “tip of the spear,” for SMB marketing. They’re often the first foray into online presence as SMBs graduate to higher levels of marketing. This is generally due to the cost/benefit ratio, given the falling cost of web hosting and escalating standards of website builders.

Websites are also the base ingredient of online presence and “table stakes” to get in the game for SEO, social amplification, and other areas. This is the reason many website providers have begun to expand their bundles to expand SMB relationships into higher-margin products like CRM and eCommerce.

This of course has gone into hyperdrive in the Covid era as SMBs have been forced to accelerate their digital transformation as a survival imperative. This often sends them into the arms of website builders as an onramp to the many other things they need to accomplish… eCommerce being most prominent.

We’ll return in future installments to go deeper on this bundling opportunity, as well as other factors like SMB website satisfaction. Let us know what additional insights jump out at you from the above data, and stay tuned for more data breakdowns in our Benchmark Bytes series.

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