Companies selling digital solutions to small-businesses have long chased the notion that SMBs want sellers to “make it easy for them” and wrap up the media products they need into one turnkey solution. One payment and one dashboard where they can see how it’s all working.
Ostensibly this is a win-win proposition. The seller gets a bigger sale and a greater potential for lock in, since a customer buying a website, social media, SEM, SEO and listings management from you is less likely to churn than the one that only buys SEM. The buyer in this scenario gets convenience and bundled pricing advantages in exchange for putting their trust in one provider for all or most of what they need.
The challenge with this notion is that a meaningful segment of small businesses have always resisted the idea. Some of the resistance reflects distrust in media sales channels. Some of it may also come from a belief among many SMBs that they can do better by hand picking solutions from multiple providers than by handing the reins to a single source.
Fast forward to the newer world of providing SMBs with cloud software to run their businesses. Everything from CRM systems for managing customer data to accounting apps that handle invoicing, paying bills and managing payroll.
The scale economics that drove publishers to push bundled digital marketing solutions are also driving SaaS companies to try and layer solutions on top of their core offering, to drive up their share of wallet and reduce churn.
Data from the LSA’s Tech Adoption Index certainly shows support for this idea of single sourcing cloud-based business applications. The latest wave of the TAI survey of 1,000 small businesses found that 50% “prefer to work with a single company” when sourcing tools for marketing services, CRM, payroll & accounting, payments and other basic business functions now addressed by SaaS vendors. Another 17% would rather hand pick their own solutions and a full 28% weren’t sure which they preferred.
When we dig into the data, we find certain firmographics have notably higher or lower interest in having a single source for all or most of their business applications. To give one example, preference for a single source was significantly higher in the Personal Services vertical (59%) and much lower in the Dining and Entertainment vertical (33%). SMBs with multiple locations also showed a stronger desire to “work with different companies that each specialize in these individual areas.”
If you want to know more about the Tech Adoption Index, visit our page for details on how to participate. We will be sharing more of the latest TAI data and what it means in upcoming posts.