This is part II in our series on SMB website builders. Part III will publish tomorrow and others will follow. See the whole series here.
Email marketing powerhouse Constant Contact this week became the latest entrant to the website-builder competitive landscape. Along with websites, it’s also launching adjacent/complimentary services such as a logo maker, eCommerce stores, custom domains and the G Suite line of Google business tools.
The latter is a common thing for website builders to bundle (WordPress.com does it), as it gives SMBs an email address that matches their domain, as well as communication tools like Hangouts Meet. The website builder is also SMB-friendly in that it’s a WYSIWYG drag & drop interface to set up a professional site.
Put another way, these new features all go together and are purpose-built for Constant Contact’s existing target market of individuals and SMBs. The company even makes a point to highlight how design knowledge isn’t needed to create a website. So the full suite is very “on-brand” for Constant Contact.
In total, it includes (from the press release):
— Free, high-resolution custom logos for enhanced branding
— Custom domain names and G Suite productivity tools
— Audience expansion tools that sync contacts from websites and stores to email marketing
— Free online stores, with shopping cart, payment, tax and inventory management functionality
— Simplified analytics to help small business owners optimize their sites and stores
— Secure, mobile-friendly websites that include free SSL encryption
— A global content delivery network (CDN) for fast, Google-friendly sites
— The Unsplash.com image library with 550,000 free professional quality images
Notably, this follows our recent analysis of the website builder competitive field, as quantified by a Fresh Chalk survey. But more importantly, the move by Constant Contacts aligns with a separate trend we continue to track: the ever-growing and diversifying product bundles in SMB SaaS products.
The idea is that a larger bundle boosts revenue per user (ARPU) and retention. The latter is all about having more tentacles that reach into business operations, thus anchoring a given vendor in SMB operational support. That in turn creates greater SMB switching cost and a sort of lock-in effect.
The bundling strategy is also supported by LSA’s Modern Commerce Monitor (MCM). Fielded by Thrive Analytics, the survey indicates that SMBs increasingly prefer “one-stop-shop” providers for their various operational needs (see below). That’s everything from marketing to back-office functions like payroll.
Moreover, there’s a notable disparity between SMBs’ current behavior and their aspirational sentiments in the survey. Specifically, 38 percent of SMBs use 1-2 services, but 79 percent prefer to work with a single source for everything. This signals an opportunity for vendors that can close the gap.
It’s also worth noting (as pointed out by LSA president Bill Dinan) that this move aligns with another MCM data point: the effectiveness of freemium bundles. Indeed, MCM indicates that a successful onboarding and sales tactic for SMB cloud services is a “try-before-you-buy” freemium approach.
Specifically, 60 percent of SMB software purchases happened after a free trial of some sort. And more importantly, 50 percent of those SMBs said that the purchase would have never happened if not for the free trial. Segmenting demographics, 72 percent of SMB owners expect a free trial.
Constant Contact exhibits the freemium strategy in its core email marketing tool that lets SMBs operate for free with a certain-size contact list. Additional features and larger lists are offered with tiered pricing. Freemium pricing carries over to the newest bundle, including analytics and eCommerce functionality.
Expect more bundling and feature expansion from Constant Contact and others that target SMBs. We’ll report back as we see that unfold across the SMB SaaS landscape.
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