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 in a pandemic? This is all a moving target.
Localogy’s Modern Commerce Monitor (MCM) answers these and other questions across the SMB SaaS product set, which we preview in this Benchmark Bytes series. After examining SMBs’ satisfaction with online services last week, we switch gears to look at how likely they are to adopt SaaS tools.
Specifically, among SMBs that we surveyed that don’t use SaaS tools, how many plan to? This is a key market segment because it represents new growth for the SMB SaaS sector. Otherwise, growth for any one player comes through ARPU boosts for existing users… or taking market share from competitors.
Data Dive
Going deeper, a few other insights jump out from these figures.
– Among SMBs that don’t use SaaS-based online services, 45 percent say they plan to start using them in the next year.
– Among SMBs that already use SaaS, 65 percent say they plan to increase spending.
– In both of the above cases, the outlook is very positive in terms of future adoption likelihood.
– It stands to reason that increased spending is higher among SaaS users (65 percent) versus non-users (45 percent) as they are already sold on its benefits.
– But even among non-users, the aspirational adoption rate is high at 45 percent.
– Putting this into perspective, if all SMBs who say they plan to adopt SaaS actually do, that will represent notable (almost 50 percent) aggregate spending growth.
– Of course, future-looking survey sentiments are inherently aspirational, so all SMBs may not end up adopting.
– Timing and economic factors should also be considered, given that a softened economy could impact actual adoption.
– Then again, the macroeconomic pressure to streamline or cut costs could compel more SMBs to adopt SaaS as it’s often a way to reach operational efficiencies through the power of software.
Localogy members can access full charts and SMB survey reports. Non-members can purchase reports.
Long-Tail Opportunity
Stepping back, SMB online marketing – as well as operational and fintech tools – continues to grow rapidly. SMB SaaS startups and online services providers are correspondingly thriving as it continues to grow as a leading subsector of the broader SaaS universe. There’s a long-tail opportunity at play.
Meanwhile, new SMB SaaS users could represent permanent adopters – a concept that accelerated in the Covid era as SMBs were forced to boost their digital transformation. This sends them into the arms of SaaS providers to accomplish a range of marketing and operational functions.
We’ll return in the next installment to go deeper into Localogy original survey research. That will include SMB goals and success factors. 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.
And don’t forget that MCM, Wave 8 will be available soon…
