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. And we recently entered a new chapter of this series, with highlights from the latest wave (8.0) of Modern Commerce Monitor.
After examining the functional areas where SMBs plan to buy or increase spending on SaaS products last week, we switch gears this week to examine the timing of that adoption. How close are SMBs to making these buying decisions, and what implications does that hold for SMB SaaS market growth?
Data Dive
– As we examined last week, the leading categories for SMB Saas demand are a three-way tie between human resource solutions (including payroll), CRM, and supply-chain services.
– Trailing closely behind those categories is marketing & advertising solutions (39 percent) and finance & operations (32 percent).
– But beyond the “what” is the question of “when?” How imminent are these SMB Saas buying decisions?
– According to SMB survey responses, the time frame with the greatest demand (50 percent) is within 6 months.
– That’s followed by 6-12 months (25 percent), 1-2 years (15 percent), and >2 years (10 percent).
– In total, this means that a large majority of SaaS-interested SMBs – 75 percent – anticipate transacting within a year.
– This is a good demand signal for the SMB SaaS market. Though it’s an aspirational figure (as with all survey-based research), it still paints a positive picture for SMB adoption.
– This positive news counterbalances some of the negative news in previous installations of this series. For example, SMB SaaS growth is plateauing as it hits a natural ceiling in a supply-saturated market.
– Remaining adopters therefore diminish in quantity over time, but at least a large share of those potential buyers indicate some degree of immediacy.
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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 into digital transformation. This sent them into the arms of SaaS providers (where many have stayed) 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.
