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 SMBs’ reasons for adopting SaaS products last week, we flip things around this week to examine the reasons they don’t. In other words, for SMB respondents who reported not adopting SaaS to help run their business, why not? This is an important factor for SaaS vendors to consider.
Data Dive
– Diving right in, the leading reason why non-adoptive SMBs aren’t interested in the technology is status quo.
– Specifically, the leading reasons are “I believe that if it isn’t broke, don’t fix it” (62 percent) and “I am comfortable using what I have today.” (53 percent)
– The above two results collectively represent an attitude that things are fine and no changes are needed. This is the type of objection handling SMB SaaS vendors should be prepared to address.
– Next on the list of reasons for not adopting SaaS was cost: 45 percent of respondents say that SMB SaaS tools are too expensive.
– This was up from 24 percent in Wave 7 and 21 percent in Wave 8, representing one of the biggest growing sentiments in this part of the survey.
– This is surprising in that monthly software licenses are often cheaper than traditional methods of running a business.
– The growth in this sentiment is likely due to a softened economy and the pinch felt by SMBs.
– Other reasons for non-adoption include bad experiences with technology (24 percent), privacy concerns (22 percent), lack of relevance (16 percent), and lack of applicability (15 percent).
– SMB SaaS vendors should consider all of the above in their product development and sales strategies in terms of “objection handling” scripts to directly address the biggest points of SMB resistance.
– See the full data set in the chart below.
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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.
