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 average number of SaaS apps that SMBs use last week, we switch gears this week to drill down into the SaaS functions they’re drawn to. By “functions,” we mean horizontal categories such as finance, HR, advertising & marketing, and other basic SMB operational needs.
Data Dive
– Diving right in, the leading category of SMB SaaS is finance and operational solutions, with 72 percent adoption.
– This stands to reason as these are common functions across SMB categories and verticals.
– These are also fundamental functions that are deep-rooted and mission-critical, as opposed to discretionary.
– Payroll and HR were the second highest-rated functions at 60 percent, which are similarly “mission critical.”
– While functions like marketing can be turned on and off (the reason advertising is recession-prone), things like payroll aren’t optional.
– Next on the list of SMB SaaS functions was advertising & marketing (57 percent) followed by CRM (56 percent) and supply chain services (55 percent).
– Supply chain services saw the biggest year-over-year jump, presumably due to supply chain shortages seen across the economy.
– Panning back further, CRM shows the greatest growth over two survey waves (40 percent), followed by payroll & HR (13 percent) supply chain services (12 percent), finance & operations (10 percent), and advertising & marketing (10 percent).
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.
