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 degree to which SaaS products meet SMBs’ expectations last week, we switch gears this week to examine planned future adoption. Among non-SaaS users, how many SMBs plan to adopt in the near term? And among existing SaaS users, how many plan to increase their spend?
Data Dive
– Diving right in, we can segment SMB SaaS buyers by users and non-users.
– Starting with users, 50 percent plan to purchase more SaaS tools in the future.
– This can be seen as a proxy for satisfaction… those who see that SaaS tools are working are more likely to double down.
– Moving on to non-users, 40 percent of SMBs report that thy plan to adopt SaaS tools.
– This is a strong confidence signal for the future health of the SMB SaaS market.
– If these SMB aspirations reflect realistic future behavior, it means that the market could grow at meaningful levels.
– These figures also gain new meaning and dimension if viewed in combination with other MCM data.
– For example, in an earlier installation of this series, we examined how SMB SaaS was reaching maturity and market saturation, given that 89 percent of SMBs have already adopted.
– This week’s featured data soften that blow, given that the remainder of the market (non-users) will adopt at a high rate.
– Furthermore, the overall addressable market will grow not just in the number of SMBs but spend per SMB (ARPU). That’s indicated by the share of SMB SaaS users who report that they will increase spend.
– As we stated in a past article, this ARPU boost would be required because growth is slowing in terms of the number of SMBs that will represent new adopters (due, again, to market saturation).
– So these figures bring good news to an otherwise maturing and revenue-decelerating sector.
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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.
