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Cloud SMBs Are Younger, Focused on Growth, Opportunity

As part of our recently released Modern Commerce Monitor™️, we developed something we call the Cloud-Based Services Buyer Index. The index offers a measurement of the characteristics that typify a small business moving into the cloud vs. a business that is more resistant to the shift.

We’ve said many times that the generational shift taking place is driving the adoption of SMB SaaS. We’ve often cited estimates that roughly 10,000 Americans reach retirement age each day. Of course, not everyone retires at 65, but an aging population includes in it an aging population of small business owners. As these owners transition their businesses to their kids, or sell them or shut them down, new decision makers will pop up with an app-first approach to running their businesses.

The generational trend for SMB SaaS adoption is clear in the data. We also see it with our own eyes on a regular basis. As just one example, we recently wrote about a video interview we conducted with a Chicago-area lingerie shop owner who acquired the businesses from an elderly long-time owner. Her immediate first moves after taking over included installing inventory management software and a Clover point of sale terminal.

The owner, Larisa, certainly has some pen and paper quirks remaining in her day-to-day processes. Yet she overhauled the key parts of her businesses with cloud-based software and admits it would be “hell” to run the business without software. The previous owner relied largely on “chicken scratch” to manage the business. Multiply this transition scenario by tens of thousands and you get a sense of the revolution that is taking place.

The Cloud-Based Services Buyer Index shows us there are other important signals other than age that a business will embrace apps. These include whether the business is in growth or maintenance mode, whether it has employees, and if its concerns are less about external factors like the economy and more about factors it can control, like customer acquisition and retention, and time management. In other words, ambitious, optimistic, growth-oriented businesses are the best customers for SMB SaaS. And that package isn’t expressly linked to age.

Looking at the MCM data is useful in building customer personas for selling cloud-based business management tools. Contact us if you are interested in learning more about how our data can support your sales and marketing efforts.

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