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How Are SMBs Purchasing SaaS?

This is the latest in a series of LSA Insider posts citing data from our Modern Commerce Monitor™️  small business survey about SMB SaaS adoption. The MCM surveys 1,000 SMBs about their use (or non-use) of SaaS to operate every aspect of their businesses. Find previous posts sourcing MCM data here


The LSA’s Modern Commerce Monitor™️ small business survey reveals the degree to which self-purchase is a driving force in SMB SaaS, with 30% of SMBs reporting they purchased the software directly and another 19% acquiring tools through online marketplaces.

It’s important to note that many cloud tools are designed for self-service, meaning the only way they can be purchased is online. Yet the data does underscore an important point about the SMB SaaS ecosystem. It’s far less oriented around interactions between SMBs and salespeople than is local advertising, either traditional or digital.

This has implications as more and more SaaS businesses expand their offers to include adjacent services (e.g. Square’s expansion into lending, or QuickBook’s expansion into payroll processing).

As more SMBs are conditioned to buy software directly from the provider’s site (or app store or marketplace), companies that enter the market via direct sales channels may increasingly find that their toughest competitors are organizations without salespeople.

However, it’s important to note that larger businesses are far more likely to buy from an agency or media company than the overall sample. In many cases, very small businesses self-serve out of necessity, since media companies and agencies are far less likely to call on them.

It’s also important to point out that buying a product directly from a website doesn’t mean SMBs do not need or desire service and support from a human being.

Self-purchase and self-service are often conflated but the two are in fact completely different things. And many in the industry argue that service and support are more crucial than sales to success in SMB software.

Freshbooks is a good example. The SaaS accounting company has exactly zero salespeople but its culture is fanatical about customer service. 

Source: LSA’s Modern Commerce Monitor ™️ (2019) n=795

Stay tuned for more posts honing in on interesting data points from the MCM survey and exploring their implications for local.


Interested in learning more about the Modern Commerce Monitor™️ and how its insights can help your company navigate the shifting sands in local?  Send Jeff Congo an email at Jeff@TheLSA.org, and we’ll set up a briefing.

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