Video Vault: The New SMB Reality
November 11, 2019 | Contributed by: Charles Laughlin
This is the latest in LSA’s Video Vault series. Running semi-weekly, it examines selected conference talks, including embedded video and key takeaways. Speakers’ opinions are their own. Check out the entire series here.
Last week the Asiacomm ’19 event in Vietnam featured several conversations about how technology and SaaS are transforming the small business market.
There are some issues that span the globe and cut across markets of all sizes and stages of development. Small businesses everywhere are looking for help in managing the technology they use to run their businesses. Yet some markets are well behind others in their adoption stages.
The event, presented by ALSMA, attracted delegates from a wide variety of markets in the Asia-Pacific region, Thailand, India, Sir Lanka, Vietnam, Australia, Japan, and Singapore, to name a few.
I outlined many key global themes around small business and tech adoption in a presentation titled “SaaS — The Next Small Business Revolution”, citing the LSA’s work with the Modern Commerce Monitor™️.
My talk touched on the issues driving the growth of SaaS for SMBs, including generational change, the growing use of self-service sales, the growing insistence on a “try before you buy” model, higher trust in “tech first” channels like SaaS platforms, and the generational factor in SaaS adoption.
After my talk, my LSA colleague Neal Polachek and I were joined by Vendasta CEO Brendan King and two local leaders from the APAC region — Elise Ballsillie, GM Sales at Yellow Australia (Sensis), and Fabian Lim, founder of Click Media, a Singapore-based digital agency — to find out how these issues apply to different markets in the region.
Here are some key moments of insight from the panel.
On the Role of Free Trials
The MCM shows that 60% of SMBs that purchased SaaS did so via either freemiums or free trials.
Elise from Sensis said free trials are critical, but there is a right and a wrong way to do it. Engagement is critical.
“For us, offering a free trial has been super beneficial for the uptake and adopting the technology. But just offering the free trial in isolation wasn’t enough to make them a user of the technology. Need to make sure there is a learning platform behind it to support them. The sooner we could engage them in using the app and educating them about the features, the more likely they are to embed this into their business and become a paid subscriber.”
Neal noted that the growing reliance on free trials is another example of how consumer experience is impacting B2B expectations.
“How we buy as a consumer and experience life as a consumer is redefining how businesses engage with other businesses.”
Brendan noted that freemium is increasingly important to customer acquisition and his company is using a product-led growth strategy that involves bringing SMBs on board via a “friction-free” self-service process.
On the Generational Impact on SaaS Adoption
My talk preceding the panel included a slide on which business personas index higher for SaaS adoption.
Some personas that index higher for SaaS adoption are explicitly generational. For example, Gen Y business owners index higher than boomers. Others are implicit, such as a higher adoption index for businesses in growth mode vs. those in a mature business phase.
The panelists validated that these generational differences show up in real life.
“I find it is easier to educate younger business owners,” Elise said. “I have to work a lot harder to educate a more mature business owner…who still operates with pen and paper.”
Neal contends it doesn’t make much sense to try and transform the tech stack of an SMB with that profile.
“That owner is either going to sell the business or turn it over to one of their children in the next five to seven years,” Neal said.
At that point, the new operator will likely be a great prospect for a SaaS overhaul.
On the Importance of Trust
Trust came up over and over again during the panel. When small-businesses are trying to figure out what technologies to buy to do everything from run digital ad campaigns to process invoices, trust is a much more important differentiator than product quality.
Brendan offered this take on why trust is such a differentiator.
“Everything is moving to SaaS. Enterprise moved faster, but now SMB is moving three times faster because there is more room there. The problem is SMBs are buying stuff they don’t even know they have, they’re losing passwords, unlike enterprise they don’t have IT departments. Trust becomes important.”
Brendan references a data point from my slides, noting that MCM data shows that small businesses trust SaaS companies over most other channels for building out a full stack of solutions to run their businesses.
He said this wasn’t a barrier for the publishers in the room selling tech to their SMB customers. It just requires a bit of reinvention.
“You say that people are buying from SaaS companies. Well, you can all be SaaS companies.”
Fabian from Click Media put the trust issue this way.
“Is Quickbooks better than Xero? Who knows? And really, who cares? Small businesses want to work with someone they trust.”
Fabian believes most small businesses will accept “good enough” technology from a partner they trusted over best in breed tech from a partner they don’t trust.
There was a consensus that education and delivering quality service were two ways that SaaS brands can build trust with SMBs.
“Education is one of the most powerful ways to build trust,” Brendan said.
See the full talk embedded below, and stay tuned for more LSA video coverage in the semi-weekly Video Vault series.
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