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SMB Tech Purchase Plans: What, Why and When

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How important is tech to SMBs? What motivates them to buy new technology? What hardware and software will they buy, and how long does it take them to make a purchase decision? What software do they prefer to host locally, and why do they migrate to the cloud?

To answer these questions – and many more – we surveyed 600 U.S. SMB principals.

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SMB Tech Purchase Plans: What, Why and When

  1. 1. October 31, 2018 SMB Tech Purchase Plans: What, Why and When
  2. 2. INCREASING SALES TO SMBS 2
  3. 3. INSIGHT 3 Topics Methods Output • Attitudes and usage • Buyer identification • Competitive perceptions • Market segmentation • Media behaviors / preferences • Message / positioning testing • New product testing • Net promoter score • Persona / buyer journey • Purchase intent, behaviors, channels and preferences • Qualitative • Live / online focus groups • Workshops • In-depth interviews • Quantitative • Custom online • SMB Pulse omnibus • SMB Finance, HR, IT & Marketing Pulses • Insight for CE / product / marketing strategy • Data for PR / content / social / collateral programs
  4. 4. OUTREACH 4 Video Email Newsletters Checklists / Worksheets Case StudiesArticles Blog Posts White Papers Podcasts eBooks PR Surveys Social Media Handbooks / Guides Webcasts Slideshows Infographics Interactive Tools • Survey data • Creative brief • Editorial calendar • Content development • Content audit • Analytics Contribution • Expert • Actionable • Relevant • Easy to understand • Professional • Brand-building • Custom Principles Direct Mail Event Collateral Brochures / Sell Sheets Custom Pubs
  5. 5. 5 WHAT WE’LL COVER Why SMBs move to the cloud What SMBs will buy – and when Why SMBs buy tech Engaging SMBs, and the role of content Brand penetration and NPS
  6. 6. 6 METHODOLOGY 1 2 HOW WHO Online survey via the Bredin.com/SMBPulse 600 principals of U.S. companies with ≤500 employees (4% +/- CI) 350 VSB <20 employees (97.71% weighting) 150 SB 20-99 employees (1.96% weighting) 100 MB 100-500 employees (.33% weighting) 3 WHEN September 12-24, 2018 Company Size
  7. 7. 45% 55% Female Male Professional Services 28% Computer Software/Internet 6% Computer Services/Consulting 4% Financial Services/Accounting/Bookkeeping 4% Medical 4% Advertising/Consulting/Design/Marketing Services 3% Architect/Engineering 3% Banking/Insurance/Mortgage 2% Publishing/Printing/Media 2% Legal 1% Retail/Wholesale 28% Retail 13% Real Estate 5% Wholesale 4% Food/Beverage/Restaurants 3% Entertainment/Recreation 2% Travel/Hotel/Hospitality 2% Manufacturing 29% Construction/Mining/Contracting/Electrical/Landscape/Plumbing/etc 16% Manufacturing/Transportation and Warehousing 7% Automotive 2% Computer Hardware/Electronic Equipment 2% Energy/Utilities 1% Telecommunications 1% Pharmaceutical/Medical Devices/Biotechnology 0% Other 16% Personal Services 12% Education/Training 4% Title 47% 33% 21% 50+ 35-49 18-34 Age Gender 58% 25% 17% 1 to 19 Employees 20 to 99 Employees 100 to 500 Employees Company Size CHARACTERISTICS 7 100% Principal (e.g., owner, founder, partner, CEO, president, etc.) Industry n=600
  8. 8. 15% 28% 30% 26% Less than 4 years 4 to 9 years 10 to 19 years 20 or more years 50% 15% 21% 15% Less than $500k $500k to $999k $1M to $4.9M $5M+ 3% 3% 23% 25% 37% 9% Down more than 10% Down by less than 10% Same as 2017 Up by less than 10% Up 10% to 100% Up by more than 100% Years in Business Geography 2018 Revenue Growth 2017 Revenue Northeast 21% South 38% West 19% Midwest 22% CHARACTERISTICS 8 16% 44% 41% Population Density n=600
  9. 9. DETAILED FINDINGS
  10. 10. SMB optimism increases with company size, and decreases with respondent and company age 10 n=600 SMB BUSINESS OUTLOOK How do you expect your 2018 revenue to compare to 2017? Respondent Age Revenue Outlook Company Age 42% 62% 75% 82% 58% 38% 25% 18% Less than 4 years 4 to 9 years 10 to 19 years 20 years or more 30% 62% 77% 70% 38% 23% 18-34 35-49 50+ No / Slow Growth Fast / Hypergrowth Company Size 70% 37% 24% 30% 63% 76% VSBs (<20) SBs (20-99) MBs (100-500)5% 5% 32% 27% 26% 5% Down more than 10% Down by less than 10% Same as 2017 Up by less than 10% Up 10% to 100% Up by more than 100%
  11. 11. In aggregate, SMBs are almost evenly split on tech adoption attitudes 11 n=600 ATTITUDES TOWARDS TECH 33% 42% 25% We see it as essential to our business success, and adopt / develop it aggressively It is important, but we wait until technology is proven before we adopt it It is an expense that we try to minimize we only adopt technology when absolutely necessary 1/3 of SMBs see tech adoption as essential to their success Which of these statements best describes your company’s attitude towards technology? Early adopters Mainstream Late adopters
  12. 12. Tech attitude varies by growth outlook, respondent age and headcount 12 19% 45% 36% 37% 43% 21% 45% 40% 15% 58% 36% 6% Hypergrowth Fast growth Slow growth No growth n=600 Which of these statements best describes your company’s attitude towards technology? ATTITUDES TOWARDS TECH: DETAIL 67% 23% 9% 48% 37% 15% 22% 47% 31% 18-34 35-49 50+ Business Outlook Respondent Age 32% 43% 25% 67% 27% 6% 74% 23% 3% SBs Company Size MBs VSBs
  13. 13. In aggregate, SMBs buy tech to improve company capabilities and data security… 13 ADOPTION DRIVERS 29% 31% 39% 39% 40% 44% 46% 47% 47% 48% 48% Improve employee satisfaction / productivity Improve mobile access to applications / data Take advantage of a growth opportunity Keep up with changes in customers’ use of technology Keep up with competitors Current solution is dated / not working well Cost savings Improve reliability Improve business performance / processes Improve data security Improve functionality n=600 % rated very important Please rate the importance of each of these possible reasons for purchasing new technology for your business: Gen X (35-49) are most likely to be motived by potential growth opportunities (59%), well ahead of Millennials (18-34, 42%) and Boomers (50+, 31%)
  14. 14. …but SBs prioritize security, and MBs most value growth opportunities 14 Headcount VSBs (A) SBs (B) MBs (C) 48% 57% 55% 48% 64% (A) 60% (A) 47% 61% (A) 63% (A) 47% 60% (A) 62% (A) 46% 49% 63% (AB) 44% 53% 58% (A) 39% 57% (A) 55% (A) 39% 56% (A) 57% (A) 39% 55% (A) 64% (A) 31% 53% (A) 62% (A) 28% 49% (A) 59% (A)29% 31% 39% 39% 40% 44% 46% 47% 47% 48% 48% Improve employee satisfaction / productivity Improve mobile access to applications / data Take advantage of a growth opportunity Keep up with changes in customers’ use of technology Keep up with competitors Current solution is dated / not working well Cost savings Improve reliability Improve business performance / processes Improve data security Improve functionality ADOPTION DRIVERS: COMPANY SIZE Please rate the importance of each of these possible reasons for purchasing new technology for your business: n=600 % rated very important Respondents in manufacturing / construction are the most likely to cite ‘improved mobile access’ (39%), significantly higher than those in professional services (26)%.
  15. 15. Millennials prioritize security and keeping current; GenX, improving performance 15 Respondent Age 18-34 (A) 35-49 (B) 50+ (C) 54% 55% (C) 45% 57% (C) 56% (C) 44% 55% (C) 61% (C) 41% 42% 60% (AC) 43% 35% 57% (AC) 44% 57% (C) 48% 41% 54% (C) 51% (C) 34% 48% (C) 53% (C) 33% 42% (C) 59% (AC) 31% 46% (C) 52% (C) 22% 48% (C) 44% (C) 20%29% 31% 39% 39% 40% 44% 46% 47% 47% 48% 48% Improve employee satisfaction / productivity Improve mobile access to applications / data Take advantage of a growth opportunity Keep up with changes in customers’ use of technology Keep up with competitors Current solution is dated / not working well Cost savings Improve reliability Improve business performance / processes Improve data security Improve functionality ADOPTION DRIVERS: RESPONDENT AGE Please rate the importance of each of these possible reasons for purchasing new technology for your business: n=600 % rated very important Southern SMBs are significantly more likely to say ‘cost savings’ (59%) vs. those in the West (41%), Midwest (40%), and Northeast (35%)
  16. 16. TECH PURCHASE PLANS
  17. 17. SMBs are most likely to buy cellphones and PCs in 2018 and 2019 17 TECH PURCHASE OUTLOOK 18% 16% 12% 12% 10% 10% 9% 9% 8% 6% 24% 28% 24% 17% 15% 16% 12% 14% 13% 15% 15% 23% 18% 13% 12% 12% 10% 13% 10% 14% 57% 67% 54% 41% 38% 37% 32% 36% 31% 36% Cellphone(s) PCs / laptops / desktops Printers / copiers / fax machines Tablets Routers / switches / wireless access points Database software Phone systems Operating systems Onsite servers and storage Other system software, e g virtualization, network management By the end of 2018 In 2019 After 2019 = % planning on buying or upgrading What is your best guess as to when you will buy new / additional, or upgrade, each of these technologies for your business? Please pick the most likely option in each row. Pick the earliest option if you will buy any given item multiple times. n=600 Younger businesses (<10 years) are more likely to have purchase plans ‘by the end of 2018’ for all 10 product categories Want to watch the entire Fastcast? Watch it here. Want to talk with the B2SMB experts? Email us at: info@bredin.com

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