Inside the Mind of the SMB Tech Buyer
SMBs lean heavily on technology to succeed. Bredin’s latest research reveals why they buy, how they learn about technology, and who they want to buy from.
Why SMBs buy tech
To boost performance. Overall, 48% of SMBs buy tech to improve functionality and 47% buy to improve business performance. However, businesses with 20 to 99 employees rate ‘improving data security’ as the single biggest tech purchase motivator, while for businesses with 100 to 500 employees it is ‘to take advantage of a growth opportunity.’
There are striking differences by the age of the business principal as well. Millennial entrepreneurs buy tech to improve data security and replace data systems; Gen Xers, to improve business performance; and Boomers, to improve functionality.
Across all SMBs, the motivations to buy tech are to improve:
- Functionality 48%
- Data security 48%
- Performance and processes 47%
- Reliability 47%
- Cost management 46%
Fast- (10%-99% yoy) and hyper- (100%+) growth SMBs are much more likely to say technology is “essential” and that they “aggressively adopt/develop” it than their slower-growth peers. More than 40% of slow and no-growth SMBs wait until a technology is proven or until a purchase is “absolutely necessary”.
The tech SMBs will buy
SMBs have aggressive tech adoption plans. 18% will buy cellphones by the end of this year; 16% will buy desktop or laptop PCs; and 12% will buy tablets or printers. In 2019, 28% will buy PCs, followed by cellphones and printers (tied at 24%), database software (16%), and routers / switches and other system software (tied at 15%).
The time it takes SMBs to buy tech varies widely by category. For example, 32% of SMBs take only a week to buy printers and 31% take a week to buy cellphones, while only 13% take a week to research and purchase database software.
On the application software side, SMBs are most likely to buy marketing and salesforce automation before yearend (tied at 9%), followed by security, payments, design / illustration, and analytics software (all tied at 8%).
That software will mostly be hosted locally; most SMBs will host applications locally in 17 of the 20 software categories we surveyed.
Why SMBs move to the Cloud
For the apps that SMBs use in the cloud, ‘Anytime / anywhere access’ is the biggest driver of cloud usage. 49% of SMBs agreed that that is a factor in moving to the cloud, followed by cost savings (41%), security (40%) and disaster recovery (38%). However different SMBs have different priorities; for example cost savings is the biggest reason that SMBs with 20 to 99 employees move to the cloud, and security is the biggest reason that SMBs with 100 to 500 employees make the move.
What SMBs want from a tech vendor
SMBs are consistent in what they want from their tech vendors: clear and competitive pricing; and expertise in their industry. Many SMB principals have been in business for a while; they may have had a bad experience with ‘surprise’ fees and want to be sure they understand the total costs of tech ownership.
How SMBs learn about tech
Top sources of tech vendor information by sales cycle stage:
Want more information on SMB tech adoption?
Watch the recorded Fastcast on SMB Tech Purchase Plans.