What Are Small Businesses’ Most Important Factors When Making Tech Purchase Decisions?

January 11, 2017

This article is included in these additional categories:

Customer Relationship Management | Digital | Local & Directories / Small Biz | Technology

Tech marketers targeting small businesses should focus on their owners, as 83% of small businesses lack an IT staff and 72% of owners say they’re typically responsible for making tech buying decisions at their business. That’s according to Salesforce’s recent “2016 Connected Small Business Report” [pdf], which delved into how small businesses use and perceive technology.

The report indicates that, on average, small businesses spend about 15% of their annual budgets on technology. That makes price a key consideration – and in fact it’s the most commonly cited “important” factor when making tech buying decisions, cited by roughly three-quarters (74%) of the small business owners surveyed.

While there’s less consensus surrounding other factors, many small business owners pointed to convenience (43%) and compatibility with current infrastructure (37%) as important considerations when making technology purchase decisions. Vendor trust (32%) and technology that scales with their business (28%) are important to more than one-quarter of respondents.

It’s clear that customer education is also important for marketers targeting small businesses. In a recent survey from Cox Business and Forbes Insights, small businesses that had scaled up cited the following as their leading technology challenges during that process:

  • Understanding changing technology needs and what products and services to use (31% citing as top challenge); and
  • Finding reliable, ongoing IT support for expanding technology resources (17%).

Research also shows that to improve the tech purchase experience, vendors should clearly articulate how the solution helps small businesses improve specific business goals.

So on which technology solutions are small businesses spending most of their allocated dollars? Most commonly, owners point to hardware such as laptops and services (46%), with financial software (33%) also consuming budgets for a sizable share. Productivity software, internet hosting, security systems and point of sale/point of purchase software are a little further back, while few (10%) say that CRM software occupies a lot of their spending.

In fact, relatively few small businesses report even using CRM systems. Most commonly, those who have customers and track customer information are using email tools (44%) and spreadsheets (41%) to store data, with about one-third (34%) using a written customer ledger. By comparison, only one-fifth are using a CRM app or system on their computer, and 1 in 8 (12%) a cloud-based CRM system. Likewise, there’s not much use of CRM systems by small businesses when managing sales opportunities, with 15% using a computer-based system or app and 9% a cloud-based one.

As regards the cloud, 62% of small businesses reported a great deal of trust or some trust in cloud-based technology services, versus 38% who maintain little or no trust. Roughly two-thirds (65%) of small business owners surveyed are using some cloud-based technology, with these businesses averaging 27% of their technology in the cloud.

Finally, a newly-released survey from Clutch examined the cloud preferences of 247 professionals working in IT departments across the US at companies of various sizes. Although it breaks down to a fairly small sample size when sorting by business type and/or platform, the results suggest that while enterprises favor Microsoft Azure, SMBs show a preference for Google Cloud Platform.

About the Data: The Salesforce survey was conducted online within the United States by Harris Poll on behalf of Salesforce, Nov. 17-28, 2016, among 304 small business owners in the U.S. with less than 100 employees and less than $1 billion in annual revenue. Data were weighted by number of employees to bring them in line with their actual proportions.

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