Successful business expansion means knowing what types of companies are the most receptive to your product.
There are numerous factors that go into predicting and identifying your customers, from business size to how they’re using your product.
That’s why we asked 715 small and midsize businesses (SMBs) about their 2019 and 2020 business software purchasing intentions and budgets (learn more about our methodology here).
With a strong understanding of which industries have the largest budgets, you can better target your marketing campaigns and minimize your risk of missing the mark.
Let’s take a look at the data on industry-specific interests and investments to help you find your SMB customers. We’ll also review our near-identical 2017 survey of 499 SMBs to help you better understand market trends and purchase intent within each industry.
Determine follow-through to aid your predictions
In 2017, we asked tech decision-makers at SMBs what types of software they were either using or planning on using in the next one to two years.
Based on their responses, we predicted how many companies would be using the cited software types this year when we ran a similar survey.
Following this year’s survey, we graphed the results. Take a look at the difference between our expectations and reality:
While we won’t be able to see the full picture until 2019 (and determine whether those companies who planned use within the next two years are working on implementation or not), there’s still a large difference.
Many of the software types cited by respondents increased only by one or two percent.
Why certain tech usage decreased and what to do about it
Several of these technologies—predominantly emergent ones such as artificial intelligence and virtual/augmented reality—actually dropped in both current and planned use over the past year.
There are any number of reasons for this, including smaller companies investing in software that is exciting but not necessary for their company at its current stage, or the challenge of maintaining a strong marketing campaign after the initial excitement for a particular type of software.
Top 5 budgeted-for software types by industry
Our most recent survey identified the following as the top ten budgeted-for technologies and software for 2019 among SMBs:
- Finance/accounting software (54%)
- Cloud computing (48%)
- Data and information security (47%)
- Digital marketing (45%)
- HR software (43%)
- Project management (40%)
- CRM (38%)
- Business intelligence and analytics (35%)
- Mobile business applications (33%)
- Internet of things (26%)
As you can see, when we asked respondents what software types had an actual line in their 2019-2020 budgets, the top nine categories were established software and tech types.
The only comparatively emergent technology on the list is the internet of things, which—despite its recent popularity—has existed as a concept since 1999.
With this in mind, let’s examine the top five software categories and, more specifically, which industries are interested in them. We’ll break the industries and budgets down graphically, and dive into the why behind the numbers.
If you don’t understand this data, your marketing efforts will come up short.
If you don’t work with (or sell) these particular software types, stay with me. We’ll end with some actionable tips that apply to your business either way.
1. Finance/accounting software
The standouts here are transportation and wholesale trade companies.
Transportation includes shipping and freight and often goes hand-in-hand with wholesale trade. These companies deal with a wide array of financial components, such as sales, trade regulations, international campaigns, and associated tariffs.
Knowing that, it’s easy to see why 87% of transportation companies describe finance/accounting software as critical to their business—a number that significantly surpasses the national average of 70%.
It’s important to note that while 100% of communications companies claim that this software category is either beneficial or critical to their success, they often have smaller budgets (averaging $9,330 per company for 2019).
This means that there could be as much money and a more receptive audience within the communications industry than, say, the media industry. However, in order to record the same profit, you’d have to work a lot harder and make a lot more sales.
2. Cloud computing software
Cloud computing has experienced an interesting trend since our 2017 survey. The number of companies that found such software helpful or necessary for their business dropped from 93% to 88% between 2017 and 2018, while the number of companies actually using it remained steady.
Transportation companies require uniformity across multiple countries, and need massive amounts of storage data. The U.S. government is similar in its scope, complexity, and need for consistency and ease of translation between local, state, and federal governing bodies.
3. Data and information security software
With the recent implementation of the GDPR in Europe, many companies that deal with EU clients must meet incredibly high security standards. This makes data and information security software invaluable, as the hefty fines associated with the regulations could leave smaller companies bankrupt.
The majority of the industries in the above chart frequently deal with international trade and clients; It follows that they would have larger budgets for data and information security software.
4. Digital marketing software
For the majority of the industries in the above chart, their degree of digital marketing investment makes sense. According to a recent IDC study, 84% of CEOs and VPs use social media to make business decisions.
5. HR software
From recruiting and payroll to analytics, HR software helps HR departments and companies ensure that the employees are looked after, and that businesses are filled with both skilled and satisfied workers.
The majority of the industries at play here rely heavily on hourly workers and a transitory workforce. With all of those facets of business operations to keep track of, it makes sense that industries like transportation, manufacturing and natural resources, and retail invest heavily in HR software.
What you can learn from these 5 examples
Wow, that was a lot of graphs—and a lot of information. Do you need a break? Drink a some tea, crack your neck, pet a puppy or something.
Feel better? Good!
Let’s get back to work, then, because it’s time to do something with all of this information.
How this benefits vendors who sell 1 of these 5 software types
If you sell one of these software types, it’s clear who you should target your 2019 marketing campaigns toward: the industries listed on whichever graph is relevant to your product offering.
Knowing which industries to target, however, doesn’t automatically mean smooth sailing. Since the industries listed above have the highest average budget for each software type, there’s a good chance the competition for their business will be stiffer than in markets with lower budgets.
It’s a good idea to target these industries, but set aside some of your marketing budget to focus on industries with less capital but a higher degree of interest. There will be less competition, and you could corner the market.
How this benefits vendors who don’t offer 1 of these software types
If you don’t offer products in any of these categories, don’t despair! There’s still a lot for your business to learn here.
It’s important to know exactly how various companies use your software, and to use that insight as a means of determining how to market it to similar companies.
You’ll start to notice trends in how each of those companies operate within various industries—their needs and how you meet them. From there, you can determine which industries have similar needs and target your marketing towards them.
Follow the model of looking at each industry’s place within the global economy. What type of workforce do they employ? Are there international requirements your product can help address? How do they reach their own clients?
And don’t forget to look at previous years’ investments by industry to see if it’s on an upward or downward trend, as that could be a big motivator for shifting your marketing focus.
A final caveat for all software vendors
Don’t discredit smaller companies or smaller industries with a higher rate of interest. The most useful metric while planning your marketing campaigns is to see which industries view your product as beneficial or necessary.
For example, let’s look at two industries: A and B. Industry A has an average budget of 30K per company for investing in your product, while Industry B has an average budget of 15K per company.
But Industry A only has a rate of budgeting for your software type of 30%, whereas Industry B has a rate of 60%. In this case, both industries have the same amount of potential money allocated to your product.
Industry B has a much higher rate of interest and investment, which means that companies within that market typically find your product more necessary.
By targeting your marketing toward Industry B, you have a higher chance of converting those companies that haven’t budgeted for your software into potential leads.
Creating interest where it didn’t previously exist is hard, but a more receptive industry could yield better results. It’s an untapped market, and tapping into it could make all the difference in setting your company apart in 2019.
Information on Capterra’s Top Technology Trends for SMBs survey
Capterra conducted this survey in June and July 2018 among 715 U.S.-based SMBs with more than one employee and annual revenue of less than $100 million. The survey excluded nonprofit organizations. The qualified respondents are decision-makers or have significant influence on the decisions related to purchasing technologies for their organization.
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