Jasmine de Guzman  |  08/01/2019

How millennials choose their SaaS solution (Part 1)

As a digital service provider, you’re in the business of helping small business owners make the most of their digital presence. But a new wave of business owners - the millennials - are slowly changing the notion of what role they want their digital service provider to play in building and managing their digital presence.

In order to better understand how millennials choose their Software-as-a-Service (SaaS) solutions, we recently worked with the Local Search Association (LSA) to ask nearly 500 small business owners to tell us about their SaaS preferences (summarized in the “Meet the New Small SaaS Customer” report). Millennials represented nearly 29% of (138 respondents) of our total sample of small business owners.

In this blog post, we’ll take a closer look at millennials´ (aged 18-34) response to do-it-yourself (DIY) SaaS solutions and how digital service providers can adapt their current go-to-market offering to meet the needs of millennial business owners. Stay tuned for Part 2 of this blog post, where we’ll take a closer look at millennials response to a service-based SaaS solution.

Millennials are all for DIY

With many digital service providers today providing a full service experience from sale to fulfillment, respondents were asked to share if they’d ever purchased a solution online, without assistance from a sales rep or customer service agent. If they’d purchased a solution, they were also asked to share which SaaS solution they’d tried to set up themselves.

The results? Millennials led the pack in having tried a DIY SaaS Solution. In fact, as many as 82% of millenials had purchased a DIY SaaS Solution, which was 10% more than the overall sample and a whopping 30% more than baby boomer (aged 65+) business owners. Furthermore, Millennial SMBs were especially active in trying to set up their own website domain (57%), website (46%) and social media advertising (46%).

Looking even more specifically at the website case, 40% of millennials had built their own website using a self-service builder (compared with 36% of the overall sample) and when asked about their preference if they could re-build their website, 43% said they’d do it themselves.

As business owners, millennials are the definite leaders in the self-service/DIY space, and as a generally more tech-savvy generation seemed rather more enticed, than deterred by the prospect of building and managing their own digital presence.

The motivation behind choosing DIY

So, what motivates millennials to choose a DIY SaaS solution? Not unlike the rest of the respondents, there were two primary reasons: “it was free/inexpensive” and “we had more control”. This continues to support the notion that while small businesses have small marketing budgets, it doesn’t mean they are less engaged in shaping their digital presence.

Additionally, 22% of millennials were motivated to choose a DIY SaaS Solution because they “preferred not to deal with salespeople”; a stark contrast from the age groups 55-65 and 65+ where no one chose this answer. Once again, this speaks to not only millennials knowledge of technology (versus sales rep that are not digital natives), as well as their desire to independently make decisions without the influence of sales reps or customer agents.

Key takeaways

Millennials are actively and successfully using self-service/DIY solutions and that isn’t something that should be ignored. In other words, the market for a DIY offering within the digital marketing space is growing and that’s something digital service providers should consider capitalizing on, as a complement to their existing go-to-market model.

And while there are many existing self-service builders in the market, there is still opportunity for digital service providers to profit in this space. For example, a DIY offering could be a valuable way to funnel prospective millennials into customers, starting them on an entry-level, self-service option and gradually adding on more service and engagement-based offerings to add more value throughout the customer journey.

Not convinced yet? Stay tuned for Part 2 of this blog post, where we’ll take a closer look at when millennials would be willing to upgrade from a self-service to service-based offering, and what digital service providers need to do to convince millennials to upgrade to a more value-adding offering.