BIA/Kelsey Briefing: Is Software the Answer to Local’s Challenges?

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One of the underlying themes at BIA/Kelsey’s recent SMB Digital Marketing conference was extending beyond marketing services for SMBs. This includes operational tools that address their pain points and “lock-in” deeper (read: higher retention) relationships.

This is something we’ve covered several times on this blog over the past six months, and it continues to ramp up as a key topic in the local media world. The SMB Digital Marketing show kicked off with a session that dove right into it, led by Executive in Residence Warren Kay.

Managing growth is central to all of this. What is the threshold for burn rates for Saas offerings that require time to build “lifetime value” relationships? This goes back to the above equation: The threshold should be high to build products with operational lock-in and perennial revenue.

We unpacked the session’s takeaways in a report last week. The executive summary is below and BIA/Kelsey clients can log in to the client portal to view or download the entire thing. Anyone interested in the topic can email me to engage. This will be an ongoing area of focus.

The rest of the play-by-play blog coverage from BIA/Kelsey analysts at the conference can be seen here. And we’ll be doing an analyst round table on this topic Friday. Check back here to see the video, and check out our past video round tables here.

Summary: In this briefing, we examine a few key conference themes introduced on the panel “Focus on Profits: Winning Strategies for SMB Marketing” at last month’s SMB Digital Marketing event in Austin, Texas. One involves balancing the opposing SMB requirements of high-touch sales (to reduce churn) and automation (to improve margin). The answer? SaaS-based operational products that have found success at the enterprise level will play a crucial role in the future of local. Another key question is how start-ups in the SMB space should balance growth and profitability. The general view emerged that high customer lifetime value dictates a focus on growth over profits in the short term.

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