Dive Brief:
- Compared to last year, one-third of small to mid-sized businesses are moving slower with their purchasing decisions as buying committees expand, according to a Bredin survey of 500 SMB decisionmakers.
- Among respondents with 100 to 1,000 employees, 50% expanded their internal buying teams in the last year, with an average of seven people per team, according to the research firm. The same group averaged 4.1 external advisors dedicated to purchasing decisions.
- Cost pressures were the biggest source of friction in the procurement process for SMBs. “They're really thinking about, ‘Is this the right budget priority? Can we negotiate for a better deal? Technology is evolving quickly; do we really have the right solution?” Bredin CEO Stu Richards told Channel Dive.
Dive Insight:
SMBs face additional friction in the buying process as budgets come under scrutiny, technology grows complex and internal stakeholders proliferate. Bredin’s research illustrates a sizable opportunity for third-party IT partners to overcome those hurdles.
A quarter of small businesses employing1 to 19 workers have increased their reliance on third-party providers and vendors, per the survey, and 39% of midsized businesses with 100 to 1,000 workers also increased their reliance. Among the respondents, 75% prioritize transparent pricing — potentially opening them to resellers, brokers and consultants with knowledge and leverage in the sales process.
“What we are seeing is that technology purchases have become more collaborative,” Cloud9 Technology Consulting CEO Andy Torres told Channel Dive in an email. “There are more people involved, which can extend the buying cycle. At the same time, customers want someone they trust to help them cut through the noise, compare vendors objectively and provide pricing transparency. That’s where the right trusted advisor can add the most value.”
Technology complexity is contributing to the sales purchasing slowdown. AI has become a purchasing category with an excess of chefs crowding the proverbial kitchen.
“If you're integrating AI across the organization and you need to involve your head of marketing, your head of sales and your head of operations in addition to the IT and the financial teams, that could explain part of why those teams are getting bigger,” Richards said.
Budget concerns are slowing deals amid a stressed macroeconomy, putting the onus on third-party advisors to properly vet potential vendors and negotiate favorable terms.
“A lot of SMBs are really reluctant to spend in this economy,” Richards said. “There's so much inflation. They have tariff concerns and supply chain issues. It's a really fluid environment, and as a result, they tend to be more conservative in their spending, and that means that decisions just take longer.”
SMBs still want to buy technology, according to Bredin’s State of SMB study released last week. Across the SMB range, businesses are turning to technology and automation as one of their top three responses to geopolitical uncertainty — with midsized businesses more likely to lean on technology than to raise prices.
Midsized businesses are outpacing their smaller counterparts on planned tech investments. More than half of midsized businesses (56%) will invest in technology and IT infrastructure in the next year, compared to 31% of small businesses and 23% of very small businesses, according to the report. Midsized companies are most likely to spend on cybersecurity as well as AI and machine learning tools.
How SMBs are allocating tech investments
The study also found that all SMB segments consider product updates their favorite type of client nurture tactic. Partners can take note.
“If you're an MSP or tech consultant and you have a bunch of folks you want to upsell, a great thing to do is just send them an email or a note, and say, ‘Hey, one of our vendors has a new offering; you might be interested in it,’ or, ‘We have a new partnership, and here's something we might be able to help you with,’” Richards said.
