AI is everywhere, but how do SMBs really feel about it? We partnered with Localogy to find out. Our new report, AI for SMBs: A Reality Check, explores how SMBs perceive AI, how it influences their purchasing decisions, and where the opportunities lie for agencies and SaaS providers serving this segment. Buckle up because it’s complicated!

Mixed sentiment

The buzz around AI can create the assumption that it’s embraced by everyone. And, to some extent, that’s true.

In fact, our survey found that more than half of SMBs (57%) have been offered AI services, and 69% have experimented with AI features, pointing to a shift toward more intelligent operations. But it’s not just about what’s happened in the past, it’s also about the future. Looking ahead, 40% of SMBs expect AI to bring significant changes to their industries, with half anticipating they’ll be using AI more extensively in the coming years.

However, there’s a flip side. While 60% of SMBs recognize the benefits of time and cost savings, as well as improved operational effectiveness, many remain hesitant due to concerns over AI’s accuracy and reliability. Others worry about the overhype surrounding the technology and struggle with trust issues.

Should SaaS providers and agencies say AI?

That’s the dilemma many of them face when discussing AI with SMBs. 

AI is definitely making waves, but how much weight does it carry?

Around 30% of SMBs say that AI features influence their software purchasing decisions. While that may seem like a small percentage, it shows that AI still has an impact on the decision-making process.

For agencies, the picture becomes clearer: 70% of SMBs believe that marketing agencies should incorporate AI into their services.

However, one of the key takeaways from our survey is that SMBs seem more interested in automation than AI itself. While 86% of SMBs see the value in automation, only 62% feel the same way about AI. Why? Automation has a proven track record: 72% of SMBs cite time savings as one of its major benefits. In contrast, AI still feels uncertain for many, with 15% unsure of its advantages, compared to just 2% for automation.

For agencies and SaaS providers, this highlights a crucial distinction: AI is important, but automation is the feature that SMBs are actively seeking. They want something that works reliably and provides measurable results quickly. Automation, which has been in the market longer and has proven its worth, aligns more with the practical needs of SMBs.

When agencies and SaaS providers are thinking about whether to emphasize AI, these insights are important. Yes, AI is expected, but it’s also about how you talk about it and the approach you take. For SMBs, it’s not just about the technology; it’s about what it can do for them, and whether it can be trusted to deliver.

How do we talk about AI?

It’s all about the positioning and packaging.

When it comes to AI, it’s not just about what you say, it’s about how you say it. SMBs are looking for solutions that will make their lives easier, not more complicated. So, the key is to position AI as a tool that works in the background, quietly improving operations without overwhelming them with complexity.

Instead of presenting AI as the latest and greatest tech trend, try to focus on how it directly addresses SMBs' pain points. For example, highlight how AI can automate repetitive tasks, save time, and improve accuracy in ways that manual processes can’t. When you frame AI in terms of practicality and immediate benefits, it becomes a lot more accessible and appealing to SMBs.

Keep it simple. Many SMBs may not have a deep understanding of how AI works, and that’s okay. What matters most is how AI can make their day-to-day operations smoother. Avoid jargon and buzzwords that might sound impressive but will likely confuse or alienate SMB owners who are already juggling multiple tasks. Talking about AI in straightforward, relatable terms helps demystify the technology and makes it feel more approachable.

Focus on outcomes, not the technology itself. SMBs aren’t necessarily seeking out the "coolest" tech; they’re looking for results that impact their business. By emphasizing the real-world benefits, like faster processes, reduced costs, and greater efficiency, AI becomes something SMBs can relate to and see value in. At the end of the day, SMBs want tools that deliver measurable results that are easy to implement and use. 

What about the long-term?

Even with all the buzz around AI, many SMBs still feel uncertain. This uncertainty is an opportunity for SaaS providers and agencies to step in and fill the gap. One of the key recommendations from our report is that agencies should take on a more active role in helping SMBs understand AI. Rather than just selling AI as a feature, agencies can provide educational resources, show real-world examples, and guide SMBs through the integration process.

At the end of the day, it’s about helping SMBs understand that AI doesn’t have to be a daunting, futuristic technology. When presented as a practical tool with clear, easy-to-understand benefits, it becomes a lot more likely that they’ll embrace it.

Want more Insights?

Our full report goes even deeper into what SMBs are asking for, how to frame AI conversations, and what roles agencies and SaaS platforms should play as AI adoption accelerates. Get the full picture, including the top 5 strategic recommendations to drive adoption and trust.