Software companies targeting e-commerce merchants face a troubling contradiction. Despite developing powerful solutions that genuinely solve merchant problems and a growing market projected to reach $7.12 billion by 2030, many find their pipeline growth inexplicably stalling. The more your sales team reaches out, the less incremental return they see.
If your company is experiencing this prospecting plateau – difficulty finding new e-commerce merchants despite increased outreach efforts – you’re not alone. Research reveals a systemic issue affecting nearly every software provider targeting this segment: you’re only seeing half of your total addressable market.
The Software Prospecting Paradox
The traditional formula for software sales growth seems straightforward: identify prospects with specific needs, demonstrate your solution’s value, and convert them into customers. Yet, software companies targeting e-commerce merchants are discovering a frustrating truth:
- Cold email response rates have plummeted to just 8.5%, with most visible merchants receiving dozens of similar pitches weekly
- Customer acquisition costs for software companies have risen to approximately $200-$500 per customer
- Average sales cycles have extended to 1-3 months for SMBs and 3-6 months for mid-market companies
“What stands out to me is the database of e-commerce companies,” notes Sander Kah, Co-Owner of Afosto, a headless commerce software company. “This has been valuable in helping us identify and acquire prospects that fit our target audience – ambitious e-commerce businesses.”
The challenge isn’t your product’s value or your team’s selling skills. It’s a fundamental limitation in your market visibility.
The Missing Merchants: Data Gaps in E-Commerce Prospecting
Recent analysis reveals a startling fact: approximately 1.12 million US e-commerce sellers (40% of the total 2.8 million U.S. online retailers) are absent from, or don’t participate in professional networks. Eliminating them from the B2B databases most software companies rely on for prospecting.
This isn’t just a minor data gap. It represents a massive segment of qualified software buyers who are effectively invisible to traditional prospecting methods.
But why would successful e-commerce merchants stay off professional networks like LinkedIn? The research identifies several key factors:
- Product Protection Priorities: In the competitive e-commerce landscape, merchants often prioritize protecting their business models and product strategies over maintaining professional profiles. A public LinkedIn profile showcasing their success might invite unwanted competition.
- Focus on Consumer Channels: E-commerce entrepreneurs typically focus their limited time on customer-facing platforms rather than B2B networks. Their success depends on reaching consumers, not other businesses.
- Resource Limitations: 65% of B2B executives cite insufficient bandwidth to manage LinkedIn profiles alongside core operations, a challenge especially acute for growing e-commerce businesses.
The result is a substantial “invisible market” of e-commerce merchants who are actively building successful businesses (and potentially need your software) while remaining absent from the databases you’re using to find them.
How Your Current Data Strategy Creates Conversion Problems
Most B2B databases like ZoomInfo, Apollo, and Lusha build their contact lists by crawling LinkedIn and similar professional networks. This creates three compounding problems for software companies:
- Oversaturation: The visible merchants in these databases are contacted by every software provider using the same sources, creating prospect fatigue
- Data Decay: By the time a prospect appears in traditional databases, they’re often already evaluating competitive solutions
- Market Blindness: You’re competing for the same limited pool of visible prospects while a larger segment remains undiscovered
The scale of this blindspot becomes clear when we examine the distribution of missing e-commerce merchants:
| Revenue Band | Annual Revenue Range | Estimated Share of Missing Sellers | Estimated Seller Count |
|---|---|---|---|
| Micro sellers | < $100k | 44% | 492,800 |
| Early-stage SMBs | $100k – $250k | 28% | 313,600 |
| Growth-stage SMBs | $250k – $500k | 15% | 168,000 |
| Established SMBs | $500k – $1M | 8% | 89,600 |
| Mid-market sellers | $1M – $5M | 4% | 44,800 |
| Enterprise-tier | > $5M | 1% | 11,200 |
These aren’t just micro-merchants or hobby businesses. They represent serious revenue potential for software companies, with more than 313,000 established businesses generating between $250,000 to $5+ million in annual revenue – all invisible to traditional prospecting methods.
Real Costs of Incomplete Market Visibility
This market blindspot directly impacts your software company’s performance across several key metrics:
Extended Sales Cycles
Research shows that improved data quality can shorten sales cycles from 120 days to 108 days, representing a reduction of 10-12 days. When you’re working with incomplete or low-quality prospect data, your sales cycles inevitably extend.
Elevated Customer Acquisition Costs
Software companies typically spend between $200-$500 to acquire each customer. This cost rises substantially when your team spends time pursuing oversaturated prospects who have already been contacted by numerous competitors.
Diminished Conversion Rates
As competition for the same visible prospects intensifies, conversion rates naturally decline. Your perfectly tailored pitch becomes just one of many similar messages in already-crowded inboxes.
Missed Growth Opportunities
The most significant cost is opportunity cost. While your team focuses on the visible market segment, competitors who discover the “invisible” merchants gain first-mover advantage with prospects who haven’t been bombarded with similar pitches.
Afosto discovered this advantage when they shifted their approach: “We use Wavo’s data as a starting point for our prospecting, gathering more information on leads before reaching out through ads, email, and phone.”
Beyond the Plateau: A New Approach to Merchant Discovery
Forward-thinking software companies have discovered that breaking through the prospecting plateau requires a fundamental shift in how they identify and engage e-commerce merchants.
The solution isn’t simply more outreach to the same oversaturated prospects. It’s gaining access to the complete e-commerce landscape, including the 735,000+ qualified merchants that traditional databases miss entirely.
Wavo’s merchant discovery platform identifies prospects through their digital footprint and performance signals rather than relying on professional network profiles. This approach reveals e-commerce brands that are focused on growing their business rather than maintaining LinkedIn profiles.
For software companies, this creates three distinct advantages:
- First-Mover Access: Reach prospects before they’ve been contacted by dozens of competitors
- Reduced Competition: Engage merchants who haven’t developed pitch fatigue from similar offerings
- Higher Relevance: Target prospects based on their actual business needs rather than incomplete profile data
The Complete Merchant Discovery Framework
Breaking through your software company’s prospecting plateau requires implementing a framework that addresses the systemic limitations of traditional approaches:
Step 1: Assess Your Current Market Coverage
Begin by understanding what percentage of your addressable market you’re currently missing. Most software companies are surprised to discover they’re only accessing 50-60% of their potential customers.
Step 2: Implement Complementary Data Strategies
Rather than replacing your current tools, supplement them with solutions that identify merchants based on their digital footprint rather than professional profiles. This approach gives you access to the “invisible 40%” of e-commerce merchants.
Step 3: Optimize Outreach for Previously Hidden Prospects
These previously undiscovered prospects require a different approach. They haven’t been bombarded with sales messages, so they’re more receptive to personalized outreach—but they also have different priorities than merchants who maintain active professional network profiles.
Step 4: Measure and Scale Results
Track key metrics like response rates, demos scheduled, and deals closed from both your traditional and expanded prospect pools. This allows you to optimize your approach and demonstrate clear ROI from your expanded market access.
Impact Metrics: Improved Prospecting Performance
Software companies implementing this framework see dramatic improvements in their prospecting results:
- Higher Response Rates: While industry standards hover around 1-2% positive reply rates, companies using Wavo’s platform achieve 3-6% response rates thanks to less competition and better personalization
- Improved Deliverability: Email campaigns sent to previously undiscovered merchants achieve 88% better deliverability than standard cold outreach
- Shorter Sales Cycles: By improving data quality, companies can reduce sales cycles by 10-12 days, accelerating revenue recognition
- Better Targeting: “What stands out to me is the database of e-commerce companies. This has been valuable in helping us identify and acquire prospects that fit our target audience—ambitious e-commerce businesses.” – Sander Kah, Co-Owner at Afosto
For software companies, these improvements translate directly into more efficient customer acquisition and accelerated growth.
Getting Started: Calculate Your Market Blindspot
Understanding the specific impact of market invisibility on your software company is the first step toward breaking through your prospecting plateau.
To understand the specific blindspots in your current prospecting strategy, try our Market Coverage Calculator. By analyzing your current tools and target market, this calculator will generate a customized report showing:
- What percentage of your total addressable market you’re currently missing
- The revenue potential of the invisible segment in your specific niche
- How competitive saturation is affecting your response rates
- The projected improvement in key metrics from accessing your complete market
Breaking Through Your Software Company’s Prospecting Plateau
The e-commerce software landscape is at an inflection point. While most companies continue competing for the same visible prospects with diminishing returns, forward-thinking software providers are discovering the other half of the market.
By expanding beyond traditional B2B databases and accessing the previously invisible 735,000+ qualified merchants, these companies aren’t just incrementally improving their results, they’re fundamentally transforming their growth trajectory.
As Afosto discovered, having access to this comprehensive merchant data creates a foundation for multi-channel prospecting success: “We use Wavo’s data as a starting point for our prospecting, gathering more information on leads before reaching out through ads, email, and phone.”
The choice for software company leaders is clear: continue pushing against the prospecting plateau with diminishing returns, or break through to the complete e-commerce landscape and access the opportunities your competitors can’t see.
Ready to break through your agency’s growth ceiling? Request a Demo and discover how complete market access can transform your prospecting results.