SaaS | | Published October 12, 2018

Why Customer Loyalty is Essential to SaaS Companies

It’s no secret that the SaaS (Software-as-a-Service) industry is on fire right now. More businesses are moving their technology stack from silo'd, on premise software installs to cloud instances with improved accessibility and reliability. Given so many companies are making this switch, why should you care at all about customer loyalty? After all, so many businesses are evaluating SaaS options that even if they churn, there will be five more waiting and ready to sign up, right?

Not necessarily. Demand for SaaS solutions may be at an all-time high, but customer loyalty still holds tremendous value to a business. Here are a few reasons why creating loyal customers is essential to successful SaaS companies…

Loyal customers keep your revenue stable – A profit/loss sheet filled with wild swings is a clear reflection of a lack of customer loyalty. Keeping customers happy creates a constant stream of revenue that makes it easier to grow your business. You can hire more full-time employees instead of relying on contractors, and in general you’ll find a higher level of trust and care with their work and interactions. Best of all, this improved level of communication helps in making customers even more loyal!

They provide essential feedback about your software – Relationships over time become more candid, so having several long-term customers will get you the feedback you need to take your product to the next level. Many companies with a “flash” or short-term product solution (i.e. niche seasonal accounting software) struggle to grow because they can’t get customers to stick around long enough to provide authentic product feedback. SaaS companies should always be listening to their most loyal customers.

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Customers that stick around let you forecast more accurately – Knowing the average value of each deal when you have long-standing customers provides accurate visibility of your revenue not only now but also in the future. Understanding how and when SaaS customers grow with your business (i.e. adding seats) is essential for projecting revenue that is realistic with your company growth trajectory.

They are a fantastic resource for the sales team – While notable logos on your website are great, they aren’t tremendously valuable if they aren’t long-standing and invested in the growth of your company. Loyal customers can help sales in two specific ways. The first is being a great reference for your company to use with existing prospects to prove the value of your business from a relatable third-party perspective. The second is driving new business for you by referring fellow companies to your software. Both ways are great examples of the benefits of loyal customers.


Wrapping up, customer loyalty is essential to SaaS companies because the competitive advantages provided are unmatched. They are not only great as a cornerstone for your financial future, but also for providing you with the honest feedback you need to grow your business. Treat your customers well and they’ll be the secret ingredient you’ve been looking for to find success!