Customer Loyalty Tactics for Software and SaaS Companies

User Retention🕑 Reading Time: 6 Minutes

It takes about 11 months on average for a SaaS company to make back the cost of customer acquisition and retention.

Therefore, customer loyalty is crucial to the success of the business. Software and SaaS businesses need their customers to find satisfaction in both their software and services.

If your company can provide exceptional customer service in tangible formats, you will be vastly more successful in customer retention. Join us as we explore some effective customer loyalty tactics for software and SaaS businesses.

SaaS and Sofware Companies Live off Customer Loyalty

Customer value and lifetime value (LTV) are some of the aspects needed to create a recurring income stream. The higher th LTV, the more sustainable the business. Since customer retention is cheaper than acquisition, there is no stronger incentive to hung onto your customer. Increasing customer retention by 5% can boost your profits by 95%.

Your business can optimize existing customers by inspiring loyalty. Here are some customer loyalty tactics that will keep churn to a minimum:

1. Raise Your Price

A higher price will create a perception of increased value. Once the customer is will to pay for the services despite the price increase, the perception becomes a reality. The customers have committed to a cost, and that cost reflects on their balance sheet.

Raising prices also creates more revenue to spend on customer acquisition programs. A customer who spends more on a product is likely to engage with the software. If you can improve product engagement, you can improve customer retention and minimize churn.

2. Reconsider Your Value Product Proposition

Why did your customer choose your software in the first place? It is hard to pinpoint the exact reasons, but you can work out a good sense of why. Understanding your unique selling or value proposition can give you a few clues.

Rethink your value proposition because it is the core feature that attracts the customer. If, along the way, you deviated from the value proposition, make the necessary changes to get back on track.

3. Reassert Your Value Proposition

Just in case your clients have forgotten the core of your business, remind them. A value proposition that was successful in acquiring customers should be sufficient in retaining the clients.

You can use email marketing and touchpoints to reassert your value proposition. Make your value proposition stand out in the mind of the customer. The more you prove your value, the more the customers will believe you.

4. Re-Analyze the Onboarding Process

Anything that played a role in acquiring a customer should also serve to retain the client for the long term. Re-analyze your onboarding process. Find the features that are compelling, appealing, and motivating to potential customers. These are the same traits that should keep the customer happy for the long haul.

5. Follow up on Every Interaction with the Customer

Do not limit your customer interactions to customer requests. Go far and beyond, solving a customer’s problems.

The average service request looks like this:

Add another layer to your customer communication protocol. Have a follow-up process:

6. Avoid Customer Satisfaction Surveys or Any Other Surveys

Below is an example of how some software and SaaS companies handle customer communication:

What is the possible result of such an exchange? Sure the problem is solved, but the customer is not satisfied. On top of everything, the customer is annoyed. You care about your survey more than you do their well-being.

Surveys are double-edged swords. On the one hand, they collect valuable data. On the other hand, they may aggravate the customer.

Apart from surveys, another way to collect valuable information is through phone calls. While you are making your rounds, checking out on clients, ask them a few diagnostic questions to assess the performance of their SaaS experience.

Customer surveys; are they a universal evil? No, but they are quite risky.

7. Upsell

An upsell in SaaS is the process of engaging with a customer on a deeper level. You raise your level of service, and the customer pays more. Successful upsells increase profits.

Below are the benefits of upselling:

For a long time, many people have viewed up selling as an underhanded technique to squeeze extra cash from gullible customers. Upselling is a win-win situation. The customer gets higher value products, and the business makes more profit.

8. Emphasize Engagement as Soon as Possible

One effective way of mitigating churn is to drive engagement. According to Lincoln Murphy, engagement is when the customer realizes the value from your SaaS.

How does a customer realize value? By using the product. Whatever action you can take to persuade the customer to interact with your product, take it. Whether it requires phone calls, emails, questions, encouragements, or blatant bribery, do what you’ve got to do.

The sooner a customer engages with your product, the faster they will realize value.

9. Develop a Regular Interaction Schedule

Interact with your clients as frequently as is possible. Interaction will depend on the size and nature of your software or SaaS business. If you are offering enterprise-level services that are worth thousands of dollars a month, you want to stick closer to your clients.

Do more than just calling for upselling opportunities or solving problems. Call your customers to say, “Hi.” Email your clients to wish them a “Happy Birthday.” Create a partnering atmosphere, and your clients will be loyal to you.

10. Send Targeted Tips

When a customer completes a specific action in your SaaS, prompt an automatic email to send them. For example, if the client creates an invoice on your bookkeeping software, automate an email aking about user experience and offering tips and tricks. Direct the user to relevant YouTube videos and useful articles on the subject.

Simple tweaks like these can go a long way in mitigating churn and inspiring customer loyalty.

Bonus Tip: Assign Each Customer to a Retention Specialist

You need a customer retention team. If you have a few clients, each paying thousands of dollars, a retention team can be effective. A customer retention expert will be someone whose job is to interact with the customer regularly. Their task is not only to answer technical queries but also to check on the clients and keep them happy.


Customer loyalty is one of if not the most critical activities in software and SaaS businesses. Churn is the public enemy number one in this industry. Thankfully churn is a factor within your control. You can do something to mitigate churn rates and improve retention.

With the strategies above, you can inspire customer loyalty and increase your retention revenue and profit. I hope the tips will help you as you charter a way to SaaS success.