How Customer Loyalty Can Drive B2B SaaS Business Growth

Customer loyalty is a key to repeat business and referral generation for any business model. For B2B SaaS companies, customer loyalty drives subscription renewals and brand advocacy, making it a critical component of a profitable business model.

This blog will look at why customer loyalty is vital for B2B SaaS businesses and how successful companies effectively cultivate it. First, we’ll discuss what customer loyalty is. Then we’ll explore why it plays a major role for B2B SaaS business models and how loyalty for B2B businesses differs from that for B2C brands. Finally, we’ll show you how you can leverage customer loyalty to promote B2B referral programs that expand your customer base and increase your revenue.

What Is Customer Loyalty?

Customer loyalty is a client’s devotion to a brand as expressed by their willingness to continue buying a company’s products and to recommend their products to others. In a B2B SaaS context, SaaS customer loyalty is expressed primarily through actions like subscription renewals, upsell purchases, referrals and product engagement.

B2B SaaS customer loyalty can be quantified through key performance indicators. One of the most important loyalty metrics is the Net Promoter Score (NPS), which uses a scale of 0 to 10 to measure a customer’s willingness to recommend a company, product, or service to a friend or colleague. How customers answer this question reflects their satisfaction with your company and their attitude toward referring you to others. Other important loyalty metrics include subscription renewal rate, churn rate, upsell rate, and customer lifetime value.

Why is Customer Loyalty Important for B2B SaaS Businesses?

Customer loyalty is a priority for B2B SaaS businesses for three major reasons:

  • Maintaining SaaS revenue depends on product subscription renewals, which reflect customer satisfaction and directly express loyalty through continued use of a product
  • Loyal customers are more inclined to make upsell and cross-sell purchases
  • Loyal customers help grow SaaS brands through referrals

In a nutshell, customer loyalty plays a pivotal role in helping B2B SaaS companies maintain and grow revenue. Maintaining a profitable B2B SaaS brand becomes financially unfeasible and practically impossible without customer loyalty.

What Are Key Differences between Customer Loyalty for B2B and B2C Brands?

For SaaS brands delivering services to B2B customers, customer loyalty differs from that of companies in B2C markets in several important respects:

  • Customers are defined differently: customer loyalty reflects the sentiments of not only SaaS product users but also others involved in the decision-making loop, such as department managers, tech support personnel, procurement managers, chief financial officers, other executives and investors
  • Different factors determine loyalty: where B2C SaaS users may prioritize values such as price or user experience, B2B customers place more emphasis on return on investment
  • Different considerations drive loyalty attitudes: where B2C SaaS users may measure satisfaction by price or subjective experience, B2B customers use key performance indicators to quantify value and satisfaction
  • Customer loyalty weighs more heavily on revenue: where the loss of a B2C SaaS customer may be offset by the acquisition of other customers of equal value, the loss of a single major B2B customer may significantly impact a company’s revenue
  • Cultivating customer loyalty requires a larger investment: where B2C SaaS customer service issues and loyalty programs may be handled entirely through automation or tech support and sales staff, B2B customers may require automated and manual support from a customer success team

These considerations mean that B2B SaaS brands must develop industry-appropriate strategies to manage customer loyalty effectively.

What Are Keys to Cultivating B2B SaaS Customer Loyalty?

B2B SaaS brands can build customer loyalty by taking several strategic measures. These include:

  • Prioritizing customers: Loyalty is a two-way street. When customers feel that a brand is loyal to them, they are more likely to reciprocate. Cultivate a company culture that values your customers by taking steps such as prioritizing customers in your mission statement, policies, and procedures
  • Deliver a great product with excellent service: Other strategies for cultivating loyalty will tend to fall short if your product or service underperforms. Monitor the quality of your product and support by tracking KPIs, such as product engagement and frequent support issues, and taking steps to address any barriers to a great user experience.
  • Build personal relationships with customers: Loyalty becomes more personal when your brand has a face. Simple strategies like assigning managers to customer accounts can help personalize customer relationships. For high-touch customers, consider periodic meetings, such as quarterly business reviews.
  • Set measurable loyalty goals: Customer loyalty metrics enable you to set loyalty goals and measurable benchmarks. Use KPIs like Net Promoter Score to establish goals for your loyalty program.
  • Track loyalty performance: Use your loyalty KPIs to monitor the loyalty of your customers as a whole, as well as customer segments and individual accounts.
  • Automate best practices for promoting loyalty and recovering at-risk accounts: Digitally monitoring loyalty KPIs allows you to implement procedures for delivering satisfaction and intervening when customers are experiencing dissatisfaction. For example, Totango’s customer health score tracking feature can alert you to accounts at risk of churn, allowing you to trigger automated or manual procedures for reaching out to at-risk customers.
  • Reward loyalty: Incentives for loyal customers can promote long-term loyalty, repeat business, and referrals. For example, you can offer special discounts for customers on their renewal anniversary or for customers who purchase high-ticket products.

By proactively cultivating loyalty, you can build your customer loyalty program into your standard operating procedures and replicate results that generate repeat business and referrals.

How Can You Run B2B Referral Programs Successfully?

You can proactively boost referrals by launching a referral program. For example, the Google Workspace referral program offers cash rewards for users who recommend apps such as Gmail or Google Meet. Program participants can share a unique link with a promotion code that lets their referrals be tracked.

An effective referral program should include a number of essential elements, such as:

  • Incentives for referrals, like cash rewards or perks
  • Referral partner tiers to recognize and reward high-performing referral partners
  • Marketing tools to promote referrals, such as links, email templates, and landing pages
  • A transparent tracking mechanism that both your company and your referral partners can use to monitor referrals and rewards

For best results, set measurable goals for your referral program using key performance indicators, track your results, and make ongoing adjustments. Testing different referral offers can help you improve your program’s performance.

Build Customer Loyalty to Bring in More SaaS Revenue

B2B SaaS customer loyalty translates into customers who renew their software subscriptions and recommend your product and brand to others. Cultivating loyalty yields higher renewal and referral rates for higher revenue. You can cultivate loyalty by taking steps such as prioritizing loyalty in your company culture, tracking loyalty indicators, and using automation to replicate standard operating procedures that instill client satisfaction.

Totango’s customer success platform includes built-in KPIs, workflows, and monitoring tools you can use to implement a B2B SaaS customer loyalty program. Start for free to automate your customer loyalty strategy for higher customer satisfaction, retention, and referral revenue.

Game changer for customer success! Request Demo.
Share on facebook
Share on twitter
Share on linkedin

Get the latest


Explore more articles