SaaS companies should assume their competitors are cold calling their existing customers to win business, according to saastr.com. Competitors often target customers around contract renewal dates and may offer deep discounts or buy-out deals to entice switching. This aggressive approach is common in competitive SaaS markets and can impact customer retention.
The article outlines several tactics competitors use, including maintaining databases of customer contract timelines to time campaigns effectively. They also capitalize on any downtime or security issues experienced by rivals to reach out to customers. Even customers currently satisfied with a vendor can be vulnerable if their champion leaves or if competitors persistently market to lost deals.
This practice reflects a broader trend in SaaS demand generation strategies, where companies invest in customer marketing to capture market share from rivals. Zoom’s strategy to buy out WebEx contracts exemplifies how aggressive discounting and buy-outs can disrupt established vendor relationships. SaaS firms with strong demand generation functions can gain additional marketing qualified leads (MQLs) by targeting lost deals over time.
SaaStr emphasizes that companies should not underestimate competitors’ efforts to steal customers and should maintain ongoing marketing efforts to protect and regain business. The article highlights that competitors’ campaigns around contract renewals and aggressive discounting are standard tactics in SaaS competitive dynamics.