Why does customer feedback important for SaaS companies?

Have you ever considered the most common factor that contributes significantly to the success of SaaS companies? You're probably thinking about products, cutting-edge technology and tools, talented employees, expertise, and so on. It's true, but one thing that makes your products or services customer-centric is "listening to customer feedback"

Creating customer-centric products and services involves listening to their opinion, want, requirement, and expectation. Customer feedback is one of the most effective methods for identifying bugs/defects in products and resolving them.

According to Forbes, customer-centric businesses are 60% more profitable than companies making a decision based on “gut-feeling.”

Development teams in SaaS businesses involve in building various high-tech cloud-based software solutions that can be accessed from anyone to anywhere. So the SaaS companies will never know if their customers are getting value from their product unless they receive feedback?

As a result, one of the most important and challenging tasks is to create software products based on the expectations of your customers. Feedback is essential for improving SDLC and creating high-quality software products.

Microsoft survey says, 52% of people around the globe believe that companies need to take action on feedback provided by their customers.

What are the biggest challenges in customer feedback?

There are two major challenges while getting feedback from customers.

Receiving feedback from multiple sources

Assume one scenario that your customers noticed some issues with their website, which you are developing. They contact you via various emails, sending you PPTs, explaining their issues with the video conferencing tool, support tools, and so on. It is a time-consuming process to centralize data and there are high possibilities that you miss out on some of the important feedback that needs to address first.

According to a survey by Microsoft 66% of consumers have used at least 3 different communication channels to contact customer service.

Understanding customer feedback

Why do customers send unclear and ambiguous feedback? The reason is that the platforms they use to send feedback may not have features to make feedback visually understandable. For example, there is no option to take a screenshot or record the screen, and there are no annotation tools. That is why it is extremely difficult for you to completely understand customers' feedback & bugs visually.

As a result, you won't be able to meet your customers' expectations by delivering high-quality products, and they may become dissatisfied with your services. You eventually lose them.

According to Harris Interactive (digital consultative custom market research agency), 89% of consumers have switched to doing business with a competitor following a poor customer experience.

Check out how you can overcome these challenges while keeping your employees and customers happy.

The Importance of customer feedback for your SaaS business

Improve the quality of the product

Receiving feedback indicates that you need to improve in some areas. Feedback is very necessary while the customer’s software product is in the developing and testing phase. UAT/Beta testing is critical in the software development life cycle because resolving issues/bugs during the development stage saves time and resources that can be used to build quality products.

High customer retention

Consider the customer's perspective: what they want is a high-quality product that improves product usability and their overall experience. Quality/bug-free products always result in a happy and satisfied customer. The quality product reduces support cost which is a sensitive factor for any consumer. Early feedback and resolution are the most effective ways to build better products that result in high customer retention.

According to Ameyo, 67% of customer churn is preventable if firms resolve issues the first time they occur.

Reduces development cost

If you are developing a software product for a client, early feedback is critical in order to make changes before it is too late. More changes or defaults in the product necessarily require more time to develop and test the product. It causes a delay in the software development life cycle. It also takes up time and resources on your development team, resulting in higher development costs. Therefore you can reduce costs by getting early feedback from customers.

Reduce time to market

Faster turnaround of issues/feedback greatly reduces development and testing time. It is always critical for SaaS companies to reduce SDLC time in delivering products to clients as quickly as possible. Delays result in higher development costs, dissatisfied customers, product quality compromises, increased time requirements, etc.

Identify trends

Market trends, particularly in the SaaS business, are always changing. So many new products are introduced over time, and many of them become obsolete in a short period of time. As a result, asking for customer feedback helps you to get in touch with current trends.

Easy decision-making

When a company plans to create a new software product, senior members and employees frequently brainstorm. Customer feedback, on the other hand, can be quite critical in identifying customer needs.  How can someone make the product without knowing what exactly customers want? So feedback makes your product development and related decisions soo easy.

What are the best practices for collecting customer feedback?

Well, there are so many general techniques to collect customer feedback such as customer surveys, customer interviews, phone calls, social media surveys, etc. But some standard practices are used by successful SaaS companies. Let’s reveal it.

Feedback Widget

One of the most proven successful methods of collecting feedback on websites/web apps. If you have your own website or building your client's website, the feedback widget helps you a lot with getting suggestions on improvement areas. It's also the easiest and smartest way to collect feedback via annotated screenshots or screen recordings with voice comments.

Best recommended tool: Redpen Widget - A smart solution for sending and receiving unlimited visual consumer feedback in one spot, along with all technical data needed to quickly resolve customer issues.

Popup surveys

Popup surveys are the most basic method of encouraging customers to act and provide feedback on your website. There are numerous types of pop-up surveys, including brief surveys, ratings, emoji pop-ups, star ratings, chatbox pop-up buttons, specific feedback pop-up buttons, and so on. Basically, it encourages users to provide quick feedback while they are already on your website.


Email feedback collection is still widely used by many businesses. It's mostly used by e-commerce companies when customers buy something and complete transactions. Companies are sending emails to their customers inquiring about their product usage experiences. The same thing happens in SaaS businesses, where they are asked to provide genuine feedback via email in order to learn how they feel about SaaS products.

According to a survey by Ameyo, 57% of customers would rather contact companies via digital media such as email or social media rather than use voice-based customer support.


This is a fun and engaging way to collect feedback, especially on social media platforms.  Customers need to choose the best option out of available options. MCQs and open-ended questions are most widely used.

Live chat

Live chat is a completely action-based technique of collecting feedback from customers. When a user visits a website, it usually appears. Customers can post comments and ask questions there. Customer service representatives can get immediate feedback from clients without having to wait for an email response.

According to a survey by Microsoft, 30% of US consumers rate chatbot interactions as “very effective” in dealing with customer service issues.


The success of SaaS business depends on how much your customer expectation is fulfilled with the product and service that is delivered to them. Knowing the pain point of customers is the key point for your business. That is what feedback does, you exactly trying to find out their needs and requirement.

Customer feedback also helps to make better business decisions, improve the quality standard of product, and all result in happy and satisfied customers that brings your Saas business to the next level.