In a world defined by flexibility and real-time value, it’s baffling that so many enterprise SaaS companies still lock customers into rigid annual contracts—regardless of whether they’re getting value or not.
The justification is always the same: revenue predictability. Predictable ARR keeps investors happy and helps companies forecast growth. But let’s be honest—locking customers into a product they no longer want is a legacy mindset and doesn’t apply to software. It’s the software equivalent of hotel cancellation fees. It doesn’t help with customer lifetime value.
Take Salesforce, for example. It’s the poster child of successful SaaS, but also one of the most notorious when it comes to rigid, complex, and binding contracts. Anyone who’s dealt with enterprise procurement knows how tough it is to back out once you’ve signed. There’s rarely room to exit gracefully—only clauses and penalties.
And it’s not just large enterprises. Even early-stage startups—who should be nimble, customer-focused, and adaptive—adopt the same tactics. The result? Disillusioned users, strained relationships, and a brand built on legal terms rather than product trust.
There’s a fundamental difference between retention and captivity. One is earned. The other is forced.
Sure, annual commitments make sense when there’s mutual benefit. Offering discounts for upfront payment is reasonable and often appreciated. But locking a customer in when they’ve made a good faith effort and found no fit? That’s not customer success—that’s coercion.
In today’s cloud-native world, value is realized continuously—not front-loaded. Customer loyalty should be re-earned over time, not extracted through legal terms.
If your product delivers genuine value, customers will stay. If it doesn’t, they should be free to leave—without having to lawyer up or pay to escape.
That’s the philosophy we’ve embraced at BalkanID. Our pricing is transparent and value-based: customers can cancel anytime and receive a refund for the unused portion—no fine print, no penalties. Trust is what we sell. Trust once earned, tends to be reciprocated.
It’s time we move past the old playbooks. The next era of SaaS won’t be about locking customers in—it’ll be about building products and relationships strong enough that they won’t want to leave.
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