Building Sustainable Growth in Sticky Markets: Lessons from the UK Software Sector

I’ve had the great fortune to work with many founders and CEOs navigating a very typical shareholder’s paradox: their customers rarely leave them, but those same customers rarely leave their competitors either. This creates a unique strategic challenge that requires a fundamentally different approach to growth.

Software companies that thrive in these conditions aren't necessarily the flashiest or the most aggressive. They're the ones that understand their market dynamics and build systematic, expertise-led, compounding growth strategies that allow them to invest consistently in product development, expand their go-to-market capabilities, and reward their teams appropriately.

Here's what I've learned from working with businesses that successfully navigate sticky markets.

Understanding the Growth Reality

In markets characterised by high customer retention but low switching rates, your growth equation cannot rely on displacement. Instead, successful companies balance three core growth vectors:

Existing Customer Expansion × New Customer Acquisition × Market/Category Creation = Sustainable Growth

1. Maximising Revenue from Your Existing Base

Your current customers represent your most valuable growth asset. They've already absorbed the switching costs, trust you with mission-critical operations, and understand your value. The question is: are you harvesting the full opportunity?

Expand Within Accounts

The most successful companies I advise have moved beyond hoping for expansion to engineering it with care and empathy to their client’s problems. Their customer success teams are trained not just on retention metrics, but on spotting expansion signals: new departments forming, processes being managed outside the platform, acquisition activity, or growth phases.

One client, serving the manufacturing sector, turned this into a science with a client in the precision engineering sector.  Through structured quarterly business reviews, the account team identified that quality assurance and supply chain were using spreadsheets for related workflows. By demonstrating integration value, they expanded from 15 users to 47 users across three departments—a 213% account expansion.

Another customer, a fashion group had been a steady customer for three years when they were acquired by a larger retail group with five additional brands. Rather than treating this as a standard renewal, the account team proactively demonstrated multi-tenancy capabilities. A £28,000 annual contract became a £140,000 group-wide agreement.

Expansion rarely happens by accident. It requires systematic account planning, regular executive engagement, and genuine curiosity about the customer's evolving needs.

Transform Renewals into Strategic Partnerships

I advise clients to implement structured business reviews that demonstrate you care beyond the value of your annual subscription, surface new opportunities, and co-create roadmaps. This approach consistently drives net revenue retention above 110%.

One financial services software business I worked with was facing a customer who questioned the value of their analytics module. During the business review, they analysed usage data and demonstrated that the module had identified £180,000 in operational inefficiencies over 18 months—a 6:1 return on investment. The customer not only renewed but upgraded to premium tier.

Another of their customers, a healthcare trust, were frustrated with manual report generation—a classic at-risk customer signal. Rather than logging it as a support issue, their quarterly review became a co-creation session mapping exactly what they needed. When the feature was delivered two quarters later, they became one of the strongest advocates, referring three other healthcare organisations.

Develop Value-Based Premium Tiers

Price increases alone create resistance. Value-based premium tiers create choice. The companies I advise that successfully implement premium offerings focus on delivering genuinely differentiated value: dedicated support, advanced capabilities, custom integrations, or strategic access.

A logistics company operating 24/7 upgraded to premium tier specifically for dedicated support access. When they experienced a critical issue at 2am on a Sunday, the support team had them operational within 45 minutes. They've told everyone they speak to that this single incident justified the entire year's premium cost—and they've renewed at premium level for three years.

2. Winning New Customers at Decision Windows

While customers don't switch easily, they do switch at specific moments. The key is being present and relevant at precisely the right time.

Target Trigger Events Systematically

The most sophisticated companies I advise have built trigger event monitoring into their marketing operations: rapid growth, mergers, regulatory changes, leadership transitions, or funding events. These create windows where switching costs feel manageable.

When GDPR came into effect, one client had built compliance features early. They created a targeted campaign offering free compliance audits to companies using competing solutions. They won eight new customers—companies locked into competitor contracts for years but who needed to make changes anyway for regulatory reasons.

Win the Pre-Decision Phase

Research consistently shows that software decisions are 70% complete before vendors are even contacted. Companies that dominate the research phase dramatically reduce sales cycles and increase win rates.

One business I acquired created a brutally honest comparison guide: "When [Our Platform] Is the Right Choice (And When It Isn't)." It explicitly acknowledges which types of businesses are better served by competitors. One customer told them he'd decided to buy before the first call simply because they were the only vendor who acknowledged limitations. The deal value was £85,000 annually.

Another business developed an ungated implementation calculator showing prospects exactly how long deployment would take based on their specifics. One client’s COO used the calculator to evaluate three vendors, chose them because the estimates were most realistic, and indeed the project came in on time while she heard horror stories about other vendors. Transparency converted scepticism into trust.

Engineer a Referral System

Happy customers in mission-critical software are your best salespeople—if you give them reasons to advocate. The mistake most companies make is offering discounts. The companies I advise offer what customers actually value: priority feature input, executive access, recognition, and co-marketing opportunities.

O:ne company I led had a bank of referral customers who, rather than a discount, received priority input on the next major release.  They valued industry visibility far more than monetary incentives, and helped us win bid after bid.

Some SaaS business demonstrate the "VIP Advisory Board" approach. Inviting key decision makers to a quarterly advisory board with direct access to the executive team and genuine product direction influence.

3. Creating New Markets and Categories

The most elegant way to avoid competitive battles is to find spaces where you're not competing at all.

Geographic Expansion Done Right

Geographic expansion sounds straightforward but requires genuine commitment to localisation, partnership development, and patient investment. I've seen both spectacular successes and expensive failures.

One client's move into Scotland required partnering with a Glasgow-based consulting firm with deep relationships in target sectors. They understood local business culture and procurement processes in ways a London-based team couldn't. This partnership approach delivered seven Scottish customers in 18 months, with average contract values 15% higher than UK average because positioning was right from day one.

Their Netherlands expansion taught different lessons. They didn't just translate the interface—they adapted invoicing to local requirements, aligned contract terms with Dutch commercial law, and hired a native Dutch speaker for customer success. Obne Dutch based prospect told them they'd evaluated three UK competitors but chose them because they were the only ones who "understood how business works here." That customer expanded from €35,000 to €87,000 annually and introduced them to two other Dutch companies.

Vertical Specialisation

Rather than being everything to everyone, the highest-growth companies I advise develop industry-specific editions: not cosmetic changes, but genuine compliance frameworks, industry-specific workflows, and appropriate vernacular.

One client's healthcare edition was born from working with three NHS trusts. They built in CQC compliance tracking, patient data protection aligned with NHS guidelines, and healthcare operational workflow templates. When they won a competitive tender at a Community Health Trust against two much larger competitors, the procurement team said their demo was the only one where they didn't need to constantly translate generic features into specific needs.

Their financial services edition includes built-in FCA compliance reporting, regulatory audit trails, and integration with Xero and Sage. Stewart Campbell at Harrington Wealth Management chose them specifically because "Know Your Customer" and "Suspicious Activity Reporting" weren't just buzzwords—they were built into workflow. They'd spent months customising a generic platform previously; the vertical edition had them operational in three weeks instead of three months.

Adjacent Problem Solving

The companies achieving the highest net revenue retention carefully expand to solve adjacent problems customers face. Each new module is developed with customer input, ensuring product-market fit before launch.

One client spotted a pattern: customers were exporting data to Excel to create board reports. They worked with five customers to understand exact needs, built a flexible reporting engine with branded templates, and launched to their entire base. Within six months, 40% adopted it, adding an average of £4,800 to annual contracts. More importantly, they became the source of truth for executive reporting—deepening their mission-critical status.

Another noticed customers struggling with team training during growth. Rather than just documentation, they built an integrated learning management system directly into the platform. One customer told them it solved their biggest adoption challenge. As they scaled from 20 to 75 employees, the training module meant new team members were productive in days rather than weeks. They've since increased user count three times.

4. The Sustainable Investment Cycle

The companies I advise that achieve genuinely sustainable growth don't just focus on revenue—they create virtuous cycles where growth funds investment, which drives more growth.

Product Development: 20% of Revenue

The most successful commit to reinvesting approximately a fifth of revenue into product development. This isn't negotiable—it happens before profit distribution. This consistent investment means continuously improving the platform, staying ahead of market needs, and building features that drive expansion revenue.

Go-to-Market: 20% of Revenue

Rather than boom-and-bust marketing spending, maintain steady investment in content creation, event sponsorship, partnership development, and sales enablement. This consistency builds compound benefits—one client's organic search traffic grew 300% over three years through consistent content investment.

Team Rewards: Profit Sharing and Growth

The best companies implement transparent profit-sharing schemes—typically 10% of net profit distributed based on tenure and contribution. Additionally, they commit to salary reviews that beat inflation (for above average performers) and expand teams as revenue grows.

What Sustainable Growth Actually Looks Like

The companies I advise that excel in sticky markets don't pursue explosive growth—they pursue consistent growth. They target 25-35% year-over-year growth, which allows them to:

• Maintain healthy margins (typically 20-30% EBITDA)

• Invest consistently in product and people

• Make decisions based on long-term value rather than short-term metrics

• Build something genuinely enduring

That's not the growth story that makes headlines, but it's the one that builds lasting, valuable businesses.

Practical Advice for Software CEOs

If you're running a software company in a sticky market, here's what I recommend:

Embrace the market dynamics. Don't fight them—design your strategy around them. Build growth models that assume customers won't easily leave competitors, then systematically execute on strategies that work within that reality.

Systemise everything. Account expansion, trigger event monitoring, referral programmes, business reviews—none of this works if it's ad hoc. Build it into your operating rhythm.

Invest consistently, not sporadically. The compound effects of steady product and marketing investment far exceed sporadic big bets.

Be genuinely helpful. The companies that win in sticky markets build trust through authenticity: honest comparison guides, realistic implementation estimates, transparent pricing, and genuine customer partnership.

Patience compounds. Sustainable growth in sticky markets rewards consistent execution over time. Small advantages compound into significant market positions.

The businesses that win in these markets aren't necessarily the flashiest. They're the ones that understand their dynamics, build systematic approaches, and execute consistently over years.

What strategies have you seen work in sticky, mission-critical software markets? I'd be interested to hear your experiences.