The lack of feedback of a stepper motor limits its performance, as the stepper motor can only drive a load that is well within its capacity, otherwise missed steps under load may lead to positioning errors and the system may have to be restarted or recalibrated. The encoder and controller of a servomotor are an additional cost, but they optimize the performance of the overall system (for all of speed, power and accuracy) relative to the capacity of the basic motor. With larger systems, where a powerful motor represents an increasing proportion of the system cost, servomotors have the advantage.

There has been increasing popularity in closed loop stepper motors in recent years. They act like servomotors but have some differences in their software control to get smooth motion. The top 3 manufacturers of closed loop stepper motor systems employ magnetic encoders as their feedback device of choice due to low cost and resistance to vibration. The main benefit of a closed loop stepper motor is the cost to performance ratio. There is also no need to tune the PID controller on a closed loop stepper system.

Many applications, such as laser cutting machines, may be offered in two ranges, the low-priced range using stepper motors and the high-performance range using servomotors.