Understanding and managing annual recurring revenue streams is more critical than ever. Imagine a customer engagement model that not only lands new clients but also ensures they adopt your technology, expand their usage, and consistently renew their contracts. That’s the power of TSIA’s LAER (Land, Adopt, Expand, Renew) model. This proven framework is designed to help technology suppliers maximize customer satisfaction and retention through four distinct stages.

Transitioning to subscription-based and as-a-service (XaaS) offerings can be daunting. However, the LAER framework allows your business to create a cost-effective and efficient customer engagement strategy that drives long-term growth. 

This blog offers an overview of the key findings from the TSIA report on the four phases of becoming LAER efficient. It provides actionable insights to enhance customer relationships and boost your bottom line.

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What is LAER? Mastering the LAER Framework

Land

Landing a customer marks the initial stage of the customer engagement journey. This involves all sales and marketing activities required to make the first sale to a new customer and ensure the initial use of the product or service.

Key Activities: Identifying target customers, executing sales strategies, and onboarding new customers.

Adopt

After successfully landing a sale, the focus shifts to ensuring the technology’s effective adoption. This stage involves activities that help customers fully utilize the solution and achieve their desired outcomes.

Key Activities: Providing customer success support, training, and resources to drive usage and integration.

Expand

Once customers see value in the technology, they are more likely to consider expanding their usage. This stage involves upselling and cross-selling additional products or services that align with the customer’s goals.

Key Activities: Identifying expansion opportunities, leveraging customer success insights, and collaborating with sales and marketing teams.

Renew

The final stage focuses on retaining customers and renewing their contracts. It is crucial to ensure ongoing satisfaction and demonstrate the continued value of the product or service.

Key Activities: Managing renewal processes, addressing customer concerns, and reinforcing the value proposition.

Related: Degrees of Proficiency in Renewal Strategies

The Four Phases to LAER Efficiency

TSIA identifies four distinct phases companies go through to become LAER efficient. These phases are marked by KPIs, organizational structures, and changes in selling culture.

Phase 1: Traditionally Transactional

Traditionally, technology companies maintain a transactional relationship with customers, focusing on individual revenue events such as sales and support transactions.

Key Characteristics: Sales-oriented, reactive support, and a focus on immediate revenue.

Phase 2: LAER Experiment

This phase begins when a technology provider starts offering as-a-service models. It becomes clear that traditional engagement models need to be optimized for these new offers, leading to the need for customer success initiatives.

Key Characteristics: Initial investment in customer success, learning to drive adoption, and addressing renewal challenges.

Phase 3: LAER Effective

The journey to becoming LAER effective can take years and involves learning the tactics required to effectively drive customers through all four LAER stages.

Key Characteristics: Established customer success practices drive adoption and effective renewal strategies.

Phase 4: LAER Efficient

Few companies reach this fourth phase, where they can stabilize or reduce their total cost of sales and marketing while effectively expanding and renewing customers.

Key Characteristics: Highly efficient customer engagement, optimized cost structures, and sustainable growth.

Related: The Four Phases to Becoming LAER Efficient

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Achieving LAER Efficiency with TSIA

TSIA members have extensively tested and refined the LAER model, successfully using it to transition to XaaS offerings and maximize customer satisfaction. TSIA’s expertise and best practices provide companies with the tools to implement the LAER model and navigate the four phases efficiently.

By leveraging TSIA’s insights, companies can build more effective customer engagement strategies, drive customer growth, and achieve long-term success in the technology industry.

Related: Introducing the Rule of 35, XaaS Success Zones, and RAC

Your Key Takeaways

• Maximize customer satisfaction and retention: By mastering the LAER (Land, Adopt, Expand, Renew) framework, your business can ensure customers not only start using your technology but also find ongoing value, leading to increased satisfaction and higher renewal rates.
• Navigate XaaS transition efficiently: Implementing the LAER model helps your organization manage the complexities of transitioning to subscription-based and as-a-service offerings, creating a cost-effective and efficient customer engagement strategy.‍
• Drive long-term growth: Utilizing TSIA’s insights and best practices allows your company to build robust customer engagement strategies, drive customer growth, and achieve sustainable long-term success in the technology industry.