The LAER Model and Customer Success: All You Need to Know

If you are into customer success (CS) then you must already be knowing that the main goals of CS are to renew subscription and expand customer accounts. As a proficient technology provider, you should realize the importance of different stages in the customer journey. And if you want to make the most of the customer journey, then LAER model is something you must be aware of.

There has to be a proper understanding of different stages of customer journey. When you break down the customer journey into these stages, it becomes easier to focus individually on those stages to finally achieve your business goal, i.e. revenue generation.

The subscription-based business model is relatively new for software companies. There is a massive shift happening in the company’s strategies as they are adopting the SaaS delivery model. The traditional strategies required for one-off purchase are no longer effective. Companies need to invest more on customer engagement strategies that help them gain recurring revenues from the customers. Hence, the LAER model is one such strategy that you can implement.

What is LAER model?

This is one of the customer engagement models introduced by Technology Services Industry Association (TSIA) that helps companies drive business growth. It basically encompasses the four stages of a customer journey as mentioned below:

• Land: This is the first step that denotes the customer acquisition stage. It simply means landing on the customer’s territory. The marketing and sales team are most responsible to help execute this phase.
• Adopt: This means after the customer starts using your product, they start liking it and become a regular user. The most responsible team for an efficient product adoption stage is the customer success that achieves this goal through strategic customer engagement.
• Expand: This stage comes after the customer has become comfortable with your primary solution. More business opportunities emerge that can be leveraged towards customer account expansion.
• Renew: This is the final stage of the customer journey when the customer renews their subscription at the end of their subscription period. After this, the customer engagement becomes a regular practice to continue renewals at every next due time.

How to implement the LAER model?

As we saw in the definition above, there are multiple teams involved in executing this model. Each of these teams have a particular goal in mind that ultimately serves the overall business need. So, let’s see how these teams can execute these stages in the customer journey.

Land

Although marketing and sales teams are majorly responsible for acquiring a new customer, some elements of customer success are also involved here. By taking cues for an ideal customer, they design strategies for new customer acquisition. Following steps are needed in landing stage:

1. Identify customer needs, pain points and challenges. You must be clear right from the beginning what problem you are trying to solve through your product or solution.
2. Create user personas and important use cases with respect to your solution.
3. Check the feasibility report of your solution and draw clear inferences on how your product would help solve the customer problem.
4. Define the value that you are going to achieve for your customers.
5. Initiate the sales process keeping customer success in mind and using the above preparation.

Adopt

Once the sales process completes, you need to help customers start achieving value from the product. Onboarding and time to first value are the important steps that you must execute with utmost proficiency. This is how you would execute the adoption stage in the LAER model.

1. Identify the key stakeholders who would be involved in the customer relationship. They include customers, customer success managers, end-users, customer’s technical lead, etc.
2. Create the value propositions for each of the customer’s personnel and present that to them.
3. Monitor the product usage through a customer success platform and identify the features that are being used and not used by the customer.
4. Drive effective customer engagement to enhance their product experience and encourage them to use more features in the product.
5. Identify customer challenges in the product usage that are preventing product adoption and fix them immediately.
6. Keep educating the customer about the new product features and train them for a better usage of the product.
7. Continue above steps until the user active time on the product increases and features usage passes the threshold.

Expand

Using the right customer success KPIs, you would know when the customer has adopted the product. When you are sure that the customer has gotten comfortable with the product, it would be the right time to approach them for more business. Below are the steps needed for account expansion.

1. Hold quarterly business review meetings to identify the evolving needs of the customer.
2. Show them the product performance that has helped them achieve their business goals so far.
3. Identify the solutions that you can provide and are most needed by the customer.
4. Align your sales team to create collaterals for the sales pitch for upsells or cross-sells.
5. Share with the sales team what value means for the customer and how they were able to adopt the primary product.
6. Setup a meeting with the key stakeholders from the customer side and present them with your new solutions.
7. Monitor the sales process through a sales automation platform until the closure of the deal.

Renew

No matter how many products or solutions you sell to your customers, until they renew their subscription for the next period, your customer success efforts are incomplete. Renewal is not just something you hope for. You have to pursue the customer through various steps towards this end.

1. Monitor the right KPIs throughout the customer journey.
2. Identify the early signs of customer churn. This may include reduced active time on product, number of logins, kind of customer queries, etc.
3. Fix these issues immediately to keep the customer health score green.
4. Prioritize the customers for the service whose renewal dates are close.
5. Encourage customers for brand advocacy.

Wrapping Up

All these stages in the LAER model require proper orchestration by the customer success director. Different customers are at the different stages of their customer journey. Hence, you would have to switch between different steps needed for them. The journey from LAER model beginner to LAER efficient takes time, experience and continuous learning.

By keeping a keen eye on your installed customer base, you can leverage this model to drive business growth. And once you get a hang of it, your customer success efforts would start reaping further benefits.