How to get strategic insight from your best customers January 18, 2013Posted by Mike Gospe in Customer Advisory Boards.
Tags: CAB, CABs, Customer Advisory Board, Customer Advisory Boards, Customer Council, Leadership
Many companies are now discovering that a Customer Advisory Board (CAB), council or executive forum can greatly help them develop, validate, and enhance crisp business strategies that deliver sustainable competitive advantage while maintaining customer loyalty. If you are a company with more than $50M in annual revenue, you should have a customer advisory board. Your competitors do. This post gives you the basics of what you need to know to get the most out of your CAB.
What Is a Customer Advisory Board?
The CAB is not a sales gimmick, nor is it a product focus group made up of users who debate specific features. Instead, a CAB is a strategy-level focus group made up of senior executives whose decisions guide the direction of their company. It’s a sounding board for your executive team to confirm business drivers, test new value propositions, and preview business plans with leaders from your most strategic customers. This representative group of a dozen or so customers meets one or twice a year to offer advice on your company direction. These meetings are a great way to validate that your company vision and product direction are in sync with your customers’ business plans and priorities.
Getting the Best Results from Your CAB
Properly run CABs are different from every other type of customer event. Here are a few tips on how to make yours successful.
1) Invite only your most strategic customers to participate
An advisory board is made up of your best customers – representatives of the 20% who provide you with 80% of your revenue. By having a board comprised of the “20%” you not only find out how to get more customers like them but also how to keep them coming back. Avoid inviting competing customers within the same market segment, as competitors will be leery of discussing their challenges in front of one another. And, avoid inviting prospects or partners to participate with these customers. Prospects and partners have different interests.
2) Don’t treat the CAB as a sales event
Customers attend CABs for 3 reasons: to network with their peers to discuss business-related topics of mutual interest, to get important information about your company’s business direction that can only be obtained via an non-disclosure agreement, and to provide you with specific feedback and input because they believe you are genuinely interested in what they think and you are prepared to take action based on their input. Treating the CAB as a thinly veiled sales event to a captive audience will be viewed as an unwelcome use of their time. They will not return to the next CAB meeting.
3) Set the right agenda
Begin with the end in mind: what vital information do you want to receive during the CAB? Be focused. Many times, companies try to force too much information into the CAB meeting, turning it into a five or six hour lecture from product managers with little time for discussions with customers. Instead, the best CAB meetings are made up of 80% facilitated discussion between the customers, with the executive team politely listening.
4) Invest in a facilitator
Customers often complain that CAB sessions hosted by a company executive are highly biased because they overtly drive the customers to a seemingly apparent conclusion. Using a professional facilitator can help create an unbiased atmosphere and a safe environment for customers to voice their views and experiences. Look to the facilitator to help you set the most effective agenda, prepare appropriate pre-CAB and post-CAB communications for the customers, and analyze the effectiveness of the meeting.
5) Be prepared to act on the information you collect
Although the CAB is an input and feedback session, not a decision-making body, customers will be eager to know what actions you take based on the discussion. It is therefore imperative you set an agenda that is sincere and that you are willing to entertain counter points of view. The basic research rule applies: Don’t research something that you’re not willing to change.
Planning Your CAB
It’s never too early to start planning. For more details on how to bring your advisory board meetings to life, check out the new Flipchart Guide(TM) to Customer Advisory Boards, Volumes 1 and 2. They offer case studies, best practices, templates, techniques and best practices to help you unlock the secrets to sustaining your competitive advantage.