Customer Advisory Boards are an Excellent Method of Customer Engagement
A Customer Advisory Board is not a focus group, user group, or outside board. It is a select group of 6 – 12 customers who are invited in on a regular basis to work with the company as partners. A typical arrangement is to have the members commit to be on the board for at least 2 years. They meet quarterly for a full-day to participate in discussing the company’s operations, challenges and future plans. The format is usually a mix of presentations and discussions culminating in a social event.
The most important benefit to the company is the sense of ownership that the customers feel. They will quickly become your strongest promoters and evangelists. In almost every case the customer becomes an excellent reference, and more forgiving when problems do arise. Other benefits are the insights learned from the customers, and the executive relationships which are developed.
- Learn what your customers want and how the company is performing
- Learn information about the marketplace and the competition
- Create promoters – customers who will be your evangelists
- Early detection of broad based problems
For the customer the benefit is an increased understanding of their supplier including a behind the curtains look at their operation, exposure to other customers, and education on the industry. Being treated royally is also a nice perk.
- Opportunity to Influence your strategy
- Better access to senior management
- Better access to engineers and company experts
- Career advancement through networking
- Networking with other customers about industry issues
- Everyone likes to offer advice, especially when they are well treated
- Tangible benefits – company swag, corporate entertainment, etc.
A common unstated objection to having a Customer Advisory Board is fear. The idea of customers sharing problems with other customers is frightening to sales people. That is an understandable insecurity. If real it points to deeper problems in the company. In my experience customers involved in CABs quickly assume the viewpoint of the company, and constructively engage in problem solving. Moreover, they tend to be more forgiving of future problems as they increasingly identify with the company.
A more subtle objection is that of the Innovator’s Dilemma. Clayton M. Christensen put forward the idea that over focus on existing customers can blind companies from developing products for new markets. This is a legitimate concern. However, ignoring your existing customers is not what Christensen had in mind. In fact, his recommendation was to have a separate organization focus on the new market. I would recommend having separate CABs for both the existing and the new markets. For start-ups this can be more of a concern. It’s not uncommon for start-ups to over focus on the needs of their first customer and end up building out a product that is not usable by anyone else. One solution is to have more than one customer in the CAB. In fact, membership in the CAB can be used as a selling point in the early stage of growth.
A common question is ‘Should we have sales people in the room?’ The pragmatic response is ‘can we keep them out if we wanted to’. A more measured answer is: ‘it depends, but definitely there should be no hard selling or defensiveness’. Company attendees can vary throughout the day. Attendance by senior executives at some point is absolutely required. Cocktails or dinner afterward is a good opportunity to include sales personnel.
If you have experience with a Customer Advisory Board I’d be interested in hearing about it.