Customer Advisory Boards (CABs) are one of the many means of engaging with your customers. Although they can be managed in different areas of the business, Customer Advisory Boards (CABs) are a typical B2B strategic initiative that can help drive customer loyalty, ultimately resulting in increased revenue.
But why is it so important to create a customer advisory board? Business today is no longer impersonal. Customers demand a deeper relationship with you because they want to be assured you understand their ever-changing needs, driven by their own customers. They require continual dialogue to ensure they have made the right decision investing in you and their participation in a CAB can help.
CABs come in all shapes and sizes, and can benefit both large and small organizations. There is no one size fits all model because they must be designed to meet your business needs. They can be global, regional, industry-based, or functional. They can be product or service based, can be online or in-person, and they can have monthly, quarterly or annual touch points. The customization of a CAB is unique to each one, depending on how each need to be structured with each providing different value and benefits for your company as well as for each member of the customer board.
There is a cost to administering a CAB. You will require a budget to execute it as well as a dedicated individual, internally or externally, to manage it. The administration of a CAB can exceed well over $SIX digits in execution costs but it does not have to. It really does depend what you want to achieve. But no matter how much you allocate from a budgetary standpoint, the ROI is extremely attractive, as the benefits of a CAB can include:
- Validation of your company strategy
- Feedback on your product roadmap
- Participation at customer conferences
- Being a reference for your sales organization
- Participation in endless marketing opportunities
- And many other benefits….
And there are key benefits for your customer too. Depending on its mandate and charter, your customers want to participate for the following reasons:
- Gain insight into your company’s future strategy and offering to ensure they are in sync with your direction
- Participate in peer-to-peer networking to find out what others are doing with your offering and in the market to reaffirm they made the right decision
- Feedback and guidance on their internal issues from your company and their peers on the customer board
- Access to your senior leadership team and influential members of your company on a one-to-one basis
- And more…..
Here is just a sampling of the types of CABs you can create (one or a multiple of them) with each having their own charter and mandate:
Customer Advisory Board
- Top tiered customers who are advocates and evangelists both internally at their company and externally to the market
Product Advisory Board
- Top tiered customers who have invested heavily in your offering, are most knowledgeable about how your product works in their business, and want an opportunity to influence or shape its future
Partner Advisory Boards
- Top tiered partners who have invested heavily in training their staff to deliver your offering to the market. They can be an extension of your sales team.
But there are challenges and pitfalls that many CABs experience both at start-up and other various stages. If you understand them at the outset, you should be able to manage them throughout their lifecycles. Some key challenges include, but are not limited to:
Identify CABs Strategically
- Companies who do not deem CABs as strategic initiatives will deem them as programs with budget line items which will be at risk when it comes to budgets cuts.
Senior Leadership Team (SLT) Buy-in
- Ensure your SLT is in full agreement with the establishment of CABs. Senior leaders must be engaged with the CAB and its members at all times. It’s a good idea to include an outreach program where each SLT member calls a customer on the board two times per year.
Assign a Budget
- Create an annual budget including costs of deliverables and an in-person meeting and/or online tool.
Appoint a Chair
- A Chairperson is key to driving the mandate from a customer perspective, and keeps the company at arm’s length with minimal influence.
Make the Agenda Compelling
- The agenda should be created by the customer board and the company alike.
Identify Yearly Outputs
- It is important to have an agreed-upon output (ie white paper) to communicate the value a CAB brought to the company. Additionally, the white paper can be used as a marketing tool for the company.
Keep it Small
- The larger the board, the more likely its value will be diminished. Large boards can become unwieldly because of diverse opinions.
- Do not allow sales to use it as a bargaining tool when trying to close a deal. If this happens you will not get the right customer profile on the board.
Overall, CABs must be a critical component of your corporate strategic plan with an accompanying budget to support it. Engaging with your customers at a deeper level can validate your own company’s goals, vision and strategy in a more meaningful way. In return, CABs can enhance customer loyalty and ultimately drive more revenue. Customer Advisory Boards – a strategic imperative!