Many companies are now discovering the benefits of sponsoring a Customer Advisory Board (CAB). Want to get the most out of your CAB? You need to embrace these 5 rules.
When used effectively, this critical engagement tool greatly helps CEOs and staff to develop, validate, and enhance crisp business strategies. These insights are required for delivering 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. It is 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. Your CAB group meets once or twice a year to offer advice on your company’s direction. These meetings are a great way to validate that your vision and product direction are in sync with your customers’ priorities and expectations. Video: What is a Customer Advisory Board?
Getting the Best Results from Your CAB
Properly run CABs are different from every other type of customer event. Here are a few rules on how to make yours successful.
1) Invite only your most strategic customers to participate
The key word here is, “strategic.” What is a strategic customer? As a general rule you may consider them to be 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.
However, there are other options. “Strategic” may be customers who are small today but growing faster than the market. Or, they may be big or small customers doing something really innovative and interesting. The best answer to this question depends on your specific CAB objectives and what you are most interested in learning. Don’t fall into the trap of thinking that revenue size is the only dimension that matters. And, whatever you do, do NOT invite prospects to attend your CAB. It’s called a CUSTOMER Advisory Board because you want feedback from your customers. Customers share a common perspective; they have history with you; they know what you are and what you do. Prospects have none of this. Engaging prospects requires a different type of model.
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,
- Learn important information about your company’s business direction that can only be obtained via an non-disclosure agreement, and
- 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 aimed at a captive audience will be unwelcome. 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? How will these discussions help you make better business decisions?
Be focused. Many times, companies try to force too much information into the CAB meeting. Don’t turn this into a 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. Running your first CAB meeting? Here’s the perfect agenda.
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. They will also prepare appropriate pre-CAB and post-CAB communications for the customers. And, they will analyze the effectiveness of the meeting. Looking for the perfect facilitator for your CAB? Here are 9 characteristics of a great CAB facilitator.
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. You must be willing to entertain multiple 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 definite CAB operations manuals: Flipchart Guide(TM) to Customer Advisory Boards, Volumes 1 and 2. They offer case studies, best practices, templates, and techniques to help you unlock the secrets to sustaining your competitive advantage.
Mike Gospe runs KickStart Alliance’s Customer Advisory Board practice. Since 2002 he’s helped deliver more than 100 CAB meetings for some of today’s most innovative companies.