Why Advisory Boards Matter

By Rob Jensen
November 04, 2015

Customer advisory boards (CABs) are one of the most effective methods for delving into the minds…

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Customer advisory boards (CABs) are one of the most effective methods for delving into the minds of your customers to gather insight and feedback into your current and planned offerings. You can formally engage and solicit input from existing customers while getting an insider’s view of what your target buyer needs from—and how they actually use—your products. An added bonus? A well-run CAB may even generate income for your company.       

But it takes time to plan and launch a successful CAB. The goal is not to convince customers that your company is amazing; the goal is to use participating customers as your brain trust so that you can understand how best to serve them, and by extension how to serve your larger customer base.

What is a Customer Advisory Board?

Also known as customer advisory councils, CABs are forums composed of a cross-section of clients that are designed to review industry trends, address mutual challenges and opportunities, and offer unvarnished insights and guidance to you, the host company. These councils are ideal for B2B vendors to validate corporate strategies, gather input on product development and deepen relationships with key accounts. Participating customers also have a lot to gain: They can influence product roadmaps, acquire best practices from peers, interact with executive management, help solve shared business challenges and much more.      

Customers that believe they are providing valuable input and guidance to your company are more likely to purchase new versions or be the first to try new products. This is especially true if they’ve had some influence on product development. In fact, advisory boards serve as a great platform for securing beta testers for your new offerings, helping introduce solutions and providing immediate market validation.      

The top benefit host companies derive from CABs, according to a recent survey of CAB practitioners, is product and solution direction (77 percent). Other top business benefits include strategic company direction (63 percent), market insight and intelligence (50 percent), and branding and positioning feedback (50 percent).           

Recent data also indicates that B2B host companies enjoy a 9 percent increase in new business among their CAB membership after one year. They also benefit from a 95 percent retention rate among participants. Finally, CAB member participation in reference programs, testimonials and thought-leadership efforts is 57 percent higher than among non-members.
These facts and figures can translate into significant incremental revenue amounts for host companies and often can self-fund a customer advisory program. But while these examples illustrate what can go right with a well-run CAB program, we’ve also witnessed things that go wrong.

For example, one executive went off-plan and presented his company’s standard investor-relations presentation. Attendees actually interrupted him and asked that he engage with them on the guidance he had originally requested. A different C-level executive used his introductory comments to talk ad nauseam about his yoga class; his attending direct reports were powerless to stop him. In another instance, a CAB member who was a huge customer of the host company insisted on bringing five additional colleagues to the meeting, then demanded a window-view seat for each.        

Perhaps the coup de grâce was the company that held its CAB social event at a gun range and offered members an array of high-powered weapons to shoot at will. They didn’t provide any instructions or take any safety precautions, and they hosted a full open bar. Fortunately, no one was injured.               

These extreme examples illustrate how CAB programs can quickly go off-track, but they drive home the point that, to be successful, programs must be properly established, resourced and directed. Because Ignite has overseen hundreds of CAB engagements for the last decade, we’ve developed advice for companies that want to initiate—or improve—a CAB program.

Allow enough planning time. We are often approached by companies that want to implement a CAB program and expect the initial meeting to occur a couple months from when they first talk to us. However, establishing a solid CAB program and preparing for the initial face-to-face meeting requires taking the proper steps. These include designing the CAB and creating a charter, defining membership criteria and recruitment, developing the agenda and meeting materials, preparing for the face-to-face meeting and much more. To properly complete these steps, we recommend a planning timeline of at least six months. Accelerating these processes may force companies to skip crucial steps, creating a rushed feeling and an inferior overall program. 

Follow a content-creation process. Sometimes, companies will create a CAB meeting agenda that they think will interest members, without asking them or soliciting input from other key internal stakeholders. We advocate using a proven content-creation process which first engages internal subject-matter experts to create a discussion guide of potential top-of-mind topics. That discussion guide is then reviewed by CAB members through individual interviews, typically conducted over the phone. Next, an executive summary report of these interviews is created to drive the meeting agenda and content and ensure the meeting is member-driven. Session leaders should also rely on this input when creating their meeting content, which should be designed to address member—not company—desires. Again, skipping or rushing these steps will only create a weaker meeting.       

Ensure your program is interactive. Too many companies treat CAB meetings as opportunities to present already-finalized corporate presentations, or worse, treat them as product demo or sales opportunities. One of the essential reasons CABs fail is that host companies put their company agenda before the desires of the CAB members. After all, successful advisory programs are not one-way conversations from the vendor to participants. Members are there to be engaged, provide real input to the company and learn from each other. At Ignite, we recommend the 80/20 Rule: Members talk 80 percent of the time; host companies talk only 20 percent of the time.             

Expertly facilitate the meeting. We’ve seen too many corporations rely on well-meaning but inexperienced internal folks who don’t manage the meeting well, keep the conversation too focused on the host company, can’t control internal executive demands or actions, and disappoint members. Would you want to interrupt your CEO when he’s speaking in front of customers? Talk about a potential career-limiting decision.        

Experienced third-party CAB facilitation ensures the meeting will be conducted for maximum member engagement and overall meeting success. In addition, expert facilitators can introduce innovative games that make gathering information more insightful and stimulating for everyone involved. 

Turn meeting insights into action. CAB members provide an abundance of valuable input and guidance to the host company. It’s critical that this feedback is accurately captured and translated into significant action items. These actions should be communicated back to the members, and they need to see proof of progress on those action items delivered in subsequent meetings.          

CABs also present golden opportunities for member-driven thought leadership (whitepapers, case studies, press releases, videos, speaking engagements, etc.) that benefit everyone involved. Members will be disappointed if they don’t recognize that their valuable input and time invested leads to material action by—or changes within—host companies.        

Getting these five fundamentals right will ensure your program covers the basic essentials and puts you on the path to success. Then you can address other aspects to establish an even more successful CAB, such as establishing a proper CAB program type, aligning internal stakeholders, measuring success and maintaining ongoing engagement.

Using CABs to engage customers is an excellent way for product managers and marketers to gather input for their product roadmap and overall business strategies. A well-run customer advisory council will provide your organization with material guidance that can put your company on a better, more targeted and profitable track for years to come.

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About the Authors

  • Rob Jensen is vice president of marketing for Ignite Advisory Group (www.igniteag.com), a consultancy that helps B2B companies manage their customer and partner advisory board programs. Rob has more than 20 years of experience in marketing, communications and business development leadership positions with leading enterprise software and technology companies. Rob has successfully overseen groups that generate global awareness, increase lead generation and enable sales teams. In addition, he specializes in initiating, managing and facilitating customer and partner advisory board programs in the U.S. and abroad. Contact him at rob.jensen@igniteag.com.


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