The Secret Life of Customer Advisory Boards (CABs) – Part 1

Focus group meetings and customer recognition events provide transitory business value. Today, transparency and deep dialog are the most effective path to customer retention and innovation. How can you create a cohesive customer community that has the potential to transform your organization? Customer advisory boards (CABs) just might be the answer.

Solution If you were the VP of Marketing of an Atlanta-based technology firm three years ago, chances are you were not having fun.

Jill, the VP, was working diligently in her office one day when the CEO walked in to pay a visit. The CEO, Don, proudly announced that he was ready to fund a customer advisory board (CAB). The company just recently received a hefty VC financial boost, and the CAB would help them grow faster.

Or so he hoped.

Don hand-picked the members he wanted to invite–over 30 individuals–and Jill had no say in the group nominees. Over a two year period, the CAB experienced sixty % turnover. Group members were tired being used primarily as a test bed for new innovations. The CAB disbanded with little fanfare.

When I recently interviewed more than 30 B2B companies with CAB experiences, similar debacles were reported more often than you would think.

What is a CAB?

If you are considering building a CAB program for your organization, tread carefully. Begin first with understanding its true purpose.

A CAB is defined as an ongoing customer membership program. Ideally, it contains fewer than 16 members. Well designed programs help B2B companies:

  • Refine and validate strategic plans.
  • Radically improve customer service.
  • Uncover new product and service opportunities and ideas.
  • Deepen customer relationships.
  • Provide value added, confidential discussion forums for customers and industry allies.

Here is what a CAB is NOT. It is not a collection of hand-picked friends and diehard fans who will perpetuate groupthink.

The Purpose of a Customer Advisory Board

Customer advisory boards differ from focus groups, impersonal satisfaction surveys or celebratory recognition events. They are infinitely better than relying exclusively on your sales team to report second hand information. Most importantly, they serve to create a long-term, collaborative container for deepening your customer relationships and community impact.

While researching companies who deploy CABs, we found that their sponsor companies had several common traits:

  • They are sincerely growth-oriented.
  • They believe in gathering unfiltered feedback to refine their future plans and services.
  • They are passionate about developing trusted advisor relationships with senior decision makers and industry influencers–and making a difference.
  • They need to adapt quickly to industry and regulatory shifts to ensure continuity.
  • They are action-oriented, and are willing to implement actions that advisors recommend.

If these traits describe your firm, you may just be well-positioned to build a strong CAB program. In our next article, we will discuss nine strategies to design an effective Customer Advisory Board and myriad examples of companies with high performing boards.

Until then, keep your office door closed and your CEO distracted.

[Photo courtesy of freedigitalphotos.net]

[This post originally appeared in FastCompany.]

Copyright 2011, Lisa Nirell. All rights reserved.

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