Accelerate Growth with an Effective Customer Advisory Board
Table of Contents
What ia a Customer Advisory Board?
A customer advisory board is a select group of customers that meets as a group regularly to advise a business on strategic matters related to the organization's future and its products and services. Each customer member is generally an executive of their organization with many years of experience and insight.
Each member provides guidance in uncovering, nurturing, and supporting the business’ relationships and interactions with the rest of their customer community. It also offers third-party advice to a business’ leadership team on their corporate strategy, go-to-market plans, sales programs, marketing tactics, and product or service portfolio.
Now that we know what a customer advisory board is, let’s see what it could do for you, and set one up.
What Does an Advisory Board Do? Customer Advisory Board Benefits.
When established and run correctly, an advisory board can be one of your most effective resources for sustainable business growth. It can assist you in growing your customer base; increasing customer retention, loyalty, and engagement; improving sales per customer; increasing market share; and adjusting to changing customer demands before your competitors.
As the name suggests, a customer advisory board comprises customers you have deemed to be influential, insightful, and beneficial to the future growth of your business.
Purpose of a Customer Advisory Board.
These customers use your products and services regularly and have their fingers on the pulse of the larger customer community and the broader industry. The advisory board’s objective is for these key customers to communicate their knowledge and expertise with you and your team as valuable business advisors. It enables you to understand your customers’ priorities and align your plans with theirs.
How Do I Set Up a Customer Advisory Board?
How can you ensure that your customer advisory board will be supportive and help your executive team realize your business goals? Select the correct board members, define how you would like them to participate, and establish clear roles and responsibilities.
Let’s review each of these further.
Choose the Correct Customer Advisory Board Members.
Get the right combination of people. It is critical to choose an assortment of customers who embody a broad sample of your customer community. The selection process is not a popularity contest, nor should you choose only those customers who purchase the most.
Choose customers based on how well they can help you achieve your business goals. For example, if most of your customers are on the East Coast but you want to increase your sales on the West Coast by 30% over the next twelve months, you should consider including one or two West Coast customers to advise you on changes you may have to make to expand sales in that region.
Other criteria may include their company size and future sales potential or unique knowledge of the changes taking place in your industry.
Encourage customer communication. Your advisory board members should participate enthusiastically and feel free to communicate their true thoughts and feelings, which will drive activities that are valuable to your business and all other customers. It should be a win-win for both groups. As a result, choose customers who are frank and express their thoughts and opinions without hesitation.
You want truth-tellers, not yes-men. Advise your customers to tell the truth as they see it, no matter how uncomfortable it may be for your team. If all you want is a group of customers telling you how wonderful you are, how great your product is, or simply what you want to hear, then don't waste your team's time or your customers’ time by assembling an advisory board. Nothing will change.
When selecting the ideal number of members, less is more. An advisory board’s size is not the critical factor in its success. The value of your advisory board is fulfilled when your customers are willing to actively participate and honestly share their knowledge and beliefs. Five or six well-chosen customers may provide greater business value than a larger group of ten or twelve members.
How to Run a Customer Advisory Board.
Your advisory board’s objective should not be to simply talk amongst yourselves each time you meet. Your object should be to take action, helping propel positive change for your business and your customers' businesses. This action demands active participation.
However, depending on the location of your office and your customers' requirements, frequent in-person meetings may not be possible – especially when there’s a global pandemic going on.
When formalizing member guidelines, consider this:
How frequently will you hold in-person meetings – quarterly, bi-annually, or annually?
Will all in-person meetings be held at your headquarters or another location?
As an alternative to quarterly in-person meetings, would it be possible to hold more frequent Zoom meetings and get together in person once or twice a year?
How long will each meeting last? One to two hours for a Zoom call? A half-day for a bi-annual in-person meeting?
How will you request member feedback at other times of the year? Could you create and distribute surveys or questionnaires?
What do you expect from customer participation? Will you ask them to provide written reports on areas of interest to you? Will you require them to speak at conferences on your behalf or be included in future marketing campaigns? Are you interested in them helping raise your company’s profile to potential customers across a specific industry?
The answers to these questions will be specific to you and your business goals. No matter your answers, it is essential to remember to do the following:
Set up an agenda that targets the needs and challenges of both you and your customers, identifies and helps achieve future goals, and has an action-oriented strategy for successful implementation.
Notify your customer advisory board members of the next meeting date and location well in advance, and do not cancel it unless necessary. Also, include a copy of the meeting's agenda and any relevant information they should review before they attend.
Provide hard copies of all presentations or other resources used during the meeting. Don't assume that your board members will print them out themselves.
Respect every person’s time by ending the meeting on schedule.
Advisory Board Roles and Responsibilities.
Establishing a list of clearly defined roles and responsibilities is vital to ensuring expectations are set from the beginning. Here are some items you may want to include:
Length of each member’s term. A two-year term is most common. This gives members enough time to accomplish specific objectives but not too long that they become complacent and ineffective. You can, however, make changes to your membership roster at any time if a member is not attending meetings or actively participating.
Grounds for dismissal. You can remove an advisory board member for a variety of different reasons. They may include:
Missing a specified number of meetings.
Actively operating against the best interest of your business.
Speaking inappropriately about your business in a public forum.
Not meeting financial obligations by missing payments on products or services purchased from your company.
Is an Advisory Board Paid?
If the first words out of a customer's mouth when you ask them if they are interested in being an advisory board member is “do I get paid,” “will you give me a discount on future purchases," or "what sort of reimbursement will I get," you should probably hang up the phone and move on to the next person on your list.
While each business handles this differently, it is not common for advisory board members to receive payment. However, you may decide that a small amount of financial compensation is appropriate as a thank you for their time and insights. It could take the form of an additional discount on products and services above and beyond what customers typically receive.
It would be appropriate for your business to pick up the bill for lunch or dinner board meetings. Still, you would not be expected to pay for travel expenses like hotel stays, airfares, or taxi fares for customers visiting your office for on-site meetings.
If you ask board members to join you in your exhibitor booth at a trade show to speak with potential customers or give a formal presentation to conference attendees, some financial reimbursement would be suitable.
The final word on customer advisory boards.
A customer advisory board is not a one-sided relationship where you continually promote your next product release and use each meeting as a sales pitch to get targeted customers to buy more.
A well-organized, properly executed, and effectively run customer advisory board can do more for business growth and increased customer sales, engagement, and loyalty, than the most effective marketing campaign.
It demands active listening from you and good collaboration from both groups. These handpicked customers are your business advisors. They are there to challenge, educate, inspire, and drive you. An active and engaged board will drive a larger, engaged customer community, resulting in greater demand for your products and consistent sales growth.
