Building A Business Case For Your Customer Advisory Board: Five More Questions To Ask

Eyal Danon, President and Founder of Ignite Advisory Group.

Building a business case to initiate a customer advisory board (CAB) is often the first step toward creating the foundation for a robust program. Determining the answers to key business questions can not only uncover the urgency behind the need for a CAB, but also drive your program charter and garner the financial investment and executive commitment from your senior management team to support your program.

In part one on this topic, we addressed five initial questions you should be asking to verify that your company needs to start a CAB (likely as soon as possible). But the list should not be limited to those. Here are five more questions you should be asking to determine whether you should be initiating a CAB program:

1. Do our customers act as referrals to our prospects? Do you have an active and enthusiastic list of satisfied customers who are vetted and eager to engage with your prospects who seek referrals about your company’s solutions and services? If this process is ad hoc or “hit and miss” within your company — or worse, you don’t have such a program — you are likely turning your prospects away and missing out on significant revenue opportunities. Your CAB members are invested in your company, and they understand your products, strategies and operations. They are likely your biggest fans who are ideal to provide references to prospects. In addition, through their participation in your CAB program, your management will be well aware of their use of your solutions, and how mature, innovative and successful they’ve been with them.

2. Do our customers appear in our marketing materials? Customer participation in your marketing materials — case studies, video testimonials, webinars, articles, social media, etc. — can lend significant credibility to your brand. CAB members not only usually support such activities; they often go above and beyond to advocate for your company, such as speaking at customer conferences or at your company sales meetings, contributing a guest blog to your website or speaking in a video. Your prospects will likely be more influenced by the voice of your customers than your own messaging, and CAB members are usually the most supportive of such activities.

3. Does our company communicate thought leadership? Taking a proactive position on a shared industry challenge, illustrating numerous potential solution approaches and conveying how your customers are addressing and succeeding can make a big impact on your prospects. Doing so can position you as a leader in your market and a trusted source when companies look for a solution. Well-run CAB programs address, publish and promote potential solutions to shared challenges through the voices of influential customer executives — another big benefit of CAB programs.

4. How do our leaders learn about market trends? For some companies, market intelligence can come from a range of sources online, from IT analysts or from their folks in the field. But more often, such data can be ad hoc, inconsistent or even contradictory, with management making big moves on few (or single) data points to sometimes disastrous results. CAB programs uncover a wealth of direct industry information and trends — not only what your customers are experiencing, but also how your competitors are approaching them and other vendors you may want to partner with or even acquire. If your market intelligence gathering is minimal, inconsistent or nonexistent, a CAB program should be something for you to consider.

5. Are we aware of the ROI a CAB can bring? Research is quantifying the value a well-run customer advisory program can deliver. A 2014 report showed that annual sales of businesses with a CAB were 24% higher than those without one. In addition, in the first three years after an advisory board was set up, sales grew 66.8% compared with a growth of 22.9% in the three previous years. Finally, productivity (as measured by the ratio of sales to the number of employees) was 18% higher on average for companies with advisory boards. Firms that are investing the time and resources to create a robust CAB program are seeing real, quantifiable results.

By conducting some self-analysis and asking these important questions of your company, you’ll be well on your way to building a business case for initiating a strong customer advisory board program — and gaining the many benefits it can provide.

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