Customer Advisory Boards

A CMO told me the other day, "I know which customers are strategic to my company. My challenge is making my company strategic to those customers."

His comment demonstrates the shift in marketing that is currently occurring within high-tech and service companies. In these organizations the marketing function is no longer about awareness, brand or feel-good programs. It is a results-oriented entity enabling the relationships and market position necessary to increase customer value and drive revenue.

As a result of this shift, 2010 ITSMA research shows an increase in the following tactics as part of marketing strategies: 

• Thought leadership development
• References and testimonials
• Senior level relationship management programs, customer advisory boards, councils

• Collateral (brochures, datasheets, etc.)
• Hospitality
• Sponsorships of sports/Cultural events
• Print-based direct marketing
• Traditional print/media advertising
• Public trade shows

Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2010 www.itsma.com/access/research.asp


Has your company made the shift? If not, what's holding you back?

The Beatle's classic song Come Together has been released by other legendary bands such as: Joe Cocker, U2, Aerosmith, Guns N’ Roses, Michael Jackson, and of course Marilyn Manson.  The chorus is simple, yet powerful:

“Come together, right now, over me.”

 I worked with a large manufacturer and services company who brought us in to design and launch a Customer Advisory  Council (CAC). I asked the Executive Sponsor and EVP, why was it important to have his top customers come together.  He rolled his eyes and proceeded to share an all too common story that starts with “My CEO met with the CEO of our  biggest customer and here's what …” 

The dream: This customer wanted them to build a solution that would change the industry. The customer convinced his boss (the CEO) to invest $100 Million in developing this solution, stating that the other 20 players in the industry had the same problem and would all but beg to have it.

The result: Two years after the release, no one including the original customer wanted this solution. The firm had rechanneled key resources down an innovation path that didn’t solve a problem or enable their customers to reach new levels. In the process, this company lost much credibility in the market, fell behind the competitors on developing solutions for real issues, and ended up writing off the $100 million investment. 

How common is this: All too often I have found CEOs or key executives have not had a single conversation with a customer or key industry person. CEOs and Executives have used their power to unilaterally and without validation from anyone else re-direct key people, dollars, and strategy only to be completely off base, setting the company behind.

The reality: Most products and solutions need a market, not just one customer.  It is critical to include more than one in the ideation, design, testing and launching of any key initiative. This goes for development as well as strategy, marketing programs, sales approaches, and pricing models. In fact, the only topic off limits is profit margin. Everything else should be filtered through a group decision makers…this is the key to sustainability and predictability.

Bottom line: Unless your offerings can be supported by a single customer, make sure to secure Collective market input and validation from the decision makers of your most important customers by having them come together, right now, over you!

1. Use the voice of the customer to create an outside-in plan
2. Ensure the plan is well understood by employees
3. Integrate the plan in your management system

You know how it feels when you get off a really fast ride and plant your feet back on solid ground? You feel like you’re still “moving.” I’ve experienced that same feeling after a Customer Advisory Council meeting. Things go so fast, there’s so much to talk about that when it’s over, you feel like you’re still going 100 miles an hour! 

And that’s probably a good thing. These ongoing engagement programs with top customer decision makers help the host team understand the market more clearly. The continuous customer feedback from these programs gives the executive team the ammunition they need to drive strategy, planning, marketing, innovation, acquisitions, sales and service. I emphasize continuous for a good reason. The dialog doesn’t stop when the meeting is over – you can learn even more by keeping the momentum going and engaging your customers between meetings. In her blog, "Is the End the End or Just the Beginning?" my colleague, Misty Strawser, articulates the importance of “getting to work” soon after the meeting and continuing to share the feedback received.

Keep the Momentum Going!

Council meetings are rich in member feedback with discussions that provide the host team with an intimate look into the “world of their customers.” Internally, the executive team has to very quickly “get to work” to evaluate what they heard and identify what they will do next – therein lies the opportunity to engage your customers between meetings. 

What’s the best way to do that? First and foremost, regular communications to members to keep them apprised of any updates, progress, company news, etc. are a must. But there are other options too, and in my next blog I’ll talk about Sub-committees and some best practices on how to make them successful.

When clients come to us asking how to take their customer relationship programs to the next level they are typically asking how they can increase the level of relationship within the account. In other words, how do they move from vendor-type relationships with procurement to C-suite trusted partner status?

 The answer: Customer Advisory Councils and Executive Sponsor Programs.

A Customer Advisory Council is the first step in our B2B playbook. This forum of 20-30 decision makers represents your best accounts. A typical program includes facilitated, face-to-face discussions twice per year with sustaining activities, such as subcommittees, between meetings to keep members engaged.

Unlike other marketing activities that are focused on lead generation or measurement, Customer Advisory Councils are solely focused on building relationships and generating the market insight necessary to keep your business ahead of the curve.

Clients who have implemented Councils have seen, on average:

• 6% increase in customer retention
• 22% increase in new sales
• 10 additional customer references

The second tool is an Executive Sponsor Program (ESP). This formal approach to one-on-one relationships is best implemented following a Customer Advisory Council.

An ESP aligns an executive within your company with an executive in the customer account. The program exists outside of the sales cycle and outside of any particular deal or transaction. The intention is, over time, to create interdependency.

In interdependency, you become co-creators with your customers. Together, you and your customer create something that neither of you could do on your own. You become part of your customer’s long-term strategy.

Used in tandem, Customer Advisory Councils and Executive Sponsor Programs strengthen customer relationships and create sustainable, predictable, profitable growth. In doing so, they require the commitment and resourcing of any major corporate initiative.

 So, if you truly want to take your customer relationships to the next level, start with a Customer Advisory Council. Integrate the insights gained from the Council into your organizational planning process. As your company becomes more market focused, move to programs like ESP. Along the way, use your referral process and NPS programs to gauge how well you are moving the needle.

Many organizations today think about gaining market perspectives from their customers in a broad array of forums.  Customer advisory boards, customer roundtables, focus groups, voice of the customer programs and many other avenues are used to gain insight.  But one unique way to gain insight to guide an organization’s leadership team is through the eyes of the supplier – a Supply Chain Council.

Supplier meetings are pretty common.  I think for the most part, suppliers dread going in to many of these forums.  I often think of an environment where suppliers will likely be told that they need to become more efficient, they need to lower their costs, create more ROI and deliver their products more timely with higher quality.  Sounds dreaded… but Standard Register is different.

Standard Register established their Supply Chain Council late in 2009 with a different intent.  The goal and objective of the council is to help Standard Register achieve “advantage” in the market.  That could be in the form of new products, faster delivery, access to new markets, access to advanced technology, and access to advanced thinking.  The intellectual firepower executive relationships in SR’s Supply Chain Council is impressive.

Greg Greve, Standard Registers Vice President, Supply Chain states: “One of our objectives was to leverage the collective brain power of our supply chain partners.  Although we’re only a $700 million business, we have strong business relationships with at least a dozen thought leading suppliers representing both similar and different markets than SR.  Bringing these thought leaders to the table has positioned us to gain advantage in the way we think, the markets in which we participate, and the manner in which we conduct business.”

So far, the program has been an overwhelming success.  It’s aligned the suppliers with SR’s goals, objectives and priorities, and provided thought leading insight to advance the business. 
 

These are exciting times for this 98 year old company to be on the move toward a transformation that will propel Standard Register into the next century of success, and the Supply Chain Council is a great enabler.

Most of the programs I work on are initiatives that include our client's top customers and prospects.  This can be in the form of a Customer Advisory Council, Executive Sponsor Program, Executive Summit, etc.  The role of our client is to listen to the needs and aspirations of their top customers, understand their challenges, and ask clarifying questions so they can in turn respond with a plan of action to meet their customers’ needs.

For the last year I have worked with a client to develop a different kind of Council – rather than a select group of customers, this Council is made up of my client’s top Supply Chain Partners.  This changes the dynamics of the typical “advisory” council where customers tell the client what is going on in the market and identify their related challenges.  For this Supply Chain Council initiative, my client has identified their biggest challenges – key issues they are facing as they transform their business.  Hence, the role of their Supply Chain Partners is to collaborate on ways they can help by providing guidance and assistance in areas where they have experience and expertise.  They do this because they have a vested interest in my client’s success – they are top suppliers, so anything they can do to help my client be successful helps them, too. 

Program Planning
As you might imagine, program planning is a bit different for this group as well.  The agenda topics focus on specific issues my client seeks guidance on, so much thought went into providing clear context around those issues.  Extensive planning was done up-front to:

• Agree on the top challenges to be presented to the Supply Chain Partners
• Develop a clear-cut definition of each challenge
• Provide Council members pre-reading material to help prepare them for the discussions

Additionally, we arranged a pre-meeting conference call to address any questions and provide further clarity around the topics.  The call was well attended, which told us the Council members wanted to come to the meeting prepared and ready to help! 

Rich Dialogue
Our most recent meeting was just a few weeks ago – the group’s second meeting.  The response from the Supply Chain Council members was phenomenal.  For topics outside of their area of expertise, many members brought information gathered from their colleagues ahead of time to share with our client.  Roundtable discussions were rich in dialogue and members fully immersed themselves into helping our client, offering to open the doors of their companies to do so. 

Actionable Results
During the post-meeting debrief with our client, the leadership team carefully reviewed all the input, focusing on the items that were most relevant and strategic to the issues they were facing.  In the end, the team settled on a list of seven prioritized follow-up items which they communicated to the Supply Chain Council members. 

Continuous Engagement
We are currently developing Mission Statements for each activity and arranging meeting schedules, which include engaging with the Supply Chain Council members one-on-one as well as in small sub-committee groups.  I look forward to assisting in this process, helping my client gain the collective guidance from their important Supply Chain Partners as they join in collaborative next steps.

There’s probably nothing more difficult in an organizations’ sales and marketing approach than to establish a footprint and presence in a new market.  The complexities and challenges are numerous:  Lack of brand awareness, lack of cultural knowledge, solutions that are not “localized” and the list goes on and on.  Not even to mention the fact that executive relationships become even more challenging for a foreign company thousands of miles away from the target market.

But one company is well on its way to achieving great success with the challenges of developing executive relationships in a fairly new and now highly targeted region for account expansion and growth:  EMEA.  That company is Harris Broadcast Communications (“BCD”).

Most organizations struggle to gain access and to connect with a new group of executives in a new region – but Harris BCD was up for the challenge.  Because of its growing product portfolio and fast changing market – they realized they must be successful at the executive level in EMEA to continue to grow.  

Harris BCD’s recently delivered their first EMEA Executive Advisory Board.  It took a great deal of focus and a targeted approach to gain access and enough trust with a group of EMEA based executives – but Harris pulled it off.  The approach BCD used was to selectively choose a small group of influential executives from strategic customers in the EMEA region.  Richard Scott, SVP and GM of the EMEA region, and his sales team were the primary relationship owners. 

What is most unique about this situation is that Harris was able to attract a group of 14 executives to connect with them in a manner shared by relatively few technology companies – a customer advisory board.  Rather than focus on a single event to attract executives and spend money on a speaker, a golf excursion or other event – Harris BCD instead invested in a first rate customer advisory board.  There were no lengthy power point presentations – instead it was a dialogue driven approach that kept the customer executives engaged for a day and a half. 

The benefits were mutual.  Harris BCD gained insight in to this targeted growth market and the customers had an open forum to help BCD understand where and how to focus investments to win in EMEA.  The side and most important benefit – Harris BCD and the customers were able to establish executive level relationships together – something that would normally take years to accomplish.

Believe it or not, that’s exactly what you want to hear from your customers!  Otherwise, they wouldn’t still be your customers!

If your company is already doing everything perfectly, growing by leaps and bounds, and shareholders are reaping the benefits, you are living in a dream world!  

In the real world, the one in which we all live today, business leaders want answers. They want to know how to increase revenues, how to retain and grow their customer base, how to deliver value, and how to develop more and better products and services to grow their business. They want assurance that they’re doing the right things at the right times. They want to understand the market better. They want to know what makes their customers “tick” and how they can improve relationships with key decision makers.

This is precisely why my client developed their customer advisory board. They wanted answers and advisory boards are designed to provide business leaders with real answers they can count on. They are designed to tell you like it is…the good, the bad, and the ugly. They are not love fests, but you really don’t want them to be! How else are you going to find out the real truth and get real answers to tough questions?

Advisory boards are made up of your top customers (and perhaps a friendly skeptic or two) who already like what your organization does and respect you enough to be working with you! They realize that your best interests are theirs, and they want you to succeed. When you succeed by providing the products and services they need, they too will be successful! They “get it!”

At a recent advisory board meeting, my client’s customer shared how uncomfortable she felt to criticize her host, but once I explained that her host “wanted and needed to hear what she was saying,” she understood and didn’t feel so badly. Most of us don’t like to criticize people or organizations we like and respect, but that’s exactly what “advisors” are expected to do. Don’t get me wrong. They’re not expected to whine and complain just for the sake of complaining, but it is their duty and responsibility to say the difficult things, to point out the negatives, to offer constructive criticism, and then to offer solutions on how to fix them. It’s about customers identifying problems and finding solutions. After all, you can’t fix a problem you don’t know about and that you don’t fully understand!  

Most of us don’t like to hear criticism either! But when it is intended to help, is voiced in a positive light, is said by someone you know and trust, someone who already thinks highly of you, and someone who is committed to helping you improve, it doesn’t sting quite so much and you realize that it really is very valuable information!

In the real world you can’t run from criticism. It’s how you learn. It’s how you grow. So welcome it from your advisory board members and challenge them to help you improve. You’ll both reap the benefits; then the love fest can begin!

Recently I interviewed one of my clients, Gowri Shankar, Senior Manager, Corporate Marketing of HCL Technologies, about their Customer Advisory Council (CAC). Now in its second year, the HCL CAC has 30 members from their top customer base.

HCL Technologies is a leading global IT services company consisting of over 62,000 professionals of diverse nationalities, who operate from 26 countries.  They focus on ‘transformational outsourcing,’ underlined by innovation and value creation, and offer an integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO.

I have worked closely with Gowri on their CAC program for over a year now and was curious to know, from the perspective of a Program Manager, how he ensures their stakeholders stay involved, and what benefits they have seen since the Council’s inception in 2008.  Following are highlights from our discussion:

Q:  What are the top 2-3 reasons HCL decided to build a Customer Advisory Council program?

A:   “I can share more than 2 or 3! Here are six reasons (and there are probably more) …”

1.       Market Research gave us early warnings of shifts in customer needs and emerging technologies. We want to “stay in front” of those needs and understand what our customers’ expectations are of HCL.

2.       Strategic Guidance to help us validate and craft our strategic initiatives, looking ahead so we can make better decisions, allocate resources more effectively and align to their business and the marketplace.

3.       Innovation is a continuous process at HCL and we look to our CAC to provide feedback on our new IT Services developments.

4.       Customer Loyalty from our CIO CAC members has been phenomenal. I think that is because we include them in the process; we depend on them for input and validation of our strategies. As a result, we see less customer attrition and churn. 

5.       Sales guidance from our Council members – they provide advice on how to approach and appeal to similar customers, and many of them have given us referrals.

6.       Market Intelligence on competitors’ tactics and strategies. They let us know what’s working and what’s not working.  Plus, they share with each other trends they are seeing in the market and discuss leading economic indicators.

Q:  Can you describe the recurring benefits achieved through the HCL CAC and how you as the Program Manager maintain and enhance the initiative?

A:   “First and foremost, we are fortunate to have an Executive Sponsor who is fully engaged, which is a critical component to long-term success. Additionally …”

• The compelling strategic intent of the Council and therefore, the importance to not just maintain it, but continually improve it.
•  The tangible outcomes that have been achieved through the CAC such as increases in referrals, customer loyalty, and revenue, and overall the continuous and unfiltered perspective from market leaders.

Q.  What is one problem you faced gaining internal support and how did you overcome it?

A.   “Our organization is highly decentralized. It was a real challenge to demonstrate tangible evidence and benefits from the various stakeholders. We overcame that with the help of the CAC members. Their enthusiasm for, and confidence in the Council reinforced our internal leadership’s support and involvement.”     

Q.  What are the top 2-3 measurable results your company has gained from the Customer Advisory Council?

A.   “We are very pleased and proud of the results we have achieved. Here are some of the most significant results of our program …”

1.       Reference accounts increased 200%

2.       CAC customer satisfaction increased 25%

3.       30% of our CAC members have agreed to participate in a Case Study

Q.   Do you have any closing remarks?

A.    “We highly value our CAC Program. Through continuous engagement with the Council, HCL has better internal team alignment; as an organization, we are better focused on what we need to work on. We’ve formed valuable strategic relationships and built a mutual trust between our CAC members and HCL; there is a real camaraderie among the group. The time we spend together is invaluable. There is lively dialogue, differing opinions, shared benefit and incredible insight gained for all participants.” 

"...the level of support we got from you – as well as from the whole [Company] team – during our stay has been simply outstanding and may be well considered as a benchmark, in terms of professionalism AND empathy.

I really appreciated it and I know for sure that it was not definitely simple for you and your colleagues to cope with such an extraordinary situation: in my understanding this means that your approach is something different from the usual “customer care”: you took care of the people, not simply of the librarians, and I really appreciated it."

My client has frequent interaction with their customers, values their opinion and takes care of them when times are tough. They see this as "normal." Their customers, and others like me, think it is exceptional. Regardless of whether it is normal or exceptional - ROI studies show this level of customer care pays.

So while we were stuck in Amsterdam for several additional days, I've have to admit it really wasn't so bad...for any of us.

I just returned home from the "Buying and Selling eContent" conference held this week in Phoenix.  I had the opportunity to partner on a presentation regarding Customer Engagement with George Scotti, Director of Channel Marketing for Springer, one of the largest publishers in the areas of Science, Technology and Medical.

What was so much fun about this presentation was that the presentation itself was a classic example of what we were preaching, so to speak.  George had asked us to join him in this event, giving us a tremendous opportunity to engage with our customer on a national platform.  Additionally, three Springer customers also presented with us, validating Springer and speaking on their behalf.  

This event was a great opportunity for all of us to tell the story of how Springer has benefitted from their customer engagement initiatives, including their global advisory boards and summit series.  In addition to aligning to the market, validating their product pipeline, exploring business models and other key strategic objectives, through their advisory boards Springer has created a large base of customer advocates who regularly participate in activities such as this conference presentation.

"I can't overstate the value we receive by engaging our customers outside the board room," George stated.  "Through our advisory boards, we now have trusted industry leaders telling our story for us.  That has a huge impact, particularly as we introduce new product innovations. "

 
I want to thank George for affording us the opportunity to participate in this event, and I look forward to more opportunities to partner with Springer in similar forums.