As business leaders, there are times to play offense and times to play defense. I would argue that in rare instances, you can do both at the same time. Building and deploying a Customer Advisory Board is the perfect example of having your offense and defense on the field at the same time, giving you the ultimate competitive advantage.
Going on the offense
Companies that successfully build and execute an executive-level Customer Advisory Board have a major competitive advantage over those who would rather just guess what the market wants and needs, and then keep their fingers crossed that they guessed right.
Tony Carter, Ph.D., “found that of the 70 Fortune 500 companies surveyed, 21 had Customer Advisory Boards; and of those companies, 19 found such groups to be an extremely or somewhat effective tool in the customer relationship process. And the fact that many other companies don’t have Customer Advisory Boards is a competitive advantage in itself.”
So what exactly is an executive-level Customer Advisory Board? A CAB, as it is known, is a form of market research unlike any other. A CAB combines the ability for leadership teams to gain insights directly from the decision makers of the companies who purchase their products and services with the opportunity to deepen trusting relationships that lead to increased retention and growth.
Imagine being able to have your key customers on your roster. They are invested in the success of your company because you have given them the chance to play on your team. You have confidentially shared your strategies. You have given them a peak behind the curtain, transparently sharing the good, the bad, and the ugly. You have allowed them to weigh in on your product roadmap. You have provided them a rare and coveted opportunity to influence the direction of one of their key suppliers. And because you have trusted and empowered them, they willingly advocate to prospects on your behalf.
By dedicating the time and resources to actively engage your customers in the strategic direction of your company, you are indeed playing offense. A CAB is a no-brainer, but amazingly enough, it is a rarely utilized strategic initiative, which automatically creates a competitive advantage for those who understand the power of engaging customers in this manner.
One of the best forms of business insurance available today is the Customer Advisory Board. Because of the nature of a CAB, relationships with customers are built and deepened, which helps insulate your company against attrition to the competition while ensuring continued growth.
Statistics show that it costs six times more to acquire a customer than to retain an existing one. Further, it takes time to break even on a customer relationship, and most companies will see 100% of their profits come from their existing customers. As Alex Schultz, VP of Growth at Facebook says, “Retention is the single most important thing for growth.”
Who are those customers, if they were to leave you for the competition, would put a big dent in your revenue? Whether they are raving fans or have issues with your company, these are the people you want to recruit for your Customer Advisory Board. In fact, you want a balance of both satisfied and challenged customers, along with other differentiating factors, to ensure you get a wide and complete perspective from the market you serve. A CAB helps you retain these customers.
By having a long-term and consistent effort in strategically engaging these all-important customers, you protect your company, particularly in times of complete upheaval, as is being experienced during the pandemic. Those who know intimately what’s going on with their customers, and who can tap into that treasure trove of knowledge to gain advice and guidance on how to maneuver the challenges that lie ahead, will undoubtedly have the advantage in the short and long term.
A Customer Advisory Board helps you aggressively play to win while at the same time, protect what you have already gained. When it comes to building your company for sustainable growth, there’s no better way to win than to have your customers playing on your team.
Betsy Westhafer is the CEO of The Congruity Group, a U.S.-based consultancy focused on executive-level Customer Advisory Boards. Betsy is al the co-author of the #1 Best Seller, “ProphetAbility – The Revealing Story of Why Companies Succeed, Fail, or Bounce Back,” available on Amazon. To learn more, visit www.thecongruitygroup.com or call 937-550-1701.