Running a Customer Advisory Board

What is a customer advisory board (CAB)?

A strategy-level focus group – a CAB consists of a company’s CEO, his or her executive staff, and a dozen of their best customers.

The focus is on the future of the customers’ business – a customer advisory board brings together this group to discuss trends, drivers, any evolving priorities affecting the market and how the customers’ businesses are changing. The emphasis is on the next 18 – 36 months, not the past. The intended outcome is to discover what the host company can do to help customers achieve their goals.

Properly run CAB programs are a strategic asset – CABs are cross-functional initiatives, not marketing “events”. For best results, CAB programs and agendas map directly to the host company’s annual planning process. CABs are used to validate or challenge the host company’s current priorities, value proposition, and future investment plans.

CABs are commonly confused with focus groups – focus groups are more product-related while CABs are more about high-level strategy. A summary of the differences between CABs, focus groups, and customer conferences can be found in the table below:

What are CABs good for (and not good for)?

Use the right tool for the right job – CABs are often confused with a variety of other tools: product focus groups, user groups, and customer appreciation events. CABs are a component of a larger Voice-of-the-Customer program. It’s important to know where it fits.

CAB programs are designed and executed for strategy reasons – The focus of every CAB program and every meeting is on the customer, not the host vendor. A properly run CAB meeting invites customers to share where their business is going and how their needs are shifting. The focus is never about driving more leads this quarter. It’s about uncovering how the host company can stay relevant three years from now.

The CAB is not a lead gen tool – When companies try to use their CAB to boost immediate sales, they fail. Always. No one wants to be sold to. When a company implies they want to learn about their customers but then pivots into sales mode, customers will stop talking. And they won’t return, or they will delegate participation to a lower-level employee with less strategic insight. When a company tries to use its CAB as a sales tool, they lose out on the true strategic benefits.

CABs are designed to help you listen to your customers – You are under no obligation to agree to anything a customer may say or ask you to do. Your only requirement is to listen and to understand. CABs are tools for strengthening the executive-level relationships with your best customers. Customers are smart enough to know that the CAB is only one tool in your Voice-of-the-Customer landscape. They know you have competing interests. What they really want to know is that you have heard them. And, no matter what you decide to do with the guidance they provide you, they do expect you to close the loop and share your decisions. Knowing that their vendors are asking them for advice and guidance, and that they are listening, does indeed improve customer satisfaction.

CABs are imperative now because of our changing world and tougher economic times – CABs are great when times are good, but they can be incredibly powerful when times are bad because they build trust:

Showing empathy fosters trust – CABs create opportunities for executive teams to show empathy and give attention to how the customer’s business is changing. That builds deeper trust between the two parties.
Purchase decisions are based on emotion, not analytics – at the end of the day, it’s always a human emotional decision about whether to buy or not. So using a CAB to help establish deeper trust between the company and its customers can ultimately lead to better business. In fact, it is not unusual to discover new revenue streams as a result of these conversations.

How are customer and partner advisory boards similar and different?

Similarity: Both CABs and PABs provide visibility into customers – With partner advisory boards, you’re looking to learn from your partners’ customers. Common PAB agenda topics include: How have the conversations partners are having with customers been changing? What trends are partners seeing in the market? What are customers asking from your partners that they weren’t asking for before?

Difference: PABs reinforce relationships and set expectations with your channel partners – Whereas a CAB will include 12 strategic customers, a PAB program will include only a dozen of your most strategic Tier 1 channel partners. In addition to sharing market intelligence, PABs programs include discussions about expectations for achieving joint business success. During PAB meetings, you’ll share knowledge about the market, explore business requirements, agree upon metrics, and clarify expectations for what you will do to support your partners and what they will do for you.

Both CABs and PABs are forward-looking and “serious” meetings – they are made up of different people and serve different purposes, but both types of advisory boards take on high-level strategic conversations. You should prepare for both CAB and PAB meetings with the same level of integrity you bring to preparing for a board meeting.

How established does a company need to be to get value from a CAB?

You need enough customers and enough history:

CABs are tools for B2B companies, not B2C companies
50+ real, paying customers (no “friends and family” customers)
A few years of market presence and an established performance history
Annual revenue may vary, but if you have less than $25M in revenue you should consider whether you’re truly ready for a CAB

Your executive team needs to be ready – in addition to having meaningful repeat business and some established customers, your executive team also needs to be prepared for the forward-thinking nature of a CAB. If your executive team is still very reactive to the present moment and doesn’t yet have the time to think proactively about future strategy, your company may not be ready for a CAB.

It makes more sense for enterprise – It is easy to make a business investment in a CAB program when companies are selling complex products and services to enterprise markets. For companies selling to small or mid-sized companies, the customer feedback you receive may be too fragmented to be of any meaningful help. There are other tools better suited to capture customer sentiment and directional guidance within the SMB market. Again, use the right tool for the right job.

You need to have a proper budget to support a CAB program – to run a properly structured advisory board program—which consists of much more than a single meeting—you will likely need a budget of $50K – $100K or more. As a result of the pandemic, many companies have opted to host a series of two or three 90-minute virtual CAB meetings. The cost for working with a CAB strategist to help you plan these and facilitate the meetings typically starts around $50K. For planning an in-person CAB meeting, the costs may be around $100K. This includes costs for a CAB strategist/facilitator and “wheels down to wheels up” expenses the host company pays (i.e. ground transportation for all participants, food, lodging, any other activities – CAB members pay their own airfare). Some companies are building hybrid programs today that include at least one all-virtual meeting and one in-person meeting.

Who should you invite to join your CAB (which types of companies, which person from the company, how many)?

Before you invite anyone, ask two strategic questions:

What do you want to learn?
What are you prepared to do with the information that you collect?

Your invitation list must be in response to your objective. There is nothing worse than investing in a CAB program only to hear your CEO lament, “Well, that was interesting, but we didn’t learn anything we didn’t already know.” When that happens, you’ve wasted everyone’s time.

Pick customer executives who have the right responsibility – Remember that CABs are all about looking to the future. So regardless of specific titles, you want to choose people who are tasked with thinking about the future of their companies. This tends to be VPs or C-level staff, but not exclusively—anyone who directly manages a line of business or technology may be appropriate. However, remember that CABs are not product focus groups. Individual contributors and first-line managers are not invited because they don’t carry the right level of responsibility.

CABs are designed for intimate conversations with an exclusive set of customers. Small groups are much more comfortable to share what they are really thinking. And being part of an exclusive community of peers is a major draw. They want to feel special. Follow these best practices:

Invite no more than 10 customers to attend any virtual CAB meeting.
Invite no more than 12 customers to attend any in-person CAB meeting.
As a starting point: for every two customers, you may include one person from your executive team. Maintaining a 2:1 ratio of customers/vendor is comfortable. But, at no point should you outnumber the customers. When customers feel surrounded, they self-edit their remarks.
As a general rule, sales executives and product managers are not invited to attend these meetings. Again, the magic happens when the group is small, intimate, and exclusive.

Who are the people involved in setting up and running a CAB?

CAB Executive Sponsor – a member of the executive team who is the lead internal champion for the CAB. This person rallies the rest of the executive team around the CAB, welcomes everyone to the first meeting, and concludes the meeting. The CAB executive sponsor is generally not the CEO.

CAB Operations Manager – This person is the CAB program manager and ensures timelines are met. This person also handles CAB logistics, including anything from running CAB pre-planning meetings, to arranging travel, to putting together the rest of the internal team that owns agenda “discussion modules”. The CAB Operations Manager may be an event coordinator, a marketing manager, a program manager.

CEO – Since CABs are about establishing or strengthening executive-level relationships, it is critically important the CEO be visible in the CAB planning efforts and the invitation process. The CEO should directly invite customers to attend. This shows the strategic intent and high value of the CAB. The CEO will also participate in the CAB kickoff meeting and will help direct the team on the main strategy question: What do we want to learn? Most CEOs will not be involved in the weekly planning, although some like to participate closely.

CAB Facilitator – An unbiased facilitator is critical for the success of your CAB. When an executive attempts to facilitate their own CAB, their bias will show. It is unavoidable because that person wears a company badge. Also, it can be difficult to hear customer feedback/input that makes you feel uncomfortable. It’s human nature to become defensive. When this happens, tension arises. Customers will withdraw. Facilitators are not the host; they are not subject matter experts. The role of the facilitator is to ensure the agenda stays on track, customers have opportunity to answer your carefully constructed questions, and that your executive team doesn’t talk to themselves or go off track.

Discussion Module Owners – CAB agendas follow the 80/20 rule, meaning that 80% of the time we want customers talking. This means 80% of the time your executives are listening. Agendas are therefore composed of “discussion modules”, not presentations. No one wants to be lectured. Discussion module owners are tasked to determine the topic they want to discuss and what minimal slides (3 is a good number) they need to present to the group to set up that conversation. Discussion module owners might be anyone on the executive team.

Note: Sales is generally not invited – having members of the sales team in the room often changes the nature of the CAB conversation, so those internal team members are usually not invited.

When and where should you host your CAB meetings? How long should the meeting be?

CAB meetings are typically held in the spring and fall – While they can happen at any time of year, CABs are often held in April/May or September/October. When hosting virtual CAB meetings, the timing is more flexible.

Do not hold in-person meetings at your company headquarters – If you hold your CAB meeting at your newly renovated office, you have the home court advantage. This impacts behavior, consciously or unconsciously. You must avoid an environment that encourages customers to tell you what you want to hear versus what you need to hear. Instead, host your in-person CAB meeting at a 5-star hotel in a city that is easy for people to fly into. People are typically more forthright with opinions when they are in a neutral space.

What’s a CAB agenda look like? – In-person CAB meetings start with a networking reception & dinner the evening before. The CAB meeting follows the next day and runs about six hours, typically 8 – 3pm, not including breaks and lunch. Why not run longer? Because, people get tired in the afternoon and the conversation falls off. Also, it is not surprising when at least one CAB member starts looking at their watch at 2:30 to say they have to leave early. Once one person does this, everyone starts thinking the same thing. You’ve lost the group. Keep the agenda tight and focused. End early so they have time to get back to the airport. The feedback you want to hear is, “Wow, this was a great meeting! I wish we had more time.”

Follow-up on the meeting to take full advantage – Ideally, the initial CAB meeting will yield conversations that can be followed up on with smaller groups (CAB pod meetings). These smaller conversations, in between larger CAB meetings, are great for maintaining relationships. Additionally, feedback from CAB pod meetings can help create outreach opportunities for your sales team—strategic conversations can become specific action items.

How do virtual CAB programs work?

Managing the agenda: CAB programs evolved due to the pandemic, shifting from in-person meetings to a series of virtual meetings. “Zoom overload” has become a problem. To address this, virtual CAB meetings are no longer than 90 minutes. Each virtual meeting will have one specific topic for discussion. Essentially, we’ve taken the 6 hour in-person agenda and broken it down into a series of shorter virtual CAB discussions.

Is there value in virtual CAB meetings? Yes! However, the value is experienced differently than in-person meetings. Some executives will quickly point out that if we can’t be physically together to share a meal, there is limited value. However, the true value out of any CAB program (in person or virtual) is in the conversation. Success has always been about substance (e.g. the agenda) not the style (e.g. expensive dinners or going to a ball game). A series of virtual CAB meetings invites customers to have multiple conversations with your executive team instead of just one. And the value of these conversations grows over time. With COVID-19, inflation worries, companies thinking about their carbon footprint, and travel worries because of labor shortages, we need an alternative to in-person meetings. When properly planned and clear expectations set, these meetings will continue to deliver the business outcome companies need to maintain customer relationships. Virtual meetings are here to stay. Learn how to make them work for you.

People’s preferences for virtual vs. in-person are still shifting – Not sure which approach to take? Ask your CAB members. The landscape of whether people prefer virtual or in-person meetings is constantly evolving. It’s best to check in with your internal team and CAB members a couple of times during planning to best understand the current preferences.

How far in advance do you need to start planning?

Start planning at least 3 (sometimes 6) months ahead of time – You need the time to carefully think about your agenda, what you want to learn, and what you will be prepared to do with the information you collect. Your customers also need advance notice to work the CAB meeting into their schedules.

Give yourself time to change your mind – Big strategy questions require time to reflect. Your executive team needs enough time and space to consider many potential “what do we want to learn?” questions and then hone in on the right ones for your CAB.

What should your goal be for any CAB meeting? What’s a “big question”?

We want to strengthen relationships and drive sales – While this is a legitimate goal for any exec team, it’s self-serving and a turn off to customers. Instead, you need to communicate a goal that is relevant to your customers. What do you need to do to help your customers achieve their business goals? You must finesse your CAB goals to be about your customers, not you. To do that, you might consider your “big questions.”

Examples of “big questions” used by some companies include –

Relevance: For us (the CAB host company) to continue to be a leader in our industry AND to be relevant 3 years from now, what do you (CAB customers) think we need to do?
Trends & drivers: What trends and drivers are important to your (the CAB customers’) businesses today? Do you see these changing in the next 3-5 years? If so, why?
Brand image: As we expand our business into new markets (x and y), how does our brand image need to change (if at all)? What elements, messages, and proof points work, and which ones don’t?
Technology: What technology-inspired benefits and capabilities do you suggest we prioritize in order to deliver more value to you? What investments should we make? What partnerships should we pursue?
Operations: How can we improve our ability to collaborate with you? How effective is our working/account management/sales relationship(s) with you? What’s working? What’s not?
Competition: (If the competitive landscape is changing, ask) 3-5 years from now, who do you think poses the biggest competitive threat to us? Why?
Customer satisfaction: If we could do one thing to dramatically help you improve/accelerate/extend the value you (the customer) provide to your customers, what would you like us to do?

What do “discussion modules” look like?

Each CAB discussion module should be 75-minutes long and run by a member of your team – As with the larger CAB planning, you should ask yourself what you want to learn from each discussion module, then plan your agenda accordingly. Your agenda should be able to fit on three (and only three) slides and should follow this format:

5-6 minutes of introduction and context
60 minutes of facilitated conversation
10 minutes of takeaways conversation and closing

Structured prioritization or voting can occasionally have a place in CABs – During the course of the CAB discussion modules, many insights and potential action items will come up. It’s often worth narrowing this list down to the most important things before you adjourn the meeting. Two approaches work very well:

Ask customers to vote – Your facilitator will capture insights, suggestions, and possible action items on flipcharts around the room. Have your facilitator ask them to vote on the most important. Whittle the list down to the top 10. Then share how the host company will follow-up.
Create opportunities for customers to voice their top priorities – During lunch, ask CAB members this question: If there was one thing the host company could do to accelerate your business over the next year, what would it be? At the end of the session, give every person a chance to answer that question. This is not a promise or expectation that the host company will do anything. However, this is an important opportunity to allow customers to share any burning issues. It also provides an open invitation for the host company to circle with each and every CAB member after the meeting to continue the discussion in private. This is often an invitation to explore any cross-sell or up-sell opportunities.

Listen 80% of the time – let your customers do 80% of the talking. You’ll learn more and they will feel like they have been heard..

Don’t waste time on fanciful outings – One company thought it would be nice to host CAB members at their innovation lab. They set up several stations. While interesting, this outing had nothing to do with the agenda. Most disappointingly, after the field trip, there was no time to debrief and connect the dots between what they saw and why it mattered to the agenda. THe team wasted 90 minutes with no benefit. Be selfish: focus on what you want to learn. This is a wonderful opportunity for market research with an exclusive set of customers. Don’t waste it.

How should you engage your CAB members in between meetings?

Before your first meeting, your facilitator should interview CAB members 1:1 – The interview questions should be directly related to the suggested CAB agenda. Think of the interviews as prelude questions that will be used to facilitate deeper conversations during the actual CAB meeting.

After or between meetings, host CAB pod meetings with subsets of customers – These pod meetings are great for engaging a smaller group in diving into specific topics that came up during the CAB. They are also used to strengthen and deepen the relationships formed during the CAB.

During the end-of-year review process, tie in CAB feedback – The end-of-the-year review process can be a great time to engage CAB members.

Account managers should reference CAB feedback during year-end meetings with customers – make it personal and show customers that you listened and learned from them.
Host a fun event to thank CAB members for their participation – maybe an in-person reception or a virtual wine tasting event. Let people know you value that relationship.

Ultimately, what do you get out of your CAB?

You’re getting strategic guidance on how the market is changing – a lot of companies and executives don’t take the time to truly sit with their customers to discuss what’s going on in their world. CABs allow for deep, strategic conversations about what customers are experiencing in the market.

It makes your executives smarter and more humble – whoever understands the customer best wins. Knowing what your customers truly want and need is vital to success.

Your CAB members can be great references – ideally, your CAB members should feel a connection with your company, which can make them great references. But, discussions about references should happen in private rather than at the CAB meeting itself.

What are the most important pieces to get right?

Integrate your CAB into your business strategy – the CAB does not live in isolation—it must align with your annual planning process. Every strategic planning question has a CAB corollary question. When CABs are siloed, they always fail. When they’re part of a strategic, cross-functional initiative, they succeed.

A CAB is not a single meeting or event. Commit to a proper CAB program – You need to be in it for the long haul. Having an advisory board means you are asking people for advice, and you need to be committed to that advice-giving conversation over the course of the year and into the future.

Be willing to follow up and do something with the information you collect – people want to feel like their time and insights are valuable, so you need to be ready to listen and consider the information that comes from a CAB. You’re under no obligation to do something a customer asks you to do, but be ready to discuss their ideas and what you ended up doing with them. That helps people feel heard even if you went in a different direction.

What are the common pitfalls?

Planning too late – to have a truly strategic, valuable CAB conversation, you must take the time to plan ahead. Otherwise, you have wasted everyone’s time.

Being sloppy about follow-up – not every member of your executive and leadership teams will be included in the CAB meeting, but it’s vital that you take down insights and share them broadly with other team members in your org. Excellent notes should be taken and an output report should always be generated and shared broadly.

For more information on CABs, visit Mike Gospe’s CAB Resource Center – a website dedicated to sharing CAB best practices articles, videos, and tools. (www.cabstrategy.com)