Determining how to retain your best customers and also grow your business are 2 key challenges faced by virtually every business owner. A highly effective way of determining our companies’ retention and growth strategies is by establishing a Customer Advisory Panel (CAP)
What is a Customer Advisory Panel?
A customer advisory panel, also known as a Client Advisory Council, is a B2B initiative whereby your company meets periodically with a small group of customers that have a vested interest in shaping your company’s strategy.
While CAPs have been used for quite some time by larger organizations in sectors such as telecommunications, they can be used by virtually any B2B sector and by start-ups and SMEs given its relatively low cost to implement.
Why Create a Customer Advisory Panel?
In B2B, typically the top 20% of a company’s clients can account for 80% (or more) of the company’s revenue. Therefore, it is critical to build deep relationships with your best customers.
What are the Benefits of Customer Advisory Panels?
For Start-Ups and SMEs
CAPs can provide multiple benefits to your company in its strategic pursuits including:
- Increased incremental revenues from participating companies
- Increased customer loyalty and advocacy
- Input and feedback on new offerings, service models or innovation initiatives
- Early warnings of shifts in customer needs and emerging opportunities
- Advice on approaching and appealing to similar prospects and target customers
For Your Clients and Customers
Your clients and customers will need to see the value from their participation. The benefits include:• Learning about industry trends
- Learning about best practices from peers
- Peer networking opportunities
- Deepening relationship and understanding with suppliers resulting in better service
Key Characteristics of Customer Advisory Panels
- Decision makers and influencers from selected customers (including of some of your largest and best customers)
o Note: Remember in a B2B context, you need to understand the business challenges from a Decision Maker point of view, not simply a user one
Number of Customers
- 10 to 15 customers that represent a cross-section of your customer base
- CAP meetings are held usually 2-3 times per year
A balanced agenda whereby both customers and the host company contribute to the discussion is critical to the success of a CAP.
CAP sessions are best conducted face to face. The aim of these sessions is to gain open, honest feedback, guidance and advice.
They are NOT:
- Focus groups
- Product demonstrations
- Sales presentations
- Customer complaint sessions
Customer participant input
- Industry direction and trends (eg state of the industry, anticipated changes and impact
- Customers’ business challenges (eg. their priorities, objectives, needs)
- Customers’ functional challenges (eg. priorities, needs and challenges-from both a functional and decision maker perspective
Host Company Input
The information that the host company may want to share include:
- Upcoming priorities, focus and direction
- Key initiatives
- Company competencies
- Proposed business and service models
TIPS FOR CUSTOMER ADVISORY PANEL SUCCESS
Have clear objectives on what you want to achieve from both the CAP and the sessions
Have an Executive Sponsor
- This person will be responsible for ensuring the overall success of the CAP
- This person should also have the authority and empowerment to obtain and use available resources and budgets to execute on agreed CAP recommendations
Select customer participants wisely
- Participants should represent your broader customer base with a mix of industry verticals, geographies and tenure
Ensure sessions are member driven
- Engage your key internal stakeholders to obtain a list of possible topics
- Discuss these potential topics and gain feedback from participating customers
Involve your company’s internal subject matter experts
- Engage leads from departments from across your company such as Sales, Product Development, IT, Customer Service and Support
- Also considering including other team members that have expertise in a specific target industry or on issues or topics that are of key interest to your panel members
- They should be responsible for:
o Preparing any content required for upcoming CAP meetings
o Driving the execution of recommendations made during the meetings
Follow the 80/20 rule for talking
- Members (customers) talk 80% of the time, Host company talks only 20% of the time
Capture feedback and turn into action
- Document all feedback given during the session. Ensure they are turned into action items that are executed and managed
Follow up with members
- Communicate with participants and let them know the actions to be taken as a result of the session
TAKE ACTION NOW
Determine if your company is ready to set up a Customer Advisory Panel by meeting with your management team and founders and asking yourselves the following:
• What business challenges would we want to address?
• What outcomes might we seek from a CAP program?
• Are we willing to commit resources, attend meetings and also take action?
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