What is a customer advisory board: CX Mini Masterclass – E72

Welcome to Decoding the Customer, a podcast about customer experience and how to realize customer-centric change in today’s dynamic business world. I’m Julia Ahlfeldt, certified customer experience professional, business advisor, and host of this program. Thanks so much for tuning in. If you’re new to the show, welcome.

If you’re a returning listener, thanks, and it’s great to have you back. This episode is part of my CX Mini Masterclass series here on Decoding the Customer. These weekly episodes are published each Thursday and designed to be punchy, bite-size overviews of key customer experience concepts and ideas for how you can help your organization thrive through customer centricity. Whether you’re new to the field of customer experience, are preparing for the CCXP exam, or are a seasoned professional looking to brush up on a few basics, this series will help you improve your knowledge, skills, and performance to stand out as a CX professional.

This is episode 72, the third episode of February. Today, I’m going to dive into the topic of Customer Advisory Boards, or Customer Advisory Councils, as they’re also called. A Customer Advisory Board is a voice of customer methodology that can yield incredibly rich insights and strengthen relationships with influential customers. These councils are more prevalent in the B2B space, but I think there’s a case to be made for these councils in the B2C space as well.

As with all things, there isn’t a one-size-fits-all solution, so I’m going to take you through an overview of the concept, when and where they’re appropriate, and some practical tips if you’re considering starting one for your organization. If you’re looking for a quick yet comprehensive overview of customer advisory councils and some practical ideas that you can take back to the office, then this episode is for you. As always, if you’re out and about while listening to this and hear something that you’d like to remember later, don’t worry about writing it down. You can find an overview of the key concepts that we’ve covered today in the show notes for this episode, which are on my website, juliaahlfeldt.com or decodingthecustomer.com.

I was recently presenting a case study on an organization that had implemented an innovative approach for identifying customers that were at a high risk for churn and then intervening with a customized wow moment to disrupt the cycle of churn. There were two key components to their success. One was identifying the customers who were at the highest risk for churn. To do this, they used some machine learning backed predictive analytics, which was pretty cool.

The other component was the wow moment. And to define this, the organization turned to its customer advisory council. It was yet another example of how customer advisory councils, also known as customer advisory boards, and I’ll use those two terms interchangeably throughout this, can be a powerful asset for organizations that are looking to differentiate through customer experience. Not everyone out there has had exposure to a customer advisory board, so I thought it would be an apt topic for a mini masterclass.

Let’s start by defining what a customer advisory council or board is. The council or board is organized by a product or service provider, and the council itself usually consists of a group of customers who meet together with service providers on regular intervals to discuss their experiences, provide feedback, even participate in innovation and troubleshooting. I’ve also heard of customer advisory boards that include representation from the customer facing teams within the service provider, though that’s not always the case and probably not the norm. A customer advisory council is not to be confused with a customer council or a customer experience council, which is something else entirely.

A customer experience council is usually an internal governance body or a cross-functional steerco that meets to discuss customer experience management, journey improvement, etc. Even though the names are similar, the concepts are totally different. To keep the two straight, you can remember that a customer advisory board advises the business based on the external customer perspective. What makes a customer advisory board different from other Voice of Customer channels like, say, a survey?

Most traditional Voice of Customer efforts, like surveys or interviews, rely on once-off interactions with customers to garner their feedback. A customer advisory council or advisory board is an ongoing thing, and that’s what makes it special. With the benefit of time and follow-up, you can have deeper conversations with your customers. Customers who participate may also gain a deeper understanding for the business and therefore be a collaborative partner in things like troubleshooting and innovation.

Customers who invest their time and energy in participating are also likely to develop a vested interest in the success of the service provider’s business and may gradually become vocal promoters of the service provider’s products and services. It’s for these reasons that some companies specifically select industry influencers to be part of their customer advisory bodies. Customer advisory councils can be useful for nearly any type of product or service provider, whether that’s B2B or B2C. Personally, I’ve seen this voice of customer approach gain the most momentum in the B2B space, where the customer journeys are often complex and the customer needs are ongoing.

And the product in question may be an integral part of the customer’s business operations. Now that’s not to say that you can’t apply this concept in the B2C space as well. Kraft Foods, for example, has very successfully engaged with a group of its consumer super users of its Velveeta cheese product. The outputs of this collaboration have led to innovations that might just have saved the fate of this key ingredient for Super Bowl Sunday cheese dip.

If you’re interested in learning more about that, I’ll post a link to an article about this in the show notes for this episode. What makes a customer advisory council successful? There are a couple of key ingredients. The first is a clear purpose.

Do you want the advisory board to provide insights that will be useful for business strategy, product development, service improvement, marketing, account management, or something else? Customers need to know the objectives of the council, and the engagements need to work towards these. The purpose of the council will also inform who should participate. Which brings me to my next point, picking the right customers to participate.

I mentioned the influencer factor earlier, but customers should be representative of the target market. If the context is B2B, the service provider would be wise to carefully select participating organizations that aren’t direct competitors of each other. Remember, you want to establish open and honest communication around needs and usage, and that won’t happen if participants feel like they need to have their guard up. Keep in mind that B2B customers are actually a village of stakeholders.

So you’ll want to think about who you should invite to participate. Do you want your customer CEO, the primary contact for account management, or the end user within the business? All of these stakeholders will bring different perspectives to the party. I’ve read some research on this topic, which suggests inviting participants from similar levels so that you can have peer-to-peer idea sharing.

And as with all parties, we also need to think about how many people to invite. I don’t have a hard and fast answer for this one. It seems to vary quite a lot. Everything from a small, intimate group of half a dozen customers to 25 or 30 total.

My suggestion would be to think about the optimal group size for your situation that will yield a balance of diverse perspectives and a manageable group conversation. Participation in a customer advisory council isn’t a small ask. So think about how you can appropriately encourage participation without skewing the feedback. Incentives can be effective, but do tread carefully.

The third ingredient is a consistent structure. Don’t walk into this without an agenda and expect to come out with insights because you won’t. Make sure that you’re clear with your objectives, timeline, and approach. Where the stakes are high, it’s not unheard of for organizations to bring in a professional facilitator.

Make sure that you set up a regular cadence to the council meetings so that you can keep customers engaged and the flow of information going, whether it’s annually, semi-annually, quarterly, or something else. Doing this enables you to follow up on issues or questions raised and to circle back with participating customers to let them know that their feedback is being implemented. As customer experience professionals, we all understand the importance of closing the feedback loop. I think that customer advisory councils are a fascinating concept.

Given the rich insights that can be derived through this type of engagement with customers, I’m surprised that they aren’t more prevalent. Do you use a customer advisory council in your organization? If so, I’d love to hear about it. If you’re looking for help evolving your organization’s customer experience through a customer advisory council or other Voice of Customer efforts, please get in touch.

I’d be happy to explore how I can help. You can reach me via email, tweet, or LinkedIn message. My handle is at Julia Ahlfeldt, and my full contact details are also listed on my website, juliaahlfeldt.com or decodingthecustomer.com. I hope that you’re enjoying the show.

Please share with others who might be interested or head on over to iTunes and rate the podcast. This helps others discover the show. All right. I’ll be back next week with another episode.

See you then.