Definition: Many businesses use a customer advisory board, or CAB, to assist them with market and customer research efforts. A customer advisory board is a group of customers who come together on a regular basis to share insights and advice with an organization. Usually, the members of a customer advisory board are high-level executives at their organizations and therefore can provide in-depth market insight.
What is a Customer Advisory Board (CAB)?
A customer advisory board (CAB) is a group of key customers that a company invites to a meeting (and possibly additional periodic meetings) to offer feedback on the product as well as their overall impressions of the company.
Businesses assemble customer advisory boards with several common objectives in mind, including:
- To create champions for their brand
- To validate product ideas and guide the product roadmap
- To help shape their marketing messaging
- To gather market intelligence
Because a customer advisory board should serve as a representative sample of the company’s broader market, this board should include a cross-section of customers representing as many different market segments as possible.
What are the Benefits of a Customer Advisory Board?
Businesses that assemble customer advisory boards find many benefits from the gatherings they host with their CAB members. Some of the most often cited benefits include:
- They can help guide the company’s strategic direction. Creating an open forum in which key customers can speak candidly and at length about why they’ve chosen your company over the competition, what they like about your products, and what they’d like to see next, can help your team get a better sense of where to focus your strategic efforts and resources.
- They can help guide the product roadmap. A customer advisory board can provide insights into how customers are actually using your products, what aspects of those products are most important or beneficial to them, and what other functionality or tools they believe would complement or enhance your offering.
- They can increase customer loyalty. One key benefit of having a customer advisory board is that the advisory members will likely spend more with your company as a result of participating in your CAB. According to research by Ignite Advisory Group, B2B businesses with customer advisory boards experience an average of 9% more in new business from CAB members than from their broader customer base.
Other benefits of a customer advisory board include:
- Understanding the buying triggers of the company’s market
- Providing beta users for the company’s new products
- Helping the company identify new markets
How Can a Product Team Effectively Leverage a Customer Advisory Board?
Assembling and running a customer advisory board requires strategic thought and planning. Here are a few best practices your product team can use to get started.
1. Set specific goals for your CAB(s)
A customer advisory board should consist of a carefully selected group of customer representatives, gathered with your team to discuss specific topics. With that in mind, you need to both think through which customers you’ll want for these discussions and what your customer advisory board agenda will be.
In fact, as you go through the strategic planning stage, you might discover you have several objectives for your CAB. If so, you might be better off assembling several advisory groups, each representing a specific market segment (large customers, small customers) and/or to discuss specific topics (product direction, company positioning, the competitive landscape, etc.).
2. Seek out your ideal advisory board members.
Some representatives of your customer companies will be thrilled you’ve asked them to join your advisory board and will do so eagerly. But for many, committing to participate on a CAB is a difficult decision because it requires time and effort.
So you will want to create a list of ideal candidates for your advisory board, probably a list far greater than the number of actual participants you will want for your CAB. Then you’ll need to contact those people with your invitation. As CIO Magazine has written, there are several benefits to joining a customer advisory board. It’s a good idea to include some of these in your invitation, so your potential CAB members will know what’s in it for them. Some of those benefits include:
- You’ll have a chance to influence the vendor’s roadmap
- During CAB meetings, you can learn best practices from your peers
- You could get an opportunity to beta-test new features and new products
- CAB meetings are a great opportunity to network and to increase your profile as a thought leader in your industry
3. Prepare a detailed agenda.
A customer advisory board forum is a great opportunity to let your advisory members speak freely about their experiences with your product and your company. But that does not mean you want a completely unguided and directionless meeting.
If you are going to the trouble of assembling a group of key customers, you need to plan for that time so you can derive the most strategic value from it. That means preparing a customer advisory board agenda that will keep you on track. For example, your agenda might look like this:
- Introducing your team to your advisory board members
- Asking your advisory board members for an overview of their own companies’ strategic goals and plans
- Discussing the challenges your CAB members face in performing their work — challenges related to the solutions you offer
- Discussing how your advisory members view the competitive landscape for your offerings
- Sharing your product roadmap, backlog, or other elements of your team’s planned development work
- Opening the discussion up to your advisory members’ thoughts about your products, what they’d like to see prioritized, any issues they have with your solutions, etc.
Why are Customer advisory boards useful programs for product teams?
A customer advisory board is a great way to spend quality time with real customers, to deepen your relationship and turn them into loyal fans, and to help validate your ideas and shape your strategic roadmap.