A Customer Advisory Board (CAB) eliminates this blind spot and creates a productive interface between a business and its customer base. Since the early 1990s RAN ONE and its forerunner, RAS have strongly advocated the Customer Advisory Board as a means of gaining invaluable feedback from the people who matter most – the sources of your income.
The usual structure for a CAB is a ‘focus group’ or panel comprised of a representative sample of customers, chaired by an independent moderator that poses topics for discussion and facilitates the group’s answers. The feedback obtained is transmitted to the company’s management for inclusion in considerations about the future of the business.
The CAB is a tested and proven solution that can eliminate dangerous management blind spots. It can be used to obtain customer perceptions on subjects as diverse as which new products should be considered to the best way to handle customer complaints.
Viewlocity, a US-based firm that markets its products worldwide, describes itself as “the global leading provider of visibility, event management and optimization software for the adaptive supply chain”. Product development at Viewlocity is guided in part by an independent Customer Advisory Board comprised of a select group of customers.
Customer feedback is seen as critical to the Viewlocity product lifecycle and has considerable influence on the direction of Viewlocity and the company’s future business opportunities. Viewlocity management representatives on the CAB include the Chief Executive Officer and Chief Technology Officer.
Allen Systems Group Inc. in the USA adopts a similar ‘listen and learn’ approach. The company uses a CAB as part of its product development structure. The board is seen as a forum that brings together strategic customers and key ASG product strategists. Its members participate in:
• Identifying and sharing best practices in their organization
• Identifying strategic problem/enhancement areas and their business priorities
• Discussing and challenging ideas where value is not clear
• Identifying potential new products required for future business initiatives
All members of the CAB are customers of ASG and serve on the board for a minimum of one year. The benefits of membership for customers include their ability to influence the company’s corporate initiatives and product directions and early access to ASG’s new products.
Stephens and Co in the UK conduct Customer Advisory Boards for other firms. They are scathing about businesses that only guess how their customers might respond to a new product and don’t ask for their advice: “…they bumble along hoping for the best, never really understanding why their customers react the way that they do.”
They point out that a CAB isn’t an expensive exercise and can actually build loyalty and commitment from the customers on it. “You now have a team of dedicated customers dealing with you regularly, keeping an eye on your business, and helping you keep an eye on your competitors.”
SunGard, a company that markets disaster recovery and business continuity products in North America and Europe, sees a CAB as a forum for effective two-way communication between the company and its customers. The board “has real influence on the quality, direction and cost of SunGard services to ensure they continue to meet customers’ needs and expectations.”
Their CAB is made up of senior executives from companies representing a cross section of SunGard’s customer base. It meets quarterly with representatives from SunGard’s senior management team.
CAB members are invited to serve for three years, retiring in rotation, but with the right to serve a further term by mutual agreement. At all times the aim is to maintain a diverse representation.
Another global company, Akamai has a CAB with representatives from an impressive list of companies including Apple, CNET, Coca Cola, Columbia House Company, Hilton Hotels, Lycos, McAfee, Merck & Co., MTV Interactive, Nike, Nordstrom, Ticketmaster Online and Wells Fargo Bank.
Akamai created its Customer Advisory Board in 1999 as a means to better understand the business requirements of its more than 1,200 customers. The CAB meets bi-monthly and communicates throughout the year to discuss strategic updates on products and services.
For professional services firms the ‘C’ in CAB means “client”. The RAN ONE user guide Running Advisory Boards for Clients and Team is a comprehensive resource that contains a wealth of information on how these boards can be convened and facilitated.
The CAB is a win-win situation for everybody and should be a part of the thinking of every business.
Copyright 2004, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com.