As a Product Development or Product Management professional, are you confident the products, solutions or services you have planned (or even already under development) will be accepted – i.e. purchased – by your market? If so, how did you obtain this level of confidence? Hopefully, formally engaging with – and soliciting feedback from – your existing customers to vet your product roadmap is the answer to this question. If not, read on.
Customer advisory boards (CABs) continue to emerge one of the best ways gather customer insight and feedback to your current and planned offerings. But such benefits are just the beginning.
For the uninitiated, customer advisory boards (also known as a customer advisory councils) are forums to review industry trends, address mutual challenges or opportunities, and offer unvarnished insights and guidance. For vendors, these councils are ideal for validating corporate strategies, gathering input on product development, and deepening relationships with key customers. In turn, there is just as much to be gained by the participating customers. (CIO Insight recently summarized these here)
A customer advisory board is perhaps most often associated with providing feedback and desired direction on the host company’s offerings. Your advisory council can offer an insider’s view of what your target buyer needs and wants from your products and/or services. Such customers may inevitably be the purchaser of your new product versions, or even be the first to try your new products. This is especially true if they’ve had some influence on their development. In fact, an advisory council also serves as a great platform for securing beta testers of your new offerings, helping you introduce your solutions and providing immediate validation – before you go to market.
A recent survey of CAB practitioners shows that product direction is the top benefit host companies derive from customer advisory boards. These top business areas include:
Product and solutions direction (77%)
Strategic company direction (63%)
Market insight and intelligence (50%)
Branding and positioning feedback (50%)
In addition, for the first time, data is starting to quantify CAB benefits. According to recently released data,
B2B (business-to-business) companies that have active and successful customer advisory boards enjoy a 9% increase in new business among CAB members starting in year two of CAB programs above non-CAB customers.
Such companies benefit from a retention rate of 95% amongst program participants.
Customers that participate in CABs are more likely to recommend their host companies. In fact, CAB member participation in reference programs, testimonials and thought leadership efforts is 57% higher than non-CAB members.
The revenue and retention figures can translate into significant incremental amounts for host companies, at times and business conditions when such revenue growth can be difficult to come by. Such amounts can easily self-fund a customer advisory program.
Additional research points to the ROI of such executive customer engagements. According to a recent Gallup poll, “A typical B2B company has an optimal relationship with fewer than one in seven of its customers… and only 13% of B2B customers are fully engaged.” However, such “fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth.”
Thus, data is now showing that engaging with customers though a customer advisory board is an outstanding method to gather input to your product roadmap and overall business strategies. Indeed, a well-run customer advisory council can undoubtedly provide your organization with material guidance that will put your company on a better, more targeted and profitable track for years to come.