When it comes to engaging with their customers, companies have many options to choose from, including surveys, net promoter scoring, conferences, user group meetings and social media groups. But I think the vehicle that delivers the most value for the time and resources invested is a customer advisory council.

What Is a Customer Advisory Council?

A customer advisory council (CAC; also known as a customer advisory board or client advisory panel) is a group of representatives of about a dozen of your best customers who come together to offer honest guidance to your company, address mutual challenges and analyze industry trends. 

For the host companies, such councils are ideal for validating corporate strategies, gathering input on product road maps and expanding relationships with key accounts. But the participating customers have just as much to gain. Among other things, they can influence the vendor’s product plans, learn about best practices from peers, interact with executive management and help address shared business obstacles.

Data quantifying the benefits of CAC initiatives is now available. A recent study by my employer, Ignite Advisory Group, found the following:

  • B2B companies that host active customer advisory councils see a 9 percent increase in new business among CAC members compared with non-CAC customers; this increase typically begins in the second year of a customer’s CAC membership.
  • Host companies benefit from a retention rate of 95 percent among CAC program participants.
  • Customers that participate in CACs are more likely to recommend their host companies. In fact, the rate of participation in reference programs, testimonials and thought leadership efforts is 57 percent higher among CAC members than it is among non-CAC members.

While the benefits of CAC programs are evident, establishing and managing a robust CAC program requires adequate planning, resources and training. Indeed, poorly run CACs may cause more harm than good.

How to Derail a Customer Advisory Board

We have seen firsthand what can go wrong when CAC programs are not managed well. Here are some examples:

  • One executive went off plan and presented his company’s standard investor relations presentation, until attendees asked him to stop and engage with them on guidance he was looking for from the gathering.
  • Another C-level executive took his introductory comments as an opportunity to talk ad-nauseam about his yoga class, and his direct reports were powerless to stop him.
  • One company held a CAC social event at a gun range, where there was a selection of high-powered weapons laid out on a table for members to shoot at will — with no instruction provided or safety precautions taken. On top of that, there was a full, open bar nearby. (Fortunately, there were no injuries.)

Those examples illustrate how CAC meetings can get off track. But it doesn’t have to be that way. Here are five tips for creating a strong CAC program.

5 Steps to a Strong CAC Program

Allow Enough Planning Time

Establishing a solid CAC program and preparing for the first face-to-face meeting is a multistep process. You need to draft a CAC charter, define membership criteria and recruitment policies, develop the agenda, prepare meeting materials, deal with logistical issues and much more.

Learning Opportunities

You will need at least six months to complete those steps properly. Accelerating the process will create a rushed feeling — for internal staffers and your customer members alike.

Follow a Content Creation Process

When you create content for CAC meetings, follow a process in which you first ask internal subject matter experts to put together a discussion guide of potential “top of mind” topics. Then interview CAB members individually to review those topics. After that, compile an executive summary of those interviews and use that to develop the agenda and content. This process ensures the meeting will be member-driven.

Make Sure Your Program Is Interactive

Many companies deliver canned corporate presentations at CAC meetings or, worse, treat such get-togethers as product demo or sales opportunities. Having an agenda that focuses on the host company instead of the members can cause a CAC to fail. The customers that join the CAC are there to be engaged, provide real input to the company and learn from each other. Consider following the 80/20 Rule, which in this case would stipulate that members talk 80 percent of the time while the host company talks only 20 percent of the time.

Hire Experts to Facilitate the Meeting

Companies sometimes put their own employees in charge of facilitating CAC meetings. This can be a mistake, because internal staffers who are not trained meeting facilitators could focus too much of the conversation on the vendor and they may unable to control presentations by the vendor executives who are also their bosses. Such meetings are bound to disappoint members. Consider hiring an experienced third-party CAC facilitator. They can ensure that meetings are conducted properly for maximum member engagement.

Turn Meeting Insights Into Action

CACs provide valuable input and guidance to the host company, and the host company must accurately capture this feedback and translate it into material action items. The host company should notify CAC members about the actions it plans to take and update them on the progress it is making in subsequent meetings. Members will be disappointed if they don’t see their valuable input resulting in real action by, or real changes within, CAC host companies.

Following those five steps right should put you on the right path to establishing a robust CAC program — one that will deliver positive results for years to come.

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