Good market intelligence is imperative in today’s increasingly competitive environment. Product segments are commoditizing; product life cycles are shortening; and with smart competitors in almost every segment, CMOs and their teams need all the good market intelligence that they can get to develop and implement their marketing strategies.
The question is, how do you get good market intelligence that is relevant, timely and actionable? Ad hoc market research projects, surveys, syndicated research reports, trade shows, feedback from the sales team and field trips to customer sites are some of the ways of learning market requirements, each with its own associated positives and negatives.
But there is another way to collect information about your market, and that is to set up a multisegment, multipanel customer advisory board (CAB). CABs have been around for a long time, and, if done right, they can make a great contribution to a company’s marketing strategy. Today CABs use teleconferencing and the Web in concert with opt-in panels that allow companies to interact with customer communities globally. CABs provide the ultimate resource for understanding customer needs: customers themselves.
This paper will describe the benefits of a CAB and how to implement one. It should be noted up front, however, that CABs can make only a limited contribution to finding new customers and markets, but they are great if you want to sell more to current customers.
One of the greatest benefits of a CAB comes from formalizing the process of engaging in customer dialogue. By establishing a defined business process, CMOs create a resource that provides a regular and steady stream of information that is of value to product and marketing managers and those responsible for marcom, PR and competitive strategy. It also reduces the inevitable risk associated with bringing new products and services to market. A CAB also builds customer loyalty, and is more scalable, flexible and cost-effective than alternative market research processes.
Market Intelligence Today
Companies often decide what products to build and what product features to include, and then they develop go-to-market strategies based on the judgment of decision makers with varying levels of experience. A less risky but often expensive source of market intelligence is to conduct ad hoc quantitative or qualitative market research to answer specific questions managers have about product or service feature prioritization and go-to-market or competitive strategies. While there will always be a place for other research methodologies – such as surveys, industry reports and focus groups – a good CAB can often answer many of the same questions with less cost and effort.
Building a CAB
A CAB may be as simple as a single panel of customers that meets once or twice a year, but this barely scratches the surface of a CAB’s potential. You’ll get even better results from multisegment, multipanel CABs. Here’s how to do it:
The CAB’s goals should be consistent with your company’s strategic marketing plan, as it is the marketing department that will take ownership of managing the CAB. Marketing should establish two or three overarching goals that the CAB initiative should address during its first year. And these goals should be updated every year.
Include Several Market Segments
CAB panels, ideally consisting of eight to 12 customers each, should reflect the market segments important to your company. You can define segments by product or service, by geography, by customer size, by channel or by a combination thereof. For example, a six-panel CAB might have different groups for customers in Europe, North America and Asia Pacific, and, within those, subgroups of customers who use product A or product B. In this case, you’d end up working with a total of 48 to 72 customers. Then you can grow and add more panels as you need more market segments represented. A CAB resource is flexible and scalable.
Participating on a CAB should be a win-win proposition. Customers usually value deepening their relationship with a vendor and are, therefore, willing to join a CAB. In turn, CAB panel members representing key market segments contribute to the development of better products and services, thereby allowing the company to deliver more value and shorten its sales cycles.
Clear criteria must be established for determining who from each customer organization will be invited to join the CAB. It may be a top executive or a key decision maker in a specific department. Candidates might be identified according to their years of experience working for a company and using the vendor’s products there. It could be your primary customer contact with whom you deal most directly. Ideally, your CAB will be comprised of customer representatives who are invested in the vendor relationship. Customers with whom you do significant business, and where there is significant growth potential, should be represented on a CAB panel so you can maximize the value of the relationship.
Someone in the marketing group should own this initiative. Once the CAB is built, this person will review the research content or topics submitted each quarter by product and marketing managers and work closely with them to determine how their research needs might be best answered by the CAB.
Hold CAB Panel Meetings
Even in this Web 2.0 world, in-person meetings still have real value, and you should consider holding an annual conference at your offices or other location where CAB panelists can meet and greet each other and spend a concentrated time period focused on your company’s issues.
That said, simultaneous teleconference and Web-based sessions work great for quarterly get-togethers. Call too many meetings, and customers will find participation onerous. But if you meet too infrequently, you’ll inhibit the spirit of camaraderie and teamwork and lose the momentum that delivers maximum results from the CAB.
Most customers are comfortable with online meetings, so it should be reasonable to hold, for example, a 90-minute session each quarter with customers who can really address the questions your company needs answered.
The meetings should be run either by an in-house facilitator or an independent professional. Either way, it’s important that customers are given the opportunity to express themselves in the areas that are important both to them and to your company. One of the major failings of CAB programs is companies using them to pitch their products. That kind of self-serving approach can kill a CAB initiative fast. It’s much smarter to listen to customers and gain a true understanding of their needs. A CAB is an ideal venue and process for listening and learning … and being truly customer-driven.