Rethinking Customer Advisory Councils

by:Evan Hackel

Evan Hackel

Companies tend to hear from two types of customers – the very mad and the very happy. Meanwhile, the vast middle is quiet. Surveys and the ever-popular Net Promoter Score give great directions but at best only highlight issues. It is like looking at a 2D picture of what is on customer’s minds, not a fully dimensional one.

There are other sources of feedback too. Some comes from reviews that customers post online. Some comes from the phone reps and other front-line people in your company who interact with customers every day. Still more comes from your salespeople, who succeed or fail based on their ability to understand and meet your customers’ needs and expectations. Although this information is great, it often lacks the need you need to make high-level decisions.

If you want actionable feedback you can use to find real solutions to bigger issues you are facing, you need to dig deeper and have more meaningful conversations with your customers. The answer is establishing a customer advisory council or councils.

Focus Groups vs Advisory Councils

There are similarities. But unlike full advisory councils, focus groups only meet once, and each new group is made up of fresh people. In general focus groups provide the feedback you need when the economic value of each of your customers is comparatively low – think grocery-store or restaurant customers.

The key to successful focus groups is to allow plenty of time for open-ended feedback. And focus groups don’t need to be run by research companies, you can simply invite several groups of customers in for lunch and discussion.

Advisory councils are different. They are ideal in situations where the economic value of each customer relationship is high, and you’re consistently doing business with an important group of core customers.

Key Traits of Customer Advisory Councils

The concept behind a customer advisory council is simple. You invite a group of about 10-15 of your best customers to join your council and give you feedback about both your company and your products. Ideally, it is best to have your entire council convene as a group once or twice a year at your company or conference center. But because it is difficult to get busy people to contribute that amount of time and disrupt their working lives, you can also keep in touch individually with your council members via email, video calls, or periodic phone calls. That might not be optimal, but the point is, it is better to have a customer advisory council than not to have one at all.

Best Practices for Getting the Most from Your Council

  • Don’t only invite your biggest fans to join – Of course it is tempting to invite customers who think you and your offerings are nearly perfect. They might stroke your ego, but will they give you the kind of objective, or even hard-to-swallow, advice you need to hear? So as you create your council, ask your salespeople to nominate some customers who are the most difficult to sell, not the easiest – the customers who ask the hardest questions.
  • Rotate your members. It is ideal to have a combination of fresh members and seasoned members on the council. Because members who have been on for more than three years tend be less effective, rotating your membership is important. Having a two or three-year term makes sense. If you are just starting your advisory council and plan to have three-year term and your goal is to have 15 members, start year one with five people with two-year terms, and five people with three-year terms. Then at the beginning of the second year, add five more people with three-year teams. If you follow this plan, your rotation will be set.
  • Prioritize what you want to learn from members – In general, this falls into three levels: big ideas about where your company is and should be going; feedback about the competitiveness of your products and services in the marketplace; nuts-and-bolts feedback about your employees, website, advertising, marketing and more.
  • Avoid turning meetings into sales pitches – Selling members aggressively is one of the quickest ways to demotivate a customer council and encourage members to leave. Also remember that while you will show off your new products and invite comments, using your council as a no-cost focus group will only turn members off.
  • Ask questions that go deeper than “are you buying from any of our competitors?” – Granted, that is an important question to ask, but you need to dig by asking questions that help you understand the deeper issues, and the decision-making process, that lead your customers to buy what they do. Discussions on this topic can become pretty philosophical. What fears are driving your customers now, such as competition from abroad, Federal regulations, or other larger trends? Try to dig deeper to understand what motivates buying, and to find ways to align with your customers’ motivations and fears.
  • Meeting Length – To get deep in conversation, meeting length is normally two days. If you have really deep relationships – like those between a franchisor and franchisees – three-day meetings may make sense.  You need a lot of time for free conversation.  If all your business is local, one-day meetings held more often can work out.  

What Incentives Are You Giving Members to Be Part of Your Council?

Council members find tremendous value just though participation and networking with other members and senior executives.  So treat them well, but don’t pay them.  If you compensate them, you have upset customers that are on your paying council and members of the council won’t want to leave.  However, treat them nicely, put them up in nice hotels and provide great meals.

A final thought . . .

A client of mine once held a three-day advisory council that he called a President’s Meeting.  Following the meeting, he measured sales for 12 months. He was pleased to find that the sales increase from the companies represented on his council was 33%, vs. an 8% sales increase among the rest of the company’s clients. The message? People who are more engaged are better customers.