Clearing the Air With Customer Advisory Councils

In many technology-driven companies, customer advisory councils are the weapon of choice of marketing and sales departments when the unmet customer needs get lost in new product development.

Anyone who has worked in the technology industry long enough has been handed a product or application that is an engineering love child. Born out of a passion for technology and just enough room in a product road map to substantiate its existence theoretically, these products meander through their life cycles, destined to be price-elasticity experiments in midlife and ultimately blown out below cost to channel partners.

Where Do They Go?

Too bad there is not an “Island of Misfit Products.” If there was, some of the ones I have been handed would be the tour guides there. My first one was a homely little printer that was built like a Hummer and weighed as much as one too — it was perfect for the home office of a bodybuilder who speaks Japanese.

What became clear after managing a few applications and products that started out as engineering love children was that no one in our customer base really cared for them. Our development cycles had to change. Even our distributors, the proxy of the Island of Misfit Products, couldn’t get excited — that was scary.

Lessons Learned

After having completed a dozen councils in three years, one fact immediately emerged: All of us were wrong about the future product direction. Customers took us into entirely new businesses and products we’d never come close to thinking of. Here are the lessons learned:

• Define only a few highly specific advisory council objectives. This is critical to take on first because engineering often has a completely different perspective of what the council will accomplish versus marketing, sales or service.

  An excellent first objective for an advisory council is to get a sense of the gap between what the company has delivered in terms of product or application value and fit with their needs, pricing and licensing policies, service, service programs and overall performance of the company.

  Go after the gaps between what you’re delivering in each of these areas and the value your customers perceive they are getting. Lastly, too many objectives makes the afternoon so crammed that there is a tendency to rush through the remainder of the agenda.

• Test the advisory council pitch presentation and guidelines. It’s critical to get feedback on the pitch presentation and guidelines from both sales managers and a few trusted customers before formally launching the program. The intent of the pitch presentation is to explain why the advisory council is needed, what the agenda is and the overall expectations for participants. You’ll want to get feedback on strategy issues, as well.
• When planning the council, think “event” over “strategy interview.” There is a difference — an event is one that has a balance of social and meeting activities, while the strategy interview is completely focused on just getting information. Plan for an event far enough in advance to lock in an economical rate at a local hotel or one that has golf and other activities — it’s a good way to drive up attendance. Think of this as an event that will hopefully become a tradition in your company.
• Strive to create a CEO advisory council first. Get the highest ranking executives you can from your customers, as these executives are eager to learn from each other as well. While it may be difficult to get on their calendars, I found having that company executives recruit and invite them personally worked well. It’s important to keep this group small — around 10 to 12 executives — so make sure there is enough interaction and give them a chance to review the agenda first.
• Keep council members on the same level. It’s also important to keep each group of council members at approximately the same level of managerial experience. The C-level and senior managers are there to learn from each other; typically mid-level managers are there with a very specific set of problems to fix. Keep these groups differentiated with agendas aligned to their needs for best results.
• Budget at least 60 percent of the agenda specifically for feedback. Now this sounds pretty obvious, yet I’ve seen some advisory councils that are more like fan club meetings than true feedback sessions, maybe that’s why I was invited as an analyst. Yet the best ones are those that allow the senior executives of your customers to speak their minds.

  I’ll never forget the CIO of a major pharmaceuticals company talking about how pricing policies put his department and the company through hell; he spoke only ten minutes but his comments made a lasting change in pricing within two weeks.

• Bring a “buck stops here” mentality to the council event. The best advisory council meetings are run by either the CEOs of smaller companies or divisional heads of larger ones, and all the best events have a no-nonsense approach to answering customers’ questions about what will and won’t be supported, what changes in strategy will and won’t happen, and in the best councils I’ve seen, have the ability to make commitments to change service policies, on the spot, and make it stick.

  That speaks volumes to the commitment for getting customer feedback and acting on it. This includes following up with the council notes, action items from management, and comments on which issues are going to be acted on.

• Thank customers by acting on their advice. Earning credibility through this step sets the foundation for the ability to go back again and again, to make sure your company is staying aligned with the needs of customers.

Associated Costs

In terms of costs, advisory councils can be held for less than US$10,000 — providing just the meeting space, catering and hotel rooms are covered. For larger events that include a two-day agenda, airfare and up to 20 C-level executives invited, the costs can approach $60,000 to $100,000, depending on location.

The payback, however, of these advisory councils is worth it. Nowhere will the gap between what you’re delivering and what your customers need come out as fast than during a well-run customer advisory council.