If You’re Not Careful, Your Customer Advisory Board Can Lead Your Company Astray
For many companies, Customer Advisory Boards (CABs) are the gold standard for market intelligence.
CABs usually comprise a company’s most valued customers. These groups meet once or twice a year over a sumptuous lunch to discuss market trends and offer feedback on the company’s strategies and product roadmaps.
Based on the feedback received in these meetings, the host will usually make big decisions about priorities, features, and budgets for the half-year ahead.
This makes intuitive sense. After all, who could provide better insights into product direction than the most dedicated customers?
Unfortunately, the views offered by top customers can be limited at best, or wrong at worst, and result in poor decision-making.
This, in turn, can lead companies to miss opportunities, challenges, and trends.
Exclusive Insights, Limited Perspective
CABs offer valuable insights but have inherent limitations that can lead your company astray.
The problem is that CABs typically consist of the largest, happiest, and most engaged clients in your customer base – true believers in your product who value the current offering and are fully convinced about the value it delivers.
In other words, only getting feedback on your offering from your best customers is like only asking your grandparents to provide an assessment of your quality as a human being.
CABs represent just one of four stakeholder categories you must consult when making decisions about your product.
The other three, combined, are often much larger than your group of best customers. Still, it is easy to overlook these stakeholders, but each one is equally significant.
- Non-Enthusiasts: These are customers who use your product but aren’t fervent advocates. Their feedback can highlight areas for improvement that the CAB might need to pay more attention to.
- Prospects: These are companies that still need to choose your product or a similar one. Their insights can illuminate why potential customers may hesitate to commit.
- Your Competitors’ Customers: These are firms that opted for your competitors’ solutions. Understanding their reasons can uncover gaps in your product or marketing strategy.
CAB Blind Spots
The danger of relying solely on CAB insights is that it can lead to a myopic product roadmap.
CAB members naturally advocate for features and enhancements that matter most to them.
However, these may not align with the broader market. Your company could end up prioritizing improvements that cater to the needs of a select few, inadvertently neglecting a significant customer base.
Also, CABs are not infallible trend spotters. Their discussions might miss emerging market trends or technological shifts that aren’t on their radar.
The bottom line is that their limited perspective can blind senior management to significant changes happening outside the CAB bubble.
Niche and High-Concentration Markets
There are some exceptions when weighing the value of intelligence from CABs.
If you have a company focused exclusively on niche markets, that market might be small enough that your best customers represent a sample of the entire marketplace.
So, too, with markets with high market concentration – large markets split among relatively few market participants.
Suppose your company specializes in technology for the pharmaceutical industry, and your CAB includes Lilly, Merck, Novartis, and ten to fifteen of the other top firms. In that case, there is little chance of getting misled. Your CAB is the market, and the insights from these top customers align closely with the broader marketplace.
Still, for most companies – those with more diverse or rapidly evolving sectors – over-reliance on CABs can be risky.
Balancing CAB Insights with Broader Research
CABs are undoubtedly a vital asset, but you need to augment them with impartial, third-party research that reaches beyond the realm of your best customers.
This research includes:
- Executive Interview Programs: Engaging with a cross-section of accounts not part of the CAB.
- Broad-Based Market Research: Keeping tabs on the larger market through surveys and analysis.
- Win/Loss Analysis Programs: Gathering insights from accounts that opted for competitors instead of your solution.
Using these programs to gather insights can ensure your product roadmap remains aligned with the broader market needs and stays on top of emerging threats and opportunities for your business.
To succeed, you need to understand the companies that love you, those who don’t, and those who aren’t your customers yet.
Click on the links above to learn how our research programs can provide a holistic view of customer and prospect needs, market dynamics, and competitive landscapes.
If you would like to learn more, you can contact us.