A customer advisory board and/or partner advisory board can provide a cadre of benefits to your organization, but this is only true if your board is launched and managed correctly. If it is not run properly, however, there are just about as many pitfalls that can come your way.
A customer advisory board or partner advisory board can afford substantial value to your business, in a variety of forms, including:
- Product direction
- Business direction
- Competitive intelligence
- Market sensing
- Customer loyalty
- Beta test candidates
- Customer champions
- Customer testimonials
Pitfalls you can Face from a Poorly Managed Advisory Board
When an advisory board is mishandled, there can be substantial, devastating and reverberating consequences to your business as a whole. Some of these negative impacts can be very difficult to recover from. These are just some of the more likely problems you could face from a poorly managed customer advisory board or partner advisory board.
1. Damaged Customer Relationships – Your most strategic customers are the lifeblood of your revenue and business success, and without them (in most cases), your company would struggle to survive. Imagine recruiting the CIO, for example, of your biggest customer, the one that brings in $4M annually to your business. Let’s say he becomes overly disillusioned by your next annual in-person meeting because it focuses solely on the benefits and needs of your organization and does very little to pique the interest of the member’s needs and concerns. This happens all the time with these advisory boards because practitioners are ill-prepared to gauge the pulse of the members prior to meetings and calls to determine what topics matter most to them.
What do you think happens when this executive – who gave you his precious time to come to your meeting – goes back to his office? He is surely going to complain to his colleagues about the meeting and what a waste of time it was. Imagine that next phone call between your account manager (who likely recruited the member) and this executive. I bet it won’t go well, and it could put a strain on your salesperson’s rapport with the member. Can you really afford this?
2. Damaged Company Reputation – When your members get into discussions about your industry with colleagues both inside and outside of their organization, you want your company’s name to come up in a positive light. This is all about getting (and staying) on that proverbial short list of strategic vendors. What if, however, the VP of Product Development, one of your members, becomes very displeased with your organization and how it handled the publishing of some confidential insight she provided to the board on a past member call? Not only would she get in hot water with her organization’s legal department (for endorsing your company publically) but she will be very unhappy with your organization. When she spreads the word to others, how do you think your company is going to look in terms of integrity, quality and trust? Not very good. This can have lasting repercussions to your brand and your reputation. Remember, these senior executives often have lots of team members and industry colleagues. After all, they’ve typically been in their industry for decades.
3. Misguided Market and Competitive Intelligence – Perhaps the single most powerful outcome from an advisory board is the invaluable insight you will receive from your members (who are top industry leaders) on your market, your products, your competition and your strategic direction. Other companies can spend upwards of $100,000 on market research to obtain similar intelligence.
Now, while this insider’s look at where you should take your company to realize the most success can be hugely beneficial to your business, imagine if you received misguided insight. This can happen and it is easier than you think. It is not because your members are intending to lead you astray. It is more a function of you not knowing how to successfully facilitate the extraction and transfer of such guidance. Poorly run advisory boards can yield important insight from meetings and calls, but it can be overly skewed depending upon how it was collected, interpreted and shared with senior management. Sometimes member feedback can appear earthshaking and incredibly impactful to your business, when in fact, it really is not and should in fact be discounted or put on the back burner. The only way to discern this is to properly facilitate, monitor, record and report on the meeting.
Often times, the capture and interpretation of these critical insights comes down to a tape recorder, a pencil or a keyboard. Therefore, very careful attention to detail must be taken to ensure their proper collection. There are certain best practices for doing this in a manner that all but ensures proper reporting on this important actionable intelligence.
These three pitfalls are merely some of the many things that can negatively impact your business as a result of a poorly managed board. Don’t let this happen to you. Become customer advisory board trained.