Although the benefits an advisory board can bring to an organization are many, there is always a business justification phase one must go through with senior management to gain the necessary budget and approval to form and run such a board. This process can be arduous and take some time, but if you are prepared, the pain can be lessened.
Justifying a Customer Advisory Board in 6 steps
Step 1: Compelling Reasons
Make a list of the compelling reasons and business benefits of a customer advisory board. These can include the following types of justifying points:
Business Reasons – For example, We need to get closer to our strategic customers and establish a relationship with higher level buyers.
Business Benefits – For example, The board can help us identify new products, market segments and business opportunities.
It is also important at this stage to anticipate what objections your management might bring up and to have prepared, canned answers for these challenges.
Step 2: Anticipated Success
Envision what a successful advisory board would look like and what value it would bring to the company. Describe that success in written or graphical terms to illustrate the return on investment. This is a really important step in gaining management support, and it is likely one of the first questions you will be asked. “How will we measure success?”
You have to paint a very clear and enticing picture of what would be considered success in such an endeavor. Consider very real and specific objectives. For example, We will have at least 10 strategic customers at face-to-face annual meetings.
Step 3: Identify Human Resources
Figure out who can help run the day to day operations of the board and work with any outside professional services firm you anticipate hiring. These individuals need to have the availability or have their workload lightened to make time for this strategic initiative. A single board will require about 5-10 hours a week of time when averaged across a year’s time. Some weeks/months will have more time requirements than others, especially around meetings.
Step 4: Finding Budget to Fund your Advisory Board
One of the most challenging aspects of gaining approval to run a board is finding the necessary funding to do it right. Some companies spend up to a million dollars a year on their boards, while others try to scale back expenses but still wind up incurring upwards of $250,000 annually. Either way, a board can cost your organization a substantial amount of money and you need to find ways to identify available funding and minimize the sting of the associated total price tag or your executive team is sure to close the door before you can walk through it.
An important note is to be sure and consider all of the different costs you might encounter with the board. Will you need to develop a private portal to communicate with the board, for instance? You do not want to forget about some of these extraneous costs because it will be very difficult to secure any extra funding later on. Be sure to build these costs into your total number when seeking the funding you need.
Step 5: Identify The Board’s Proposed Focus
Anticipate/propose what the board should focus on and which types of organizations should be on it. Will it focus on a specific product, a particular market segment, a hot trend, a new market opportunity, etc.? Also, will it be comprised of organizations of a certain size, certain vertical? What level of individual will the members be? Will they be CEOs, Vice Presidents, or Directors, e.g.?
Step 6: Put it all Together
Once you have collected all of the information outlined in steps 1-5 above, put it together into a succinct, short PowerPoint presentation and schedule a meeting with the key decision makers in your organization. Then, before the meeting be sure to practice your delivery at least twice to ensure you are ready to make the best pitch possible. A good method for practicing your presentation is to talk to your pillow. Prop it up on the bed or couch and deliver your presentation as though it were your actual audience.