Recently I’ve been asked a lot about the differences between Customer Advisory Boards (CAB) and Customer Advisory Councils (CAC). They are often considered synonyms, but they mean very different things. Here’s a snapshot of why they are different.
Before jumping to tactics associated with any customer meeting, it is always good to reaffirm your specific objective. There are many tools available today to engage customers. The trick is determining the best tactic that will get you the right answers from the right set of customers. I often refer to this pyramid chart to help leadership teams clarify the objective and desired outcome.
The vertical access provides a reference between the type of discussions you are interested in having with your customers. “Tactical topics” refer to subjects that may be operational or real-time in nature (e.g. customer feedback and input collected on a daily basis). The wide base of the pyramid suggests that there may be many people in your organization engaging with many customers on a daily basis to collect this information.
The middle layer of the pyramid is defined as “product direction.” This layer suggests that a subset of your customers may engage in product focus groups or user groups to provide guidance on your immediate product roadmap.
And the top layer is reserved for the most strategic conversations. These discussions tend to focus on trends, drivers, and priorities shaping the future of your customers’ business and how your company can help them succeed. It is at this top layer where CABs and CACs fit. However, what they are and how they work are very different.
Defining the CAB
The CAB is reserved for your most strategic conversations. Consisting of maybe a dozen decision makers from your most strategic customers, these discussions revolve around trends, drivers, and priorities your customers are facing. In these intimate, closed-door meetings, the center of attention is the customer, not your product. Although we do want to collect information and guidance on product roadmaps, we are most interested to know how and why these customers operate today to solve business problems relevant to your company’s vision and the value you can provide them. And, we want to know how these operations may be changing or evolving in the future so you can guide your business accordingly. Consider that the leaders sitting around the table are defining the future of the industry they represent. The potential for your company to leapfrog the competition should not be underestimated. The photo illustrates the typical seating arrangement found in CABs, either around a boardroom or U-shaped table. Company executives are interspersed between customers. Everyone is treated as an equal. Attendees are hand-selected and kept to a very small group representing a customer “inner circle”. Most importantly, these are conversations, not presentations.
- Objective: to understand customers better
- Type: Business strategy-level focus groups (3-5 year horizon)
- Focus: trends, drivers, priorities shaping customers’ businesses; future investments
- Attendees: 8 – 16 customer high-ranking decision makers (per region), invitation only, no delegating attendance
- Agenda: discussions, not presentations (3-7 slides only)
- Frequency: 1 / year (typically)
- Location: offsite
Defining the CAC
The CAC is a different kind of customer engagement existing at the cusp of “product direction” and “strategic direction” conversations. The CAC is more about sharing product direction details and use-case scenarios. Presentations may include customers sharing their own success stories on how to get the most value out of your products or services. The atmosphere is more akin to learning. The host company shares a presentation to educate the group, give product updates, and ask for directional guidance and feedback. As the photo illustrates, the room layout is quite different from the CAB, and the number of participants is greatly increased. Customer participants are often added after winning a big deal with them. Sales people may offer new customers a seat at the council in appreciation for their business.
- Objective: to share product direction with customers (18 – 24 month horizon) and get feedback to drive mid-term roadmaps
- Type: Product strategy, typically
- Focus: Roadmap strategies; use cases
- Attendees: 40 – 50 customers ranging from decision makers, to mid-managers, to key influencers
- Agenda: presentations with Q&A
- Frequency: 2 / year (typically)
- Location: offsite or onsite
The right tool for the right job
Both the CAB and CAC are incredibly important tools designed to engage a select customer segment. However, the attendee list and type of dialog that unfolds is very different in each. Some companies embrace both a CAB and a CAC; others require only one. It depends on the objective and the specific questions the host company wants to ask and what they plan to do with the information they collect.
Interested in learning more? Contact Mike Gospe.