Customer Advisory Board: The Business Lifeline

The fundamental shift from shareholder to stakeholder is the new guiding principle behind successful and failing businesses. Whether a virtual process or a structured program, a Customer Advisory Board is a company's conduit to product development, company branding, and business profits. And for industries from Technology to Brick & Mortar, it's a process that can and must be put into place immediately.

The smartest people in your company cannot answer industry trends, business drivers, customer issues, and market opportunities as well as customers and prospects can. Organizations who listen to the right people—then act swiftly on that feedback—are building relevant products and gaining market share. Note the term "right people," revealing that some customers are just as capable of providing poor, misinformed or short-sighted advice. What, then, determines a qualified or informed customer? A common assumption is to start with the biggest spenders in your database. A word of caution: Cash cows are not always your strongest advocates. In fact, your "best" customers might be slow spenders, or might never have purchased anything from you. Consider yourself. Are you quick to spend money, even with a company you trust?

In addition to trust, what other qualities signal strong customer advisory candidates? Good board members are influential, informed, inquisitive, critically-minded, and loyal. Your customer advisory board is loyal to their community of friends, not to you or your products. If you can provide them with tools to serve their community then you've earned a customer for life. More importantly, you've earned qualified referral business. I also mentioned "critical." You will greatly benefit from customers who call you out when you blunder, or who challenge you on a flawed policy change. These individuals are invested in you and your service offering.

Unlike a generic target audience or demographic, you should choose people whom you know, and who know you. You only need to assemble a few for each major category of products or services. These are spokespeople for your business, your products, your staff, and your company vision. They have the ability to manage your company's brand. Sound a bit risky? This is today's and tomorrow's marketing reality.

What do you do with your Advisory Board? For starters, you don't inundate them with obligations. A quick casual conversation will yield more valuable insight than any online survey. Many sophisticated surveys only provide answers to "your" questions, when in fact they may not be the right questions to start with. Don't forget that their loyalty is with their peers and internal support groups. Following these types of conversations is more powerful than direct conversations with them. How do you follow these conversations? Provide them with a place to talk with like-minded individuals, or join their online communities. Social media makes meaningful conversations extremely accessible. Unlike eavesdropping, your customers WANT to be heard. They hope that their opinions and insights matter enough to grab the attention of somebody who's in a position to bring those changes to light.

ACTION ITEMS
Ask your customers whom they want to interface with in your organization. Involve as many as possible, but organize feedback so that it gets consolidated and acted upon. Set up an online community, or utilize existing social media channels to follow pertinent conversations.

CASE STUDY
If you own an iPhone, you'll understand this principle more fully. Apple spent more time with their street-smart customers than in researching the competition and employing leading technology minds. The iPhone is not merely an upgrade to smartphone technology. It's a tool for anticipating the needs of its users, i.e. the number of seconds it pauses before auto-filling a word, or user-defined suggestions from common misspellings, or its programmed "wiggle room" for irregular human-touch commands. Unlike the competition, the technology doesn't run ahead of hand-eye coordination. iPhone technology is built to be a conversation with its user. This is customer feedback in action.

Characteristics of Relationship-Driven Clients

Here's a checklist for evaluating and prioritizing relationship-driven clients. A smart rating system applies to every company database, revealing only the marketing campaigns that matter. It's tempting to jump to conclusions in building your Client Personality Profile. Keep in mind a few "myth busters" on Loyalty Marketing:

YOUR BEST CLIENTS...

Your best clients are not always your biggest spenders
Clients are most valuable not because they are your cash cows (though a profitable side of beef is always nice) rather because they're with you for the long haul, they help you in tooling your best message, and most importantly, they help corral new business to increase profits.

Your best clients might never have purchased anything from you.
That's right. Some of your biggest customer assets might just be prospects. Remember, the value of a client is calculated not only on the revenue they create, but also on revenues from referrals. It's an exponentially powerful formula.

Your best clients don't like to be "sold to."
You never earn the "right to sell" to a customer. When they sense you're selling to them, they'll feel like a project or statistic (even the most loyal of them). If you want a loyal client, throw the traditional sales tactics out the window and stay genuine.

Your best clients aren't always the first to respond to offers.
Don't tag your best customers based upon quickest response times. This approach is fundamentally flawed because it mocks the intelligence of a healthy client who makes informed, methodical decisions. Consider yourself as a client—are you the quickest to make a decision or a purchase?

Your best clients aren't easy to locate in your Web stats.
Test it yourself. Are your best customers showing up at the top of your Web stats? Is Web page "duration" an indicator of piqued interest? Or just as easily an indication of "being lost on the page" or "breaking to nuke a frozen burrito?" Stats have their place in any sound marketing campaign, but they're not the strongest indicator.

Your best clients aren't compelled by pricepoints.
This should come as a relief, since nobody wins at the commoditization game (somebody's always cheaper). In addition, bottomless pricepoints attract flighty commodity-driven customers. Value-driven customers are accustomed to paying what something is worth—your job is to show them the value of that something.

Your best clients can't be found in a predictible demographic.
This fact sometimes creates resistence, because "demographic profiling" is easy to measure. Keep it in the cards, but use it in a supporting role to much more potent "behavior profiling" strategies.

Your best clients differ from each other in their sales cycles.
It should come as no surprise that your customers (even your best customers) are all at a different point in their purchase decisions. Additionally, sales cycles differ greatly in length. All of this amounts to an exercise in "good listening." Don't pitch the "closer" to your elite list all at once, instead offer multiple offers for multiple points of engagement. To restate, "loyal customer" doesn't mean "please take my money."

Your best clients must feel like they're genuinely understood.
The value of a good client list boils down to the "truth" you can get from them in a mutual-respect environment. Companies are constantly adapting to changes, trends, supply, demand, economic factors, and more. As soon as you've lost a good client's respect, you've lost a resource for roadmapping profitable campaigns.

Your best clients want shortcuts, not "logins."
If you're looking for a customer who will "jump through hoops" then you'll likely be short-changed. In exchange for their loyal business, your best clients want no-strings-attached value in return. We're not talking about dumbing down customer privacy, rather avoiding the points of friction that will frustrate your clients or make them feel monitored. Web cookies can be a great upsell/resell tool, but be sure they're functioning as they should.

Your best clients want benefits, not features (nobody wants features).
Self-explanatory

Your best clients will always champion good referral programs.
We often think that people who like our products know intuitively how to point others through the right doors at the right time. Just as we train our sales staff on best elevator pitches, customers and prospects need similar tools. Make it easy for best clients to "sneeze" your products. Better yet, offer them a concrete incentive for doing so. Not even the best clients will do something for nothing. Give them something of value for being contagious.

Your best clients should help engineer your product offerings.
If you're strategizing about your next best marketing campaign in staff meeting, you're going about it all wrong. The whole basis for refining your customer base is to glean a qualified mouthpiece for your product offering. If your best customers aren't sharing their ideas with you, maybe you haven't invited them to a staff meeting lately.

Your best clients are innately loyal, and are not "turned into" loyal.
I like to save the best for last. I've seen a lot of dollars in research, technology, and "marketing speak" revolve around the idea of "converting" customers into loyal customers. This mentality defeats the whole process of growing the right customer segment, and letting the rest drop off the radar. The danger with the "no client left behind" approach is there's no clear-cut process for filtering your database, since all would wear the same number of stars on their foreheads. Innate loyalty in customers comes through only when company teams do their jobs right.

Every customer gets respected, but it's vital to focus on the right customers—your "evangelists." When you craft a message that speaks to your hand-picked crowd, that message will sift out your profitable clients from your loss leaders. Although I might concur that anybody can become a "loyal customer" if you wrok hard enough on them, but consider the costs: You'd be expending enormous resources and neglecting the clients who need you most—whom YOU need most.

Just a note, American Express took this idea to the extreme when they actually "paid" their riskier customer base to leave. How did that turn out? Google "AmEx pays customers to close accounts" to see some of the negative publicity. Source: Wall Street Journal

GETTING STARTED
To better illustrate the attitudes and activities of relationship-driven clients, I've posted a 5-minute demo.