How to fund your Customer Advisory Board

Here are 3 tips to help your fund your Customer Advisory Board (CAB) initiative.

1. Understand the expectations

There is no “one size fits all” CAB initiative. Notice that I said “initiative” not “meeting”. This is because the CAB implies your commitment to sponsoring an ongoing strategy-level, future-focused dialog with a small set of your best customers. Hosting a single CAB meeting is considered bad form and will disappoint your customers. It is also true that your unique objectives will define the parameters for your CAB. When setting expectations internally, you should consider these questions:

• To test the concept, is your scope to fund a CAB pilot meeting only? If so, what do you intend to do after that?
• Do you wish to fund a global CAB initiative that would include regional meetings? If so, how many regions?
• Is there an expectation that multiple business units in your company will also want their own CAB?
• What cadence of CAB meetings can your organization support operationally?

These are weighty questions because more important than money is managing your internal resources and the expectations that come along with the CAB. Customers will expect you to listen and to consider their input and advice as you make future business decisions; and they’ll want to hear from you on if and how you used their input. Your executive team will expect the company to have shared and digested this information in order to make the best business decisions possible. Your business strategy, marketing, and sales teams will expect to learn things about the customers (and the industry) that they didn’t know before. These insights often open doors to new opportunities for collaboration and revenue growth with your best customers. That means that when you consider funding, you should look to the bigger picture.

2. Factor in all the costs

Ok, let’s talk about dollars. Hosting a single CAB meeting requires budgeting for the following:

• Hiring a CAB expert to guide you through the process and facilitate the meeting.  Each CAB facilitator organization has their own approach. So, ask them for budget guidance based on your specific objectives and needs.  (Read why you don’t want to facilitate your own CAB meeting.)

But, you’ll also need to factor in the following:

• “Wheels down to wheels up” customer expenses — meaning, it is customary for the host company to pay for ground transportation from the airport to the hotel, meeting room, meals, any extra curricular activities, and transportation back to the airport.
• Network reception and dinner the evening before.
• Accommodations at a 5 star hotel.

There are some exceptions and other various rules of etiquette, but these are the biggies.

CAB budgets vary quite a bit. Large enterprises running a global (multi-regional) CAB initiative can easily invest $200K annually or more. On the other hand, smaller tech companies sponsoring a CAB in a single region may invest around $50K annually. Again, your situation will be unique, so ask for a custom quote, not the off-the-shelf price list. Bottom line: be prepared to work with your CAB facilitator to design a package that works for you. And, be prepared to invest properly to achieve the business outcome you desire.

3. Fund centrally, execute locally

The marketing department is often tasked with funding the Customer Advisory Board (CAB). But is this the right organization to do so? Personally, I believe that the CAB initiative should be funded at the corporate level (not at the marketing department level). This is because of the following reasons:

1. Customers view your company at a brand level. They don’t know, and frankly don’t care, how your company is organized. So, if you are planning multiple CAB meetings annually across the world, you should think about having some brand consistency in your positioning of the CAB. You’ll also need to be crystal clear on how and where the CAB fits in your broader voice-of-the-customer efforts. Otherwise, you may cause customer confusion regarding your engagement strategy and tactics.

2. Every department in your company will benefit from the CAB, not just marketing. Engineering and R&D will benefit from better understanding the problems customers are trying to solve and how they are using current products and technologies to do so. Marketing and sales teams will benefit from better understanding the trends and drivers shaping the customers’ investment priorities in the near future. This knowledge will create opportunities for new types of conversations and opportunities for vendor-customer collaboration. This is the key to strengthening customer relationships and discovering (and figuring out how to sustain) your true competitive advantage.

This leads to the next question: where should the funding come from?

In some cases, the best answer is that the CAB initiative is funded by the CEO. It’s a special budget managed at the corporate level.

In other cases, the CAB is funded through shared financial contributions from each department, region, or business unit. While the CMO may be the CAB Executive Sponsor, funding can be contributed by each department or each business unit. This inspires shared accountability and alignment within your executive team. And with each department or region or business unit contributing funds, they will have a stake in the outcome.

Either model is appropriate for a corporate initiative.

Planning Your CAB

Mike is a master at helping you understand and navigate internal politics. For more details on how to bring your advisory board meetings to life, check out the definitive CAB operations manuals: Flipchart Guide(TM) to Customer Advisory Boards, Volumes 1 and 2. They offer case studies, best practices, templates, and techniques to help you unlock the secrets to sustaining your competitive advantage.

Mike Gospe runs KickStart Alliance’s Customer Advisory Board practice. Since 2002 he’s helped deliver more than 100 CAB meetings for some of today’s most innovative companies.