The Pros and Cons of Customer Advisory Boards
A customer advisory board (CAB) is a marketing strategy used by businesses to engage with their customers. Like surveys, conferences, and social media marketing groups, CABs provide companies with insights and advice. Also known as customer advisory councils (CAC), the “customers” who sit on the board are usually C-suite executives—top industry leaders with knowledge of the marketplace. Therefore, they can provide in-depth insight, including their overall impression of a company.1 Board members provide guidance in any number of areas including, but not limited to, product direction, new market penetration, and messaging.2 Because a customer advisory board should serve as a representative sample of the company’s broader market, a good CAB will include a cross section of individuals from a variety of target markets.1
As with any business plan, there are pros and cons to using a CAB as a business marketing strategy.
The Pros of Customer Advisory Boards
A CAB can:1
- Become a reliable group of champions for the brand—that is, brand influencers. The board members may end up working directly or indirectly to increase customer loyalty.
- Offer validation for new product ideas.
- Guide the company’s strategic direction. By offering an open forum, the VIP customers—the members of the CAB—have an opportunity to speak candidly about a company versus the competition.
- Guide the product roadmap by offering insights into how best to use existing products, what aspects of those products are most important or beneficial to them, and what other functionality or tools they believe would complement or enhance the product offering.
- Help shape a company’s marketing messaging.
- Gather market intelligence.
- Act as beta testers for a company’s new products.
- Help the company identify new markets.
The Cons of Customer Advisory Boards
- If not adequately trained and managed, a poorly run CAB can result in more negatives than positives.3
- Establishing a strong CAB program can take away from other business resources. It requires time, resources, and logistics that include the drafting of a charter, membership and recruitment criteria, agenda and meeting material preparation, and more.3
- It takes planning. Developing a CAB will take at least six months. Accelerating the process could negatively impact both a company’s staff and the consumer board members being recruited.3
- A poorly managed CAB could result in damage to a long-term customer relationship.3
- Poorly constructed CABs can be overly skewed, resulting in insight that does not reflect the general marketplace.4
As part of Walden University’s online master’s in marketing, business school students will study marketing strategies such as CABs and other business marketing campaigns—both traditional and 21st-century models. As the marketing landscape evolves, an online marketing degree can prepare students to be at the forefront of a growing field. In fact, according to the U.S. Bureau of Labor Statistics, marketing-based jobs such as advertising, promotions, and public relations will increase 12% by 2022,5 making this a great time for anyone who wishes to help define and redefine brands while also reaching, engaging, and influencing consumers.
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