Customer Advisory Board: How to Start One in Your Firm

A customer advisory board, often called a CAB, is a hand-picked group of customers who meet on a set schedule. Your firm plans the sessions and usually pays the costs of attending. Members give open advice on strategy, products and services.

Mike Gospe, a CAB strategist quoted by Insight Partners, says a CAB is a program, not a meeting. Only your executives, your facilitators and chosen customers are in the room. Prospects, analysts and guest speakers are left out, because they change how candid the talk is.

A CAB is not a sales call, a customer party or a product focus group. It looks at the longer term. The questions are about how your customers' businesses will change over the next two to three years and how you can help.

Sources: Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022" (April 6, 2022); UserVoice, "How to Start a Customer Advisory Board" (November 19, 2019)

A CAB does not suit every company. Insight Partners lists seven signs that you are ready:

• You have more than 50 paying customers.
• Your industry is changing.
• You are ready to act on what you hear.
• Your whole executive team backs the idea.
• You have strategic questions no other forum answers.
• The meetings can fit your yearly planning.
• Your leaders truly want to listen.

Sources: Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022"

Start with what you want to learn. UserVoice names four common goals: understand market trends, check your product direction, learn what different industries need, and find new opportunities. Pick one or two so your limited time stays focused.

Then write a short charter. It states the purpose of the board, who can join, what you expect of members, how long they serve and how the meetings work. Insight Partners suggests two versions: an internal one that aligns your executives, and a friendly one you share with members.

Plan ahead. BigPanda, a company Insight Partners backs, advises at least three months between the internal kickoff and the first meeting.

Sources: UserVoice, "How to Start a Customer Advisory Board"; Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022"

Keep the group small. Insight Partners suggests 8 to 12 senior customer leaders. UserVoice says about a dozen is a good target, because a bigger group gives each person too little time to speak.

Choose people who are honest, who know your field and who differ from each other. Mix company sizes, regions and industries. UserVoice offers a rule of thumb: include the roughly 20 percent of customers who bring about 80 percent of your revenue, and add at least some of your largest accounts.

Think about the person as well as the company. The buyer who signed the contract may not be the person who uses your service each day. Some firms run two tracks, one for executives who talk about trends and one for hands-on users who talk about details. Some rotate members every 12 to 18 months so new voices get a turn.

When you ask, say what members get: a say in your direction, time with your leaders, a chance to meet peers, and early looks at new work. Also be plain about the time you need, including meeting length, any travel and how long they serve.

Sources: Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022"; UserVoice, "How to Start a Customer Advisory Board"

Before 2020, most CABs held one in-person day a year, often with a dinner the night before. Insight Partners says that during the pandemic many moved to three or four virtual meetings of about 90 minutes spread over a year. Gospe expects a mix of in-person and virtual formats going forward.

Either way, plan the agenda like a board of directors meeting. Build it around questions, not slides. Follow the 80/20 rule: your team talks about 20 percent of the time and listens the rest. Send reading and a short survey ahead of time so the live time goes to discussion.

For online sessions, keep each group small. BigPanda found that more than six to eight people on a video call leaves a few voices talking and the rest silent. It split members into groups by time zone and by how mature they were as customers.

Sources: Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022"; UserVoice, "How to Start a Customer Advisory Board"

The board only works if members see results. UserVoice puts it plainly: members want proof that you listened. Did the roadmap change? Did you shift strategy or invest in a new area? It calls this closing the loop.

After each meeting, hold an internal debrief while the talk is fresh. Give every action item an owner. Send members a short note on what you heard and what you will do. Then report back at the next session.

Insight Partners shares one example. A startup believed it had a churn problem. A CAB showed that some of its so-called customers were really partners, and that customers took the CFO and CTO's habit of jumping in to fix problems as a sign the firm was not ready for large clients. The company then built a customer success team, changed how it sold and onboarded, and reset its approach.

Sources: UserVoice, "How to Start a Customer Advisory Board"; Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022"

If you invite customers who compete with each other, plan the agenda with care. The Federal Trade Commission explains that dealings among competitors can be harmless or even helpful, but agreements such as price fixing, bid rigging and market division are always illegal. Keep talk about prices, bids and splitting up markets out of the room.

Sources: Federal Trade Commission, "Dealings with Competitors," Guide to Antitrust Laws

1. Insight Partners, "Customer Advisory Boards: How to Launch and Manage a Successful Program in 2022," April 6, 2022. insightpartners.com
2. UserVoice, "How to Start a Customer Advisory Board," November 19, 2019. uservoice.com
3. Federal Trade Commission, "Dealings with Competitors." ftc.gov