Customer advisory council
Encyclopedia
A Customer Advisory Council (also referred to as a Customer Advisory Board or CAB)is a form of market research
Market research
Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy...

 whereby a group of existing customers is convened on a regular basis to advise company management on industry trends, business priorities, and strategic direction. The CAB differs from traditional focus group
Focus group
A focus group is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement, idea, or packaging...

s in the following ways:
  • Membership is made up of senior executives from customer companies, not product users
  • Topics of discussion tend to be more strategic than tactical

Composition

Customer advisory councils and CABs typically consist of 10 to 15 customers selected to represent a cross section of the customer base. Proper selection of attendees requires identifying not only the most strategic customer company, but also the proper individual who can best represent their company's needs, priorities, and directions. Key individuals who have a strong relationship with the sponsoring company and have valuable ideas to contribute are ideal candidates. Membership may also benefit from a few outspoken customers who have voiced strong complaints in the past about existing business practice.

Frequency and format

It is common practice for customer advisory councils to meet 1-2 times per year. More frequent meetings are usually not practical due to time constraints of participants. Furthermore, it takes a significant amount of time to process the advisory council recommendations and implement them within the existing company strategy.

Meetings are usually held face-to-face for half a day or more. Meetings can also be held via teleconference
Teleconference
A teleconference or teleseminar is the live exchange and mass articulation of information among several persons and machines remote from one another but linked by a telecommunications system...

 or through interactive means though the level of 2-way dialogue may suffer. Meeting agendas usually leave ample time for facilitated discussion using a variety of brainstorming and workshop techniques.

Council member expectations

Council members usually participate on a voluntary basis for the opportunity to influence company direction in a way which is beneficial to their own needs as well as the customer community. To maintain credibility it is important that the sponsors are committed to follow through on key recommendations made by the council or at minimum provide a rational explanation for those recommendations which are ultimately not implemented. Participants also typically benefit from the prestige of participation, ability to network with each other as well as company officers, and opportunity to share best practices and new ideas.

Public and private companies which have formed customer advisory councils

Customer councils and CABs have grown in popularity over the past few years, especially in the hi-tech industry sector.
  • Ariba
  • BMC Software
    BMC Software
    BMC Software, Inc. is a multinational corporation specializing in Business Service Management software, with record annual revenue in fiscal 2009 of $1.87 billion...

  • CCH SFS
  • Dell
    Dell
    Dell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...

  • HP
  • IBM
    IBM
    International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...

  • SAP AG
    SAP AG
    SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...

     (called SAP User-Group Executive Network)
  • Sun
  • Symantec
    Symantec
    Symantec Corporation is the largest maker of security software for computers. The company is headquartered in Mountain View, California, and is a Fortune 500 company and a member of the S&P 500 stock market index.-History:...

  • Wells Fargo
    Wells Fargo
    Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...

  • HCL Technologies

External links

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