Well-run Customer Advisory Councils position you above the crowd.
Imagine a hotel conference room where the key decision-makers from each of your 10 most important material handling accounts are comfortably seated. Let’s also include two top representatives from your firm, the president and vice president of sales. Think of a packed, five-hour agenda where each executive shares his or her ideas, expertise and experience. Everyone is intense, focused on improving business processes and formulating strategies to conduct business more efficiently and effectively. You are the driving force that made this important meeting happen. Would such an event raise your stature as a valued supplier?
For several leading distributors that have implemented Customer Advisory Councils, this scenario repeats itself twice a year. They have discovered that well-run Customer Advisory Councils can make a major impact on the breadth and depth of their customer relationships. These companies have firmly positioned themselves above the crowd. They have achieved and continue to reinforce an enviable level of competitive differentiation.
Planning and preparing to hold a Customer Advisory Council meeting requires substantial effort and commitment. Done properly, however, the hard work can be well worth your labor.
To improve your odds for success, think about a number of key issues. For example, which customers should you invite? How can you motivate customers to participate? What should you talk about? What steps should you take after the event takes place to ensure that your hard work pays off?
Step 1: Develop a List of Participants
You might be tempted to invite a handful of your best customers to participate in the event so they can heap praises on you as their most valued supplier. While that might be good for your ego, it won’t be good for business.
The most effective Customer Advisory Councils include a close balance of three customer types: those who love you, those with an axe to grind over specific issues, and those falling somewhere in between.
Invite the highest level decision-makers that you want to influence. If you’re a supplier to the auto industry, it’s not realistic to think you’ll get the vice president of procurement for GM, Ford or Chrysler to attend, but you want to encourage participation from people with real decision-making authority. Ask your salespeople to list their most valued contact in each of their accounts. That person’s boss would be a good candidate for your advisory council.
Strive for no fewer than eight and no more than 15 participants. Larger groups can quickly become unwieldy and difficult to control; smaller groups won’t generate enough points of view to produce good discussion.
Step 2: Get Customer Participation
The first hurdle to overcome is getting customer decision-makers to participate. It can be humbling (and embarrassing) to realize that your firm does not have enough good contacts to fill the seats. (Don’t say, “That’s not a problem for me!” until you’ve tried.) Sadly—and paradoxically—distributors who decide against implementing a Council blame the lack of strong customer relationships as a reason. Unless yours is a very small firm, that is a head-in-the-sand outlook.
Your company likely provides many valuable services for customers beyond supplying them with product. One of the most valuable services you can offer is keeping them abreast of new ideas to improve their business. Most customers will appreciate an opportunity to learn how other businesses operate, particularly those in different industries.
If you want high-ranking customer executives to spend the better part of a day meeting with you, they need a valid reason why it’s worth their time. Before you send out invitations, develop a clear statement explaining how participation will benefit your customer. One of the biggest is the opportunity to network with executives from other companies that buy from you. Your council might be their only real opportunity to learn new ideas about supply chain management practices.
Another advantage participation offers is the opportunity to take a critical look at how your company and your customers do business together. Together, you can focus on the three or four activities that you do for them that they value most and discuss ways to improve in those areas. You’ll also likely identify new services that you can perform for customers.
After developing your list of people to invite, develop a one-page letter inviting their participation, then follow up with a phone call from your CEO or other high-ranking executive.
Step 3: The Meeting
Now that you’ve convinced customers to attend, what should you talk about? How long should the meeting last?
It’s best to hold the meeting at a neutral location, not in your conference room. If you meet at your home office, you run the risk of day-to-day business interruptions, plus it may inhibit an open flow of ideas from customers if they’re on your turf. The meeting should last one-half to three-quarters of a day, but be wary of tiring out participants. The most effective meetings begin with coffee and pastries at 7:30, officially kick off at 8:00 and have breaks every 60 to 90 minutes. Serve lunch at noon and promise to wrap things up by 2:00 or 3:00 p.m.
The agenda should begin with a discussion about your customers’ perception of your strengths, weaknesses, things you don’t do that you should and things you are doing that you shouldn’t. Subsequent meetings can be based on discussions and priorities identified in prior sessions.
Use a professional facilitator who will know how to coax comments from all participants and prevent any one individual from taking over the meeting. An outside facilitator won’t become defensive and offer excuses if customers raise concerns about the quality of your service. Also, consider inviting a guest speaker. Yet another perspective on a topic of general interest tends to enhance creativity and outside-the-box thinking.
As the host, you want to be visible but in the background. While it is, in fact, an all-day sales call, it must be an extremely soft sell with a long-term perspective. If you push-pitch-present too much, you defeat the whole purpose. Let the outsider ask the tough questions, challenge customer statements and lead the discussion. You concentrate on listening. Learn. Think. Plan.
Step 4: Follow Up
Now that you’ve held your successful gathering and everyone walked away in a jovial mood, what happens next? Should you start looking forward to your next event?
Within a week after the meeting, send a letter of thanks to each participant. Include a brief outline of pertinent points of discussion and how you plan to implement ideas that originated from the meeting.
While it is prudent not to promise action on all of the suggestions made during the meeting, it is essential that you take action on at least a few visible, substantive measures after each meeting. Given the depth of the discussions, many tend to be difficult and, at times, expensive. But given their source, they also tend to lead to significant and sustainable competitive advantage.
Always remember to get commitment for customer involvement with any advisory council-related projects. You’ll discover that customers are more than happy to work with you on these initiatives. After all, it was their idea, and they are the key beneficiaries.
No businessperson ever debates the necessity of staying close to customers. That is the only way to fully understand their current needs and to anticipate future requirements. Worst case, a well-run Customer Advisory Council will help grow revenue, protect against competitive threats and reinforce your reputation as a leader. Best case, it really can be a material handling distributor’s most effective sales and marketing tool.
|Meet the Author
Todd Youngblood is managing partner and CEO of The YPS Group Inc., located in Acworth, Georgia, and on the Web at www.ypsgroup.com.