PLH 81 | Executive Level Customer Advisory Board

In order to have sustained and continued innovation, have brand development, and growing your brand to be bigger, you’ve got to be aligned with what your customers think and what they want, and you’ve got to provide that continued service. If you can’t have that conversation with them and you don’t have a system for having that conversation, then you’re really not on a path for the right type of big brand growth that you’re looking for. Betsy Westhafer, entrepreneur and bestselling author of ProphetAbility, developed a system called Executive Level Customer Advisory Boards that help entrepreneurs get out in front of their customers by listening to them so that when their customers get there, they’re already there and they’re ready. It is also an opportunity to network with their peers and to interact with the leadership team of their key suppliers or partners.

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I have something very different for you because this is not early in the product launching process, this is towards the end and post for continued innovation. This is really an exciting and interesting topic and one of my favorite people on earth to talk to. I’ve got my friend, Betsy Westhafer, from The Congruity Group who is the coauthor of the Amazon bestseller and newly released ProphetAbility, which is an amazing book. She developed these things called Executive Level Customer Advisory Boards.

If you don’t know what that is then you don’t have a big enough brand yet. You should be thinking about this. You should be budgeting for this. In order to have sustained and continued innovation, brand development, growing your brand to be bigger, you’ve got to be aligned with what your customers think. You’ve got to be aligned with what they really want. You’ve got to provide that continued service. If you can’t have that conversation with them and you don’t have a system for having that conversation, then you’re really not on a path for the right type of big brand growth that you’re looking for. Betsy, welcome to the show.

Thank you so much. I am so excited to be here. Thank you.

I want you to really talk because you are an expert in this and you’ve been doing this for quite some time. I really want you to talk a little bit about what Executive Level Customer Advisory Boards are, but really about how you got into this as well?

I actually started in this business about ten years ago and worked for a firm that did just that, just Executive Level Customer Advisory Boards. It was a tremendous experience because I got to travel the world and just basically sit in board rooms and hear them talk about business models, marketing, innovation, validating their strategies and all these really high-level business topics. It was just a phenomenal experience specially to get to see it in different parts of the world. I left that company and went on to do several entrepreneurial things. The real story behind this, how I got back into this work is I had exited out of my previous company and was trying to figure out what my next move was and a friend of mine asked me what have I enjoyed most in my career. I didn’t even have to think. I love this work so much. I’ve started my own company, The Congruity Group, and that’s what we do. We work with these big tech companies mostly but not all of them are big tech companies. We help them really get out in front of their customers by listening to them so that when their customers get there, they’re already there and they’re ready.

I think it’s really an underserved area. We think we’re asking the right questions of our customers. We do these surveys and post-service satisfaction surveys, but we’re really not having that qualitative conversation to use. Laura Hazzard, our resident expert on market research on our platform and we talk a lot about quantitative and qualitative research, but when you are trying to figure out your future plan, the qualitative is really what’s important. You need to have the voice of the customer in there. Too often we take the voice of a customer from a little comment they made on a comment card. They’re in a rush, they are doing it for a reason, maybe you offered them a discount if they sent in their card. It’s not quite the same thing. What you’re doing is a much higher level, much more involved in terms of making your customers a part of your business.

One of the things we talked about in the book is how the CEO is the only one really tasked with looking three to five years out. The way to do that is talk with your customers who are also tasked with looking three to five years out. The conversations at a very high level, very strategic level and part of the value of bringing them together besides getting the customer insights is providing the ability for your customer decision makers to interact with one another. That’s actually noted as one of the number one reasons that people will take the time out to be part of the Customer Advisory Board is because of the opportunity to network with their peers and then also to interact with the leadership team of one of their key suppliers or partners.

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A lot of the companies you do this for are B2B in a way, so they aren’t necessarily B2C, which is business to consumer. They might be serving IT professionals or CMOs at companies. That’s what they’re really talking about is you’re bringing together their key customers that might be big companies in and of themselves together so this makes a lot of sense. Here on Product Launch Hazzards, we have a lot of business to consumer. I’d love for you to talk about what an executive level customer advisory board looks like. Is there a way for them to do something similar on a smaller scale?

We have clients too that are B2B2C, which is a really interesting dynamic. We have those clients and so it’s really full spectrum from the customer experience to the B2B relationship that all gets covered in these meetings.

That happens all the time here because when you’re selling into mass market retail for instance, you’re selling to a buyer. That’s the business to business side of it and it really is the consumer. The interesting part is when you have these multilevel sales decisions made, it’s even more critical to understand everybody’s needs.

What our organization does is focuses on that B2B relationship but there are also opportunities to include that B2C data. One of our clients has a lot of focus on their net promoter scores where the question is simply, “Would you recommend us to a friend?” There are lots of different data points that you can get from customers and so it’s all important. It’s all very important down to the little voice of the customer, “Here’s a $5 Starbucks card.” That’s all very important data to get, but it all rolls up to the decision-makers ultimately. The piece of that pie that we focus on is the direct decision maker to decision maker conversations in the three to five-year out conversations.

PLH 81 | Executive Level Customer Advisory Board

Executive Level Customer Advisory Board: There are lots of different data points that you can get from customers.

This is a thing when you don’t know what’s going on at your customers’ companies or in your consumer’s homes. You don’t know how their life is changing. You don’t know how their business is changing. You don’t know where they’re moving in three to five years. Are you imagining that? You think you’re an expert in that, but they have a whole different plan and they may be shifting on you and the industry may be shifting and you have no idea. Getting to be involved in that conversation makes them not only be bigger fans of you currently because you’re investing in them and what they think and how they see the future, but you’re also along the lines going to help them facilitate their plan. That’s exciting for them.

We do a lot of sessions with co-innovation. During this time of just inevitable disruption, it’s really great to be able to co-innovate what’s going to happen in the future with the people who are going to pay for those products and services that you’re offering. We really love those innovation sessions where it’s blue sky, it’s brainstorming, it’s trying to really not be a victim of disruption but be a champion of it. In terms of innovation, it’s so exciting and sometimes we do stuff like rolling out white sheets of paper and giving them crayons and craft paper and craft stuff.

Roll out what it might look like from beginning to end for an advisory board. What does it look like?

We really call it an initiative, it’s not a one-off event. I tell people that if you’re only going to do this once or twice, you’re better off not doing it at all because you’re inviting people that are key decision makers into your world and valuing their input. If you just have them come once or twice then say, “Thanks, we got what we needed.” That’s more damaging than if you don’t do it at all. I recommend people have at least a one-year horizon. I really prefer a three-year horizon, at least three years of doing this so that it’s a consistent strategic initiative of the company rather than just an event.

We usually have between ten and twelve people on the board and we have a complete methodology on how we recruit them. We look at lots of different things to make sure that we get the right balance on the board, the right personalities. We don’t want all raving fans because you’re not going to get the insights you need or the straight talk that you need but we don’t want all detractors either. We look at how long they’ve been a customer, how much annual spend, if they’re introverts, if they’re extroverts because you just want to get this really balanced board.

That’s a science in and of itself, which is the reason people hire you to do that because you have that dialed in.

There’s a lot to the recruiting. We plan a really robust agenda that incorporates the networking time, which is valuable for building the relationships. We schedule these sessions to make sure that the whole meeting flows, but then we get really deep into all the details of the session so that we know exactly what’s going to happen. We don’t know exactly what’s going to be heard, but we know exactly how the meeting’s going to go and how each session is going to go and how each session is going to go. That’s where we can get into the creativity of each session. We want to get them up moving around. We want it to be fun and engaging. The rule of thumb is that the company who was hosting the advisory board listens 80% and speaks 20%.

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It’s not a, “Here’s all about our brand. It’s all about us.”

It’s not a sales event. It’s not a death by PowerPoint. It’s really a dialogue that is 80% of the time the customers are speaking. We create this agenda in these sessions and we facilitate it. I really recommend offsite, not in the host company’s building so that they can visibly show this is so important that we’re taking a couple of days out of the office to have this conversation because otherwise they’ll get sucked into phone calls and meetings and distractions.

Probably go to a nice place where it’s an enjoyable experience, have the meeting, do a lot of reporting afterward. Part of what we do is make sure that the action items are captured and we keep in touch with our clients in between the meetings so that we can say, “How are you doing on these things because when we go back in six months and meet with this board again, we need to say to them, here’s what we heard, here’s what we’re working on, here’s what we’ve put off until Q1 of next year. Just to show that, yes, your feedback is valuable and we’ve taken it to heart and we’ve worked on it and here’s where we are on these things that we talked about?” The communication back to the board is a huge piece of the success of this initiative.

They need to feel that their input was valued and useful and in order to stay a part of it and also to really be free to give them advice or give the information that they’re sharing out there. They’ve got to feel that it’s a value or it’s not worth their time. That’s so interesting. Let’s think about this in terms of let’s say I’ve got a multimillion-dollar brand, a product, a consumer brand and I really want to expand into much more innovative and grow my market and add all of that. Is there a way for them to do something similar to it, but more on a consumer basis?

What’s fun about this is there’s no rule book. You can be as creative as you want to be. If you want to bring a group of customers together and say, “We’re going to keep this group together for two years, can you commit to that?”

We might meet twice a year, have two virtual meetings in between.

Maybe they get treated to a nice place for a couple days in a nice hotel and then basically the same idea where you just create this agenda and its higher level than feature function. It’s not really a focus group. I know, Tracy, you’ve written articles about focus groups.

I believe in focus groups before you have your product finished. That’s what this is as you called it feature function. What should it be? What should we be designing to? Where are the needs? Let’s understand the opportunities. That to me is ideal. If your focus-grouping after the fact, that’s not useful.

What you can do after the fact is say, “What’s next?”

“Did we achieve the goals and if not, what’s next?” I agree with that.

Talking to the users of your product and saying, “You’re one of our customers. You obviously liked what we do. Help us figure out what to do next and help us figure out what you might want to see in the future.” Get into their brains and figure out, “This is great right now, but if you stop right now, you’re going to be done for.” If you keep constantly looking out and you bring those people along with you and you treat them as your advisors, that is going to open up so many more possibilities than if you just try to be, “I think this is what they might want.” I always tell people whenever I’m having conversations, the thing I like best about what I do is I know that when I walk into that boardroom, by the time we walked back out, my client is going to have at least one major a-ha moment that can be game-changing for the company. It happens every single time and that’s where I get my juice is, “I know that we’re going to come out of here with something really cool.” It can happen in B2C as well. It’s just a different dynamic a little bit because they’re not decision-makers in another company, but it’s the same idea of picking their brains to figure out the future.

PLH 81 | Executive Level Customer Advisory Board

Executive Level Customer Advisory Board: Talk to the users of your product. Treat them as your advisors.

I think that this is ideal for the kinds of companies that I’m going to call them a lifestyle brand focus. In other words, if you were doing all survivalist products or all products that are very focused around making moms of toddler’s life easier, it just makes it a little easier if you’ve got that really focused. It happens. My mind’s already grown out of being a toddler and we forget what it’s like. We’ve moved on even though we may have started our brand or started our business in that world, we may not realize that there are new problems for toddler moms. If I had my oldest daughter, she’s 23. You’ve met Alexandra before and Alexandra is great that she’s there. If I was developing a whole company around grade school branded products or services to those kinds of level, mine’s all older now. I may not really realize the power of what’s going on in the digital world and what’s changed for them.

When you invent a brand and it takes you many years to get it to market, you’ve now moved out of that when it was your core demographic and you understand it before, you shifted into a new world, you may not understand the needs of your consumer today. They change. You need to ask those questions and you need to be involved with them in order to really figure out where you’re going to grow the line, where you’re going to grow your brand, how you’re going to keep servicing them and keep them fans.

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Things are just changing so fast. It’s daunting how fast things are moving. I have a funny story. This was years ago when I was doing boards before. We were doing a CIO advisory panel for a very well-known IT company and one of the people there was the CIO of Blockbuster. Think about if Blockbuster had an advisory board and they could see the landscape of how it was changing, but they just didn’t. They just didn’t see it.

I think I heard that there’s one left in the country. I think it’s in Alaska.

I was going to say I thought it was in Canada.

I think it’s in Alaska. The Canadian one just closed. I just heard that. There were three left so I think in Alaska, it’s the last one. They didn’t really understand it and that’s because we do get in a tunnel when we’re in our own business. We think we’re experts in the industry but we’re really not seeing those things that are on the forefront that our customers are having problems or they’re trying to solve them and they aren’t thinking to ask you to solve them for them. They’re out there looking for alternative solutions and they’re moving on without you.

Competitors are trying to figure it out too.

They’re trying to find that gap. It’s like slide right in and get your business. This is really an important thing. I want to touch on something that we push really hard here. Laura Hazzard is such an expert in that, we lead too much when we lead our own groups, when we run these. That’s one of the reasons why hiring your company makes such sense for people to build that board dynamic you were talking about because you have a formula for getting that mixed right so that it provides the best results. Also, so that it doesn’t become a sales pitch as you put it. It’s like if we lead it, we lead the answers and having an independent lead makes a big difference.

The facilitation by a third party is really crucial because it’s nobody’s fault. It’s just a natural bias to ask questions the way you want to receive the answers. That’s one of the really key components is the third party facilitation and that’s not just during the time of the meeting. Then the recording after the meeting is over and we draw these reports and we capture the action items and we capture the key takeaway, that can’t be done by somebody that’s too close.

You can slice the data any which way.

“What do the numbers say?” “What do you want the numbers to say?” It is really important to be able to do this objectively. We just had a meeting with a client and I actually congratulated them for being so open and vulnerable to hearing what they might not want to hear because that’s the true beauty of this is being open enough to say, “Customers, we’re not sure we’re getting this right, but we trust you enough to tell you that and to have you help us get it right.” They’re really good about that.

I think that’s to be commended because not everybody is willing to put themselves out there in front of their customers and they see it as risky like, “These are our best customers, what if they don’t like what we say?” It’s just really important to have that transparency and say this is a very small trusted group of people that will help us get better and help us get where we want to go and help us get where they want to go. It’s really important to go into it with the idea that it might not be everything you want to hear. It might be some pain for you but that’s where the incremental value is because then you know that and you can move forward.

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That’s my favorite time to come into a company when they have a lot of data. I love it when they have lots of data, lots of feedback, lots of disinformation because I love to come in and see the opportunity that they don’t see. Where could their products be different? Where is the innovation going on around the world that they may not know about, that they could tap into?

That possibility for innovation is there when you have more information and they sometimes can’t see it because they are in their firefights, in their blinders but it’s my favorite time to come into a company when they’ve gathered all of that and go, “I see the easy pass and the easy innovations for you for now and I see the future one that is going to be really hard to pull off, but if you pull it off, you’re going to make these people so happy they’re not going to stop doing business with you.” That is my favorite thing to do. I love what you’re doing there because if you’re really in that place of being able to provide opportunity, you’ll see it.

I think it’s common in every area of business where you get so close to it like forest through the trees thing. It happened with me. I was reviewing a proposal and I read it ten times before we send it out and I had somebody check it right before. I had another set of eyes on it, a fresh set of eyes and they’re like, “You might want to look at this.” I’m like, “I read that ten times. How did I miss that?” It happens in every aspect of business and it is just human nature.

We complete the circle. That’s really what happens is our brain is already completing the circle. Of course, they understand this and they get it.

You close to see it. That’s one of the values that I really enjoy bringing to our clients is the fact that we don’t know their business the way they do. We try to learn their business and we try to really understand what we’re talking about during these meetings, but we can poke holes and ask questions and view it from a safe distance and get their wheels spinning about things like, “We just all know that but I can see where that would be confusing or whatever.” There are just a whole lot of different types of benefits to doing this initiative.

PLH 81 | Executive Level Customer Advisory Board

ProphetAbility: The Revealing Story of Why Companies Succeed, Fail and Bounce Back

I want to touch on your book because I really enjoyed getting the pre-read to it. I felt I was so lucky to get the early read on it. What I found fascinating about it and it’s called ProphetAbility. It’s an interesting thing to be thinking about that we have profits within our own companies, within our own brands who are seeing that far out there thing that we may not be doing.

We see this happen across many big companies where the person who sees the innovation gets frustrated internally, leaves, starts a competing business and the next thing you know they’ve eclipsed you and you’re out of business. This happens again and again because we don’t also have a system for listening to those people who happen to be tapped in and hear it. You’ve got great stories in the book. Would you highlight one that you particularly loved that really shows that?

This is in the beginning of the book about IBM and this was many years ago, but they brought in a new CEO who was not just another C-suite guy from another company. He was a disgruntled customer when he came into IBM. He was getting ready to speak to a big group of customers and he had this prepared speech. His name is Louis Gerstner, had this prepared speech and he chucked it and just said, “I’m going to talk to you. I understand you because I was there, I was a customer, I had frustrations in and I’m here to tell you that that’s going to change now moving forward. We are going to be 100% about the customer. We’re going to listen to the customer. We’re going to have systems in place to listen to the customers.”

He started something called Operation Bear Hug. That’s where he sent all of his senior leaders out to go meet face-to-face with customers. I can’t remember the specifics, I think they were all required to meet with at least five customers and were like 1,500 of these leaders. You think about how many people are going to be touched by these face-to-face meetings. It’s not capped at five, it’s required for five, but you knock yourselves out, you do as many of these as you can do. It totally transformed the company and it changed from the idea that working at IBM was a lifetime commitment. We are here to serve our customers and if you’re not serving your customers, you’re not part of this culture and therefore not part of our organization. It was just a really interesting that they hired someone like that. I give them credit for hiring a disgruntled customer to come lead the company and he did remarkable things with it.

There are so many stories like that throughout the book that I think what was fascinating to me the most is that you’re talking about a concept of how do you hear these people and who finds them and who does it. It’s an internal and an external conversation. I also do think that your model of how you’re working is required within your company to have an open listening policy. Do you find that in your customer advisory boards that the companies that involve different levels or different departments do better?

It’s really interesting because it depends on the size of the company. We’ve got one client that they only have two executives that are going to actually be in the room and they actually asked us to do a session without them in the room to get real, raw feedback. We’re going to be facilitating one session where we’re just talking to them and the customers can say whatever they want it. We’ll capture it in general detail but not per person. We’ve got another client that the team that’s working on the advisory board, they have a team that has been put together to develop the content for the agenda and then they have their executive leadership teams. We have about a total of maybe twenty people working to build this initiative out.

They feel really invested in it throughout the organization.

Even the board that came together, the Editorial Board, that board that has come together for the content of the meeting is also talking to their teams even a couple of levels lower to say, “What is it you want to know from the customers?” They’re really doing it from a very inclusive perspective rather than it just being, “This is what the CEO wants to know.” Different companies do it different ways and it’s all good. It has to fit their style and their size and their outlook and personalities. You hit on something earlier about having a system of listening and that’s what’s really key is having this consistent way of listening to the customers.

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Not just doing it willy-nilly or here and there, “We haven’t done that for six months. We probably should.” We get these meetings on the calendar and we start developing the boards and the agendas at least four months out from the meeting. There’s a lot of work that goes into it and then we get the next meeting on the calendar so that the board members know, “This is when the next one’s going to meet,” and then like you said, we’d we do calls in between. Having that commitment to putting them on the calendar and being very well prepared for these meetings helps build that system of listening to the customer.

Betsy, I want to end on that but I do want to ask a general question for our audience out there to understand. What size a company do you think that the investment that it’s going to take into because this is a six-figure investment if you’re doing it over the course of a year and doing all of that? Getting into that mindset of in a $100 million company, $10 million company, when do you think that line is where the difference in being able to grow faster could also be a factor for them that the investment’s worth it?

I would say starting point is probably about $5 million and we’ve got a client that is just doing things locally, not doing like the grand resort and all that stuff, but we have those clients too so we can do it in a way that doesn’t break the bank and still is just as impactful. It’s really about the conversation. The extra frills are nice and it’s important to provide a good experience, but you don’t have to go all out to do that. Starting at about $5 million you can bring people together. Here’s another key point, Advisory Board Members are not paid to come to these meetings. They are there because they want to help your company but having said that, they want to know that their time is well-spent, that they’re going to have a good experience, that they’re going to have a chance to network with their peers, so you need to do the dinners and that thing.

PLH 81 | Executive Level Customer Advisory Board

Executive Level Customer Advisory Board: Advisory Board Members are not paid to come to these meetings. They are there because they want to help your company.

You’ve taken care of them in terms of their expenses and stuff like that so they’re not out of pocket.

There’s that expense. Some Boards of Directors where they get paid a really nice fee to be on the board, you don’t have that expense. There are different ways to manage that cost and then of course doing a couple of calls in between. Other than time, there’s no real expense to that. If they’re about $5 million, there’s something that can be done there and then of course going out.

I’m glad you gave that little context for them so that they can really understand where they are in the scope of things. I think that in the meantime they could certainly pick up your book ProphetAbility. Of course you can find it on Amazon. The stories in there really do open up that mindset of listening, becoming a critical part of the process and being able to tap into innovation and future changes and all of those things. Tony Bodoh, your co-author, is one of my favorite people to listen to you and he’s brilliant in that customer service model of what it means when you start listening. He advises large hotel chains and all of those things and changes the organization and it has a direct benefit on sales, when listening happens.

He’s just a brilliant person when it comes to all of this and the context he provided in the book, I was learning so much as we are writing this book, I was learning from Tony and then when we found these stories and I really started digging in to them and so many of them relate to innovation. There’s a story about GM and how right before the book released, there was an article that came out saying they were out innovating Tesla and so there’s just a whole lot of focus on innovation.

We don’t have to hear that in the news so you have to read the book to get that story. It is so true. This is because it’s unimportant to them. It’s this about their listening or working with their base. They know that it’s happening and it’s not important to be promoting it because that’s not what it’s about. It’s this grassroots innovation that’s going on because they’re tapped in. You’ve got a great program here, Betsy, and I’m so thrilled you came to share it with us here.

Thank you. I appreciate the opportunity.

Product launchers, you can reach out to Betsy. You can connect to her book and feel free to ask questions in the future. I’ll be happy to forward them over to her and especially if there are some questions about how things work and how they happen. If it would be a benefit to the whole community, please ask them. I can always have Betsy record a little Facebook Live for us or something like that.

Whatever you need, I’m here to help

Thank you so much, Betsy. We appreciate it. This is Tracy for Product Launch Hazzards.

Tune in to Betsy Westhafer’s next Office Hours. Connect with and find out more about Betsy in our Experts Directory.

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About Betsy Westhafer

PLH 81 | Executive Level Customer Advisory BoardBetsy loves business! Throughout her career, Betsy has had the privilege of observing business at the highest levels while delivering executive-level Customer Advisory Boards for companies including Dell, LexisNexis, Springer, VeriSign and other large tech companies in the US, the Middle East, Europe and Latin America.
As an entrepreneur, she understands the joys and challenges of growing a business and ensuring that the customers are served at levels that blow past expectations. What Betsy loves most about her work is knowing that every single time a group of executives gather in a boardroom for a Customer Advisory Board, there will be an aha moment for her clients that results big new opportunities. Every single time.
Betsy is also the author of the #1 Best Seller, “ProphetAbility – The revealing story of why companies succeed, fail, or bounce back.”