Guiding Brand Growth With An Executive Level Customer Advisory Board with Betsy Westhafer

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts Tracy and Tom Hazzard. Get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey product launchers, welcome to product Launch hazard and I have something very different for you today because this is not early in the product launching process. This is sort of towards the end and post for continued innov. So 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 Westhaver from the Congruity Group, who is the co author of the Amazon bestseller and newly released Profitability, which is an amazing book, so you guys should pick it up. I loved it. And she develops these things called executive level customer advisory boards. And if you don't know what that is and you don't have a big enough brand yet, which you should be thinking about this and you should be budgeting for this, because in order to have sustained and continued innovation, brand development, growing your brand to be bigger and bigger, you 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. And 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. So Betsy, welcome to the show.

Thank you so much. I'm so excited to be here. Tracy, thank you.

So 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.

Yeah, I actually started in this business about 10 years ago and worked for a firm that did just that, just executive level customer advisory boards. And it was a tremendous experience because I got to travel the world and just basically sit in boardrooms and hear them talk about business models and marketing and innovation and validating their strategies and all these really high level business topics. And it was just a phenomenal experience, especially to get to see it in different parts of the world. I left that company and went on to do several entrepreneurial things. And 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. And I didn't even have to think. I love this work so much. So now I've started my own company, the Congrudi Group. And that's what we do. We work with these big tech companies mostly, but not all of them are big tech companies. And 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 underserved area. Right. Because we think we're asking the right questions of our customers. We do these surveys and like post service satisfaction surveys, but we're really not having that qualitative conversation to use. Lara Hazard, our resident expert on market research on our platform. And we talk a lot about quantitative and qualitative research. And when you're 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. And too often we take the voice of a customer from a little comment they made on a comment card. And that's really not. They're in a rush. They're doing it for a reason. Maybe you offer them them a discount if they sent in their card. Like it's not quite the same thing. And what you're doing is a much higher level, much more involved in terms of making your customers a part of your business.

Exactly. And 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. And so the way to do that is talk with your customers who are also tasked with looking three to five years out. So the conversation's 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. And that's actually noted as one of the number one reasons that people will take the time out to be part of a 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.

So a lot of the companies you do this for are, I'm going to call them a B2B in a way. So they aren't necessarily B2C which is business to consumer. So they're business to business. So they might be serving IT professionals or CMOs at companies, things like that. So that's what they're really talking about is you're bringing together their key customers that are might be big companies in and of themselves together. So this makes a lot of sense. But here on product launch hazards we have a lot of business to consumer. So are there ways to do to structure And I would 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?

Absolutely. And we have clients Too that are B2, B2C which is a really interesting dynamic. We have those clients and so it's really kind of full spectrum from the customer experience to the B2B relationship that all gets covered in these meetings.

Well that happens all the time here because when you're selling into mass market retail, for instance, you're selling to a buyer. So that's the business to business side of it. And then it really is the consumer. And the interesting part is when you have these multi leveled sales decisions made, like it's even more critical to understand everybody's needs.

Exactly, exactly. So what our organization does is focuses on that B2B relationship. But then there's also opportunities to include that B2C kind of data like you talked about. One of our clients has a lot of focus on their NPS scores.

What's that?

I'm sorry, Net promoter scores where the question is simply would you recommend us to a friend? And so getting that data, 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 kind of rolls up to the decision makers ult. And so the piece of that pie that we focus on is the direct decision maker to decision maker conversation and the three to five year out conversations.

Right. Because you know, this is the thing, we don't know what's going on at your customers, companies or in your consumers homes. Right. You don't know how their life's changing, you don't know how their business is changing. You don't know where they're moving themselves in three to five years. How are you going to be? Are you imagining that? Like it's like 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. So 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 sort of along the lines going to help them facilitate their plan.

Yes.

So that's exciting for them.

Right. And we do a lot of sessions with co innovation and 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. So we really love those innovation sessions where it's blue sky, it's brainstorming, it's really not be a victim of disruption, but be a champion of it. So in terms of innovation, it's so exciting and sometimes rolling out white sheets of paper and giving them crayons and craft paper and craft stuff.

So dial that back because I want to roll out what might look like from beginning to end for an advisory board. What does it look like?

So we really call it an initiative. It's not a one off event. And 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. And if you just have them come once or twice, then say, okay, thanks, we got what we needed. That's more damaging than if you don't do it at all. And so yeah, so we really look at it. I recommend people have at least a one year horizon, but 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. And so we usually have between 10 and 12 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. And 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.

Wow, that's a science in and of itself. Which is the reason people hire you to do that, because you have that dialed in.

Yeah, there's a lot to the recruiting. And then 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 is going to go and how each session is going to go. So that's where we can get into the creativity of each session. And we want to get them up, moving around. We want it to be fun and engaging. And the rule of thumb is the company who is hosting the advisory board listens to 80% and speaks 20%.

So it's not a here's all about our brand, it's all about us.

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. It's usually, I really recommend off site, not in the host company's building, so that they can show, 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.

Oh, yeah, been there.

Go to a nice place where it's an enjoyable experience, have the meeting, do a lot of reporting afterwards. And then 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, okay, 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. Here's what we're working on, here's what we've put off till 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. So the communication back to the board is a huge piece of the success of this initiative because they want to feel that they're.

They need to feel that their input was valued and useful and in order to stay a part of it and also to really free to give the 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. So that's so Interesting. So 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?

Sure, sure. And what's fun about this is there's no rulebook. You can be as creative as you want to be. So if you want to bring a group of customers together and say, you know what, we're going to keep this group together for two years, can you commit to that?

And we might meet twice a year, have two virtual meetings in between, you know, that kind of thing.

Yeah. And 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 it's, it's higher level than feature function. It's not really a focus group. And I know, Tracy, you've written articles about focus groups and.

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

But what you can do after the fact is say what's next? And you're somebody.

Yeah, did we achieve the goals? And if not, what's next? Right. And yeah, I agree with that.

And then talking to the users of your product and saying, okay, you're one of our customers, you obviously like 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 and really get into their brains and figure out, okay, this is great right now, but if you stop it right now, you're going to be done for. But 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 just try to. Well, 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 walk back out, my client is going to have at least one major aha moment that can be game changing for the company. It happens every single time. And that's where I get my juice is just like, wow, I know that we're going to come out of here with something really cool and it can happen in B2C as well. And 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. Yeah.

I think that this is ideal for the kind of companies that are, I'm going to call them a lifestyle brand focus. So in other words, if you're doing all survivalist products or all products that are very focused around making moms of toddlers life easier, like it just makes it a little easier if you've got that kind of like really focus. Because now you need to. It happens. Like mine's already grown out of being a toddler. Right. And we forget what it's like. So 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. Like if I had my oldest daughter, she's 23. Right. So you've met Alexandra before and Ale, it's great that she's there. But if I was developing a whole company around grade school brand products or services to those kind of level, mine's all older now. I may not really realize like the power of what's going on in the digital world and what's changed for them. And so when you invent a brand and it takes you many, many years to get it to market, you've now moved out of that when it was your core demographic and you understood it before you shifted onto into a new world. You may not understand the needs of your consumer today. They change and you need to ask those questions and you need to be involved with 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 make them and keep them fans. Right, Right.

And things are just changing so fast. I mean, 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, very well known IT company. And one of the people there was the CIO of Blockbuster. So think about that. Think about if Blockbuster had 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.

And no, I Think I heard that there's like one left in the country.

I think it's in Alaska. I was going to say. I was going to say I thought it was in Canada, but.

But I think it's in Alaska. Maybe the Canadian ones just closed. I just heard that there was like three left. So I think Alaska, those last one. But I mean, crazy, like. Yeah, exactly. That they didn't really understand. And that's because we do get tunnel when we're in our own business and 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 for. They're trying to solve them and they aren't thinking to ask you to solve them for them. So they're out there looking for alternative solutions and they're moving on without you.

Because they're trying to figure it out, too.

They're trying to find that gap. Right. And like slide right in and get your business. So, yeah, I mean, this is really an important thing. So I want to touch on something. It's something that we push really hard here because Lara Hazard is such an expertise that we lead too much when we lead our own groups, when we run these. And that's one of the reasons why hiring your company makes such sense for people to both that board dynamic you were talking about, because you have a formula for getting that mix right so that it provides the best results, but 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.

Yeah, the facilitation by a third party is really, really crucial because. And it's nobody's fault. It's just a natural bias to ask questions the way you want to receive the answers. And so that's one of the really key components is the third party facilitation. And that's not just during the time of the meeting, but then the reporting after the meeting is over. And we draw up these reports and we capture the action items and we capture key takeaways. And that can't be done by somebody that's too close because they may say.

Because you can slice the data any which way.

Exactly. What do the numbers say? What do you want the numbers to say?

Yeah.

So it is really important to be able to do this objectively. We just had a meeting this morning 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 these, is being open enough to say, hey, customers, we're not sure we're getting this right, but we trust you enough to. To tell you that and to have you help us get it right. And they're really, really good about that. And 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, oh, wait, these are our best customers. What if they don't like what we say? And 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. So 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, is. Because then you know that and you can move forward.

So that's my favorite time to come into a company when they have a lot of data. So I love it when they have lots of data, lots of feedback, lots of this information, because I love to come in and see the opportunity that they don't see. Where could their products be different? Where's the innovation going on around the world that they may not know about that they could tap into? Like, where's that possibility for innovation is there when you have more information and they sometimes can't see it because they're in their firefights and their blinders and everything. But it's my favorite time to come into a company when they've gathered all of that and go, oh, 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. But that is my favorite thing to do. So 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.

Yeah. And I think it's just common in every area of business where you get so close to it that you'd, like, force through the trees kind of thing. And it happened with me the other day. I was reviewing a proposal, and I read it like 10 times before we sent it out. And then I had somebody check it right before I had another set of eyes on it, fresh set of eyes and they're like, you might want to look at this. Like, oh my gosh, I read that 10 times. How did I miss that? But it happens in every aspect of business and it's just human nature. But that's why it's we complete the circle.

That's really what happens is our brain is already completing the circle. Of course they understand this, of course.

They get it, but they don't get too close to see it. So 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 kind of view it from a safe distance and get their wheels spinning about things like, oh wow, we just all know that. But I can see where that would be confusing or whatever. So there's just a whole lot of different types of benefits to doing this kind of initiative.

I love it. So I want to touch on your book because I really enjoyed getting the pre read to it. Like I felt so lucky to get the early read on it. What I found fascinating about it, and it's called profitability, not like P R O F I T. It's like P R O P H E T. And so it's really an interesting thing to be thinking about that we have Prof. Within our own companies, within our own brands who are seeing that far out there thing that we may not be doing. And this is where we see this happen across many, many, 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 eclipsed you and you're out of business. Like 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 love that really shows that.

Yeah, I really like the story. And this is in the beginning of the book about IBM and this was many, 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 and he was getting ready to speak to a big group of customers and he had this prepared speech. His name's Lou Gerstner had this prepared speech and he chucked it and just said, I'm going to talk to You, I understand you guys because I was there, I was a customer and I had frustrations. 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 and we're going to listen to the customer. We're going to have systems in place to listen to the customers. So he started something called Operation Bear Hub. And that's where he sent all of his senior leaders out to go meet face to face with customers. And they had, I can't remember the specifics, I think they were all required to meet with at least five customers and there were like 1500 of these leaders. So you think about how many people are going to be touched by these face to face meetings. And he said, and by the way, 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. And it totally transformed the company. And it changed from the idea that working at IBM was a lifetime commitment because they just didn't can anybody back in the day to no, 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. So it's just a really, really interesting that they hired someone like that. I give him credit for hiring a disgruntled customer to come lead the company. And he did remarkable things with it.

Yeah, I think there's so many stories like that in, 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 doesn't. And that's really, it's an internal and an external conversation. So I also do think that your model of how you're working is required within your company to have an open listening policy. And do you find that in your customer advisory boards that the companies that involve different levels or different departments do better?

Yeah, it's really interesting because it kind of depends on the size of the company. We've got one client, 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. So we're going to be facilitating one session where we're just talking to them and the customers can say whatever they want. We'll capture it in general detail, but not per person. And then we've got another client that they have, 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 team. So we have about, I think a total of maybe 20 people working to build this initiative out. So it just kind of.

So they feel really invested in it throughout the organization. That's crazy.

And even the board that came together, it's called an editorial board, that board that has come together for the content of the meeting is also talking to their teams, even a couple teams or a couple levels lower, to say, what is it you want to know from the customer? So they're really doing it from a very inclusive kind of perspective rather than it just being, okay, this is what the CEO wants to know. So 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. But there are lots of ways. But 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. Not just doing it willy nilly or here and there. Oh yeah, we haven't done that for six months. We probably should those kinds of things. But. But we get these meetings on the calendar and we start developing the boards and the agendas at least four months out from the meeting. So 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, okay, this is when the next one's going to meet. And then we, like you said, we do calls in between. So 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.

Yeah. So wow, Betsy, I want to end on that, but I do want to ask a sort of a general question for the listeners out there too. Understand? So what size of 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. So getting into that mindset of when do you think like $100 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.

Yeah, I would say starting point is probably about 5 million. And we've got a client that is just doing things locally on a smaller. Not doing like the Grand Res and all that kind of 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 because 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. So I think really Starting at about $5 million, I think you can bring people together because 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 kind of thing, taking care.

Of them in terms of their expenses and stuff like that. So they're not out of pocket. But.

Right. So there's that expense. But in terms of like some boards of directors where they get paid a really nice fee to be on the board, you don't have that expense. So there's different ways to manage that cost. And then, of course, doing a couple of calls in between, there's really. Other than time, there's no real expense to that. So, yeah, I think if they're about 5 million, there's something that can be done there. And then, of course, going up bigger. Yeah.

So wonderful. I'm glad you gave that a little context for them so that they can really understand where they are in the scope of things. But I think that in the meantime, they could certainly pick up your book Profitability. So I'm going to put a link in the blog post and everything there. Of course, you can find it on Amazon, but. But just in case you can't, the link's there. So you can't remember its title because the stories in there really do open up that mindset of listening becoming critical part of the process and being able to tap into innovation and future changes and all of those things. And Tony Botto, your co author, is one of my favorite people to listen.

To you and me.

Yeah. And he's brilliant in that customer service model of what it means when you start listening him. He advises large hotel chains and all of those things and changes the organization. And it has a direct, direct benefit on sales when listening happens.

Yeah, 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 were writing this book, I was learning from Tony. And then when we Found these stories and I really started digging into 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 hear that in the news.

So you have to read the book to get that story. But yeah, exactly. It is so true. And this is because you know what? It's unimportant to them. It's this about. They're listening, they're working with their base, they know that it's happening and it's not important to be promoing it because that's not what it's about. Right. It's this grassroots innovation that's going on because they're tapped in. And I love that. So you've got a great program here, Betsy, and I'm so thrilled you came to share it with us here.

Appreciate the opportunity.

So, product launchers, you can reach out to Betsy. All our information will be is in a profile that we've set up on Product Launch Hazards so you can connect to her directly. You can also connect to her book and feel free to ask questions in the future, I'll be happy to forward them over to her, especially if there's some questions about how things work and how they happen. If it would be a benefit to the whole community, please ask them. So I can always have Betsy record a little Facebook Live for us or something like that.

Whatever you need, whatever you need, I'm here to help.

Well, thank you so much, Betsy. We appreciate it. Everyone, this is Tracy for Product Launch Hazards.

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