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Wednesday, December 08, 2010

THE OVER-CAFFEINATED ENTREPRENEUR: Focus Groups vs. Customer Advisory Panels

The Over-Caffeinated Entrepreneur with David J. Dunworth

Ever run focus groups? Like what you encountered? A necessary evil and one that often improves the view from the customer’s perspective, but the focus group route is not the only course for gaining insights into what the customer is looking for, or how they feel about our product or service.

Focus Groups – These types of meetings are handled in many different formats. A company may want to find out the perceived quality comparison between their diet soda and the competition. So they set up blind taste research panels or a focus group of random consumers to rank products. Or a firm may get customers together to perform a “town hall” type of meeting to discuss what they like or don’t like about their own product or service. Then there are the focus groups or surveys that companies use to identify how the market place feels about the marketing and advertising styles incorporated in the company’s media affairs. The facilitation of these group meetings is not rocket science, but requires a trained facilitator and a team of market research analysts to make sense of all the collected data.

These focus groups are terrific if you have a large enough budget to run regional or national focus groups for your nation wide (or intended nation wide) market, but they take time, take planning and ongoing information gathering and deciphering to make the information useful. This type of investment into research and customer feedback is something that can easily be postponed if the market is soft, revenues are down or margin is less than goal. Because it is not ongoing but spot used, it can easily be something that “will have to wait until business picks up.” The champion of this type of market research is typically not the CEO, but someone lower down the ladder, and is always susceptible to pressure from above, or pressure from the P & L performance.

Customer Advisory Panels - This type of research requires the absolute dedication to success that only the CEO can bring to the program. Unless the CEO is directly involved, believes in the panel’s objectives and supports their findings, regardless of what they are, the panel’s life cycle will be short. This type of research project can be perpetual if the customer centric belief structure is top down and throughout. If the unwavering belief that the customer is absolutely paramount, and nothing but customer’s opinion counts is not woven throughout the organization, the program will be short lived.

Suggested Goals of a Customer Advisory Panel
  • Knowledge share from customer to company, not lecture or defense of company to customer.

  • Increase overall revenues for all divisions.

  • Improved margin through cost reduction strategies without lowering perceived value or quality.

  • Overall efficacy and improvement of customer centric business processes.

Suggested Format to create a Customer Advisory Panel

You can literally set it up any way that you feel is best suited to your organizational style, your budget and time commitments. Topics for discussion should be mailed out at least 30 days ahead of the meeting, with a reminder 10 days out. You will also want to do follow up every few days the same 10 day prior time period.

Meetings with customers should always be when they will be more apt to attend, and make the location desirable like a country club, hotel restaurant or nearby resort. Much like a Board Retreat, this meeting should be an evening and a next half day session. To ensure that there will be enough time committed to customer interaction, limit the number of team members to about a dozen or less, including the CEO, facilitator, Marketing and Sales, and Supply Chain, and director of R & D, three to six customers and whom ever else you feel will be able to gain from the interaction.

The evening of the meeting should start off with a cocktail hour, get to know you session; make sure to offer hors d’ oeuvre, followed by dinner. Pay attention to seating arrangements, so that there is good interaction with customer guests and corporate participants. The urge to “finish the work day” with your teammates must be controlled, and focus on the meeting at hand only. Don’t keep your guests out too late, because your breakfast meeting should start at a reasonable hour on time, so that the day doesn’t run too long. Remember, your customers are here to work, but they also have lives, so don’t take advantage of their goodwill.

The agenda shouldn’t be long, so stick to one or two topics because there will never be enough time to get all of the customer input within the allotted time.

Don’t get discouraged if your first few meetings fail to accomplish much; you are all in a learning curve. Practice makes perfect.

My Scar Tissue Tip: I sold this service to my clients regularly, but the failure on my part was that I “sold” the idea rather then have the CEO firmly believe in this approach. My first client involved in a CAP failed to show up for the dinner meeting because he didn’t think it was important enough for him to attend. After all, he had the director of marketing and his consultant (me) to handle the schmoozing. Big mistake.

If you as the CEO don’t firmly have it in your blood to be customer centric, don’t even waste your time and money on this type of market research.

You can learn more about other areas of entrepreneurship from reading my blog:

For more information, please visit David's TNNWC Bio.

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