In the early 1980s, I bought a multi-location, contractor-supply distributor. The employees were panicked about a new owner from outside the industry. But — thanks to Customer Advisory Boards (CABs) — we all won big.
First, I did a customer-profitability ranking report. Sorted best customers into segments. Ranked the segments by net-profits. Then, visited five of the most-progressive and ambitious customers in our best segment. Together, we redefined “service excellence” by eight metrics. My employees were stoked to achieve perfect service. We proceeded to dominate one target-niche after another. We stole only the most, net-profitable (and growing) customers from our unfocused competitors.
On-going CAB value
I created a CAB for each branch. We met at least two times per year. No branch was allowed to do anything new that “the customers will love” without confirming the value vs. cost opinions of our advisors. With our CABs, we continued to innovate together. Our overall objectives were:
- To solve new-friction or supply problems with improved inventory tunings, service systems and/or metrics;
- To boost customers’ uptime-productivity by pursuing perfect, fill-rates on-site/at-hand due to semi-customized, replenishment systems;
- To lower their total-procurement costs AND our total costs-to-serve. To move down our related cost-curves together on a win-win basis; and
- Pursuing objectives 1-3 put us on a path towards co-creating a sole-supply relationship that was integrated, automated and digitally enhanced.
We created our CABs and then they recreated us. Our service-value — strategy, model, systems, metrics and culture — all shifted brilliantly.
Let CABs guide your digital transformation
Huge changes to solve have occurred over the past 15 months.
- Zoomification up and physical meetings down;
- More remote work;
- Millennials (digital natives) taking over B2B buying posts;
- Rising digital-buying experiences and expectations; and
- Increased avoidance of regular-rep calls.
“Digital transformation” is a vague abstraction. Make it concrete and invent what your most, net-profitable customers want. Big changes normally spark big resistance from employees. But, who can say “no” to key customers’ specific requests?
Create your CABs to recreate your company. Then, clobber competitors who either won’t change or who try to be all digital things to all types of customers which is too expensive, unfocused and less inspiring.