Today, we’ve got an excellent interview with Wharton Professor and entrepreneur Peter Fader.

He’s a two-time guest. We wanted to bring Peter back on the show because he’s an expert in customer lifetime value and customer centricity.

How do you predict lifetime value? What models should we use to predict lifetime value? This is what Peter spent his entire career focusing on.

In this episode, Peter talks about the difference between contractual businesses and subscription businesses. He shares some big name eCommerce businesses that on are track to go out of business because of their product-centric model.

It’s a deep dive into customer centricity, lifetime value, and it’s something I think you guys will enjoy.

Episode Highlights

  • 4:37 The predictive analytics work Peter did with Zodiac that made Nike wanted to buy it.
  • 7:50 Customer centricity and why Amazon started out as a book business.
  • 11:06 Why Peter believes demographic and persona targeting is antiquated, and what you should be doing instead.
  • 14:01 Calculating customer lifetime value – with and without demographics.
  • 15:49 How Electronic Arts is rising to the top as a customer-centric company.
  • 20:20 The danger of acquisition addiction and scaling too quickly without considering customer quality.
  • 23:04 How to tell if your company is setting itself up for a crash.
  • 26:27 Quality interactions with customers vs quantity interactions.
  • 29:50 The distinction between contractual versus non-contractual business and how to think about customer churn.
  • 29:50 Distinction between contractual versus non-contractual businesses
  • 32:22 The metrics non-contractual businesses should be examining to measure their success.
  • 34:49 CRMs: expectation vs. reality and how to get the most from yours.

Links And Resources