I will discuss new ways of valuing corporations from the "bottom up" — i.e., determining the forward-looking financial valuation of the customer base — as a complementary perspective to the standard "top down" methodologies that dominate current valuation practice. This approach is gaining increasing interest and adoption among a variety of functional areas both inside corporations (e.g., business development, accounting and finance, marketing) and outside of them (e.g., private equity, venture capital, shareholder lawsuits). Customer-based corporate valuation (CBCV) is driving a meaningful shift away from the dangerous (but common) mindset of “growth at all costs” towards revenue durability and unit economics.

This session will introduce CBCV by first showing how it fits within traditional valuation approaches, then applying it to several publicly traded companies. These examples highlight the growing ability of CBCV to move markets, making it a crucially important methodology for executives and investors to understand and utilize.

Beyond the award-winning academic research on CBCV, I will also briefly discuss how I am commercializing and popularizing it through Theta Equity Partners (https://www.thetaequity.com/), a startup that I recently co-founded.

More and more firms are talking about “customer centricity” as a new management framework that allows them to build stronger relationships with customers by better understanding their behaviors and anticipating their needs. But many of them have very different perspectives about what customer centricity means, and these definitions are often quite contradictory. This session serves to clarify this important concept and conveys what retail executives really need to know about this general area. We start with some historical background to help participants understand the evolving shift away from traditional “product-centric” thinking, then focus our attention on the definition/nature of customer centricity: we discuss what it is and isn’t, and touch on some of the key elements in implementing it successfully.  

Many experts are touting the virtues of customer centricity as a valuable emerging business model, but there is a lot of confusion about what this concept means – and uncertainty about whether and how it can lead to greater profitability.  We dive deep into the profitability question: given the risks and costs of becoming customer centric, how can it be more profitable than the more traditional product-centric approach?  We carefully examine the tactical “building blocks” underlying customer centricity (i.e., customer acquisition, retention, and development), and point out some subtle but important insights about the interplay among them.  We highlight a number of actionable suggestions to help managers make the most effective and efficient use of each of them.

More companies – both large and small – are talking about customer centricity as a new management framework that allows them to build stronger (and more profitable) relationships with customers by better understanding their behaviors and anticipating their needs.  But firms have different perspectives about what customer centricity really means, and how to best to implement it.  Professor Fader will clarify this important concept and convey what executives really need to know about this emerging strategic perspective.   He will then focus on the “Heroes of Customer Centricity,” i.e., brief snapshots of a number of executives who are currently driving different aspects of customer-centric transformation within their organizations, and will close with a number of questions/reflections that companies should have in mind as they decide whether/when/how to attempt such transformative changes themselves.

Learning objectives:

1. Recognizing the nature (and limits) of product centricity (PC) in today’s business environment, and the opportunities that customer centricity (CC) can offer.

2. Creating awareness for some of the operational issues and relevant metrics that come into play as part of a move towards CC.

3. Learning from some “best practice” real-world stories about companies that been going through this PC🡪 CC transformation.

4. Determining tangible first steps required for this transformation.

Customer lifetime value (CLV) is emerging as a focal activity for firms that aim to be customer centric. But there is a lack of clarity about what it really means, how it works, and how it can drive successful business outcomes. This session will help sharpen participants’ understanding of this important concept. We will discuss common patterns/diagnostics/methods associated with its use in actual practice as well as organization-wide issues required for successful enterprise-wide implementation. At the conclusion of this session, participants will understand when and how to apply CLV models for different business decisions, and have greater confidence to communicate the motivations, modeling process, and outputs to key internal and external stakeholders.

Marketers have been throwing around terms such as CLV, LTV, and a variety of other labels for customer valuation for several decades now. But besides a few notable applications it has been mostly “cheap talk” –  either an unfulfilled aspiration on the part of managers, or a "quick and dirty" analysis, lacking proper validation, that is used by a small group within the firm but fails to get traction across the organization. Fortunately, these frustrating days are ending: customer valuation is finally coming to the forefront and it is here to stay.  A variety of factors are driving this change, including better customer-level data (far more timely, complete, and accurate than ever before); better computing and IT skills (enabling a broader set of managers to build and use these models), and a stronger competitive imperative (as more firms shift from product- to customer-centric thinking).  In this talk we will discuss this important trend, its implications for executives, and cover a few recent examples of companies (both B2B and B2C) that have used customer valuation in surprising ways and with compelling results.

As retailers and other firms strive to make more and better use of customer-level data to deliver meaningful and profitable customer relationships, they are starting to rely on a number of emerging methods, including machine learning and customer lifetime value. While both approaches are valuable, there is a lot of confusion about when and how to use each one. With that baseline understanding in place, we'll then dive into understanding customer lifetime value models, with a primary focus on theory balanced with light quantitative support as needed. At the conclusion of this session, you'll understand when and how to apply different models for different business decisions, and have greater confidence to communicate the motivations, modeling process, and outputs to your internal and external stakeholders.

Professor Fader will share highlights of his recent research (and commercialization efforts) for two important topics that demand more rigorous approaches than what we see in current practice: (1) predicting customer lifetime value and (2) human resources management. Much of his career has focused on the first topic – developing forward-looking models of customer value, motivating firms to use them, and developing an ever-increasing (and increasingly impactful) set of applications to demonstrate their value in a transparent, accountable manner. More recently he has been bringing similar perspectives (and rigor) to HR assessment and its associated use cases (e.g., learning/development, financial compensation, and desires to optimize organizational efficiency/effectiveness). In this session he’ll cover the challenges to be overcome across these two settings (some that are shared, some idiosyncratic), an overview of the methods involved, some case studies of companies making progress on one or both dimensions, and some longer-term aspirations to bring these two approaches together.