Using Data to Predict the Future of Business with Peter Fader
Today’s guest is Peter Fader, professor of marketing at the Wharton School of Business at the University of Pennsylvania and the co-founder of Zodiac. His expertise centers on the analysis of behavioral data to understand and forecast customer shopping purchasing activities. His insights are reflected in his great book, Customer Centricity.
The highlight of the conversation is Peter’s story of his disagreement with Wall Street’s findings on Dish Network’s company valuations.
Peter and his team analyzed the company valuations using the public data Dish provided to investors. They came up with company valuations that were within 3-5% difference of the forecasts Wall Street was making.
Next, as a fun academic exercise, his students created forecasts for the next 4 quarters using various statistical methods. Peter compared his students’ numbers to Dish’s quarterly numbers and noticed two things: (1) the students were within .5% of the number that Dish announced, and (2) the Wall Street analysts were off by about 10%.
You can read Peter’s article, “How Wharton marketing students beat Wall Street analysts at their own game,” on his findings.
In this episode:
2:00 – Can marketing can be taught or is it learned?
3:15 – What is the genesis of lifetime value and customer centricity?
4:08 – What happens if companies focus on the customers, not products?
5:38 – How do companies define, uncover, and identify the right customers?
9:00 – Wharton creates a new term, “customer-based corporate valuation”
12:45 – How to look beyond big, glitzy metrics
15:27 – Peter’s disagreement with Wall Street analysts
21:15 – Peter’s stock tip!
25:49 – Getting below the surface of the numbers to find the story
29:49 – The blend between data analytics and intuition
31:10 – What’s Next! for customer lifetime value, customer centricity, and the analytics side of growing business?
Running time: 33:43
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