The short answer
Peter Fader brings academic rigour to customer lifetime value, explaining how customer-centric valuation changes what buyers are really assessing, and why the composition of your customer base can be worth more than your revenue line.
Key takeaways
- How to better predict your company’s revenue
- Implementing customer-centricity into business models
- Using predictive consumer analytics to build bottom-up company value
- Improving customer retention and performance
Listen to the podcast
55 minWatch the full interview
About this episode
A marketing professor and a few PhD students start a business...
It’s not the start of a joke, but of an extremely successful consumer analytics business that accurately predicted future purchasing decisions. Started on a whim based on his mathematical models, Peter Fader took this concept and created Zodiac in 2018.
Peter and his team had fun working on the business side of desk, taking it from business theory 101 and practically growing it to 13 full-time employees with a slew of part-time specialists. With the world as their oyster and the team already looking into innovative ways to expand, there was no plan to exit.
That is until their client, Nike, came calling.
Chapters
- 3:33As a professor, Peter didn’t expect to start a predictive analytics business, but after doing the math, building the modelling, and handing it to the masses on a silver platter, he realised no one could implement these systems on the scale that his team could
- 14:28Peter’s goal was to make his lifetime value models as accessible as possible, giving companies as many reasons to run them as possible. He did this using a SaaS model
- 19:30After working with Nike on a few projects, in March 2018, the consumer giant approached Zodiac with an offer Peter and his team couldn’t refuse
- 30:37Working around Nike’s non-compete clause meant that Peter and his team had to pivot to a new modelling system that predicts customer-based corporate valuation
- 41:50Do you want to improve customer performance and retention? Here are the patterns Peter has noticed since launching Theta
The Newscast
How to value, grow and exit your company
Get two useful emails each month: founder stories and lessons in the Buy Grow Sell Newscast, plus the latest small and mid-market M&A insights in The Wire.
Related episodes
About Peter Fader
Peter Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania.
Peter’s expertise revolves around the analysis of behavioural data to understand and forecast customer shopping/purchasing activities. He works with firms from a wide range of industries, such as telecommunications, financial services, gaming/entertainment, retailing, and pharmaceuticals.
In addition to his various roles and responsibilities at Wharton, Peter co-founded Zodiac, a predictive analytics firm in 2015, which was sold to Nike in 2018. He then co-founded and continues to run Theta Equity Partners to commercialise his more recent work on customer-based corporate valuation.
In 2017, Peter was named by Advertising Age as one of its inaugural “25 Marketing Technology Trailblazers” and was the only academic on the list.
Connect with Peter Fader
About the show
Buy Grow Sell is hosted by Simon Bedard, founder and managing director of Exit Advisory Group, a boutique mergers and acquisitions advisory firm that helps Australian business owners value, prepare for and navigate a sale. Every conversation draws on real deals and the patterns behind them.
