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Peter Fader      

Marketing Consultant & Professor at The Wharton School of the University of Pennsylvania

Peter S. Fader is the Frances and Pei-Yuan Chia Professor of Marketing at The Wharton School of the University of Pennsylvania. His expertise centers around the analysis of behavioral 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. Managerial applications focus on topics such as customer relationship management, lifetime value of the customer, and sales forecasting for new products. Much of his research highlights the consistent (but often surprising) behavioral patterns that exist across these industries and other seemingly different domains.

In addition to his various roles and responsibilities at Wharton, Professor Fader co-founded a predictive analytics firm, Zodiac in 2015, which was sold to Nike in 2018. He then co-founded, and continues to run, Theta Equity Partners to commercialize his more recent work on “customer-based corporate valuation.”

Fader is the author of "Customer Centricity: Focus on the Right Customers for Strategic Advantage" and coauthor with Sarah E. Toms of the book "The Customer Centricity Playbook." He has been quoted or featured in The New York Times, The Wall Street Journal, The Economist, The Washington Post, and on NPR, among other media. In 2017, Professor Fader was named by Advertising Age as one of its inaugural “25 Marketing Technology Trailblazers,” and was the only academic on the list.

Speech Topics


Establishing Competitive Advantage Through Customer Centricity

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 provide a brief overview of the traditional product-centric approach and some of the evolving concerns arising from it. He will then focus on the nature of customer centricity (e.g., how do a local coffee shop and Starbucks compare to each other?), the key factors in implementing it successfully, and how it can help transform a company and drive profitable growth.

How Can Customer Centricity Be Profitable?

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.

Customer Valuation Finally Comes of Age

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.

Machine Learning Meets Customer Lifetime Value

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.

Customer-Based Corporate Valuation

Professor Fader 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.

Customer-Based Corporate Valuation: Recent Updates and Future Projections

Last time Professor Fader was with us, he introduced his new research agenda focusing on 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. Since then, this “CBCV” approach has been picking up lots of momentum through new papers and the work that Theta has been doing with investors, corporations, and in its partnerships with various consulting and analytics providers. We will discuss this progress, possible next steps, and its implications for future business practices.

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The Customer-Base Audit

Professor Fader will discuss his new book, The Customer-Base-Audit: The First Step on the Journey to Customer Centricity (Wharton School Press). First, he will explain the connections between this book and his other research/teaching/consulting activities (including his two previous books and the two companies he co-founded). Then he will take a deeper dive into some of the primary concepts/frameworks from the book, and will lead a discussion about its implications for global executives.

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