Quick take: Achieve more profitable growth when you become a customer-centric business. Find out how below.
Each week I sit down with incredible entrepreneurs and marketing minds to bring you inspiring origin stories and actionable marketing lessons you can use to start and grow your coaching, consulting, or service-based business. If you love the show, be sure to subscribe above so you don’t miss an episode.
As a former high school history teacher, it’s a treat to bring another dynamic duo to you, this time from the world of higher education.
Peter Fader and Sarah Toms are thought leaders at the Wharton School of the University of Pennsylvania. They recently released the book Customer Centricity Playbook, which businesses of all sizes are using to increase their profits by focusing on the right types of customers.
In our conversation, Peter and Sarah share how to think differently about your target audience, which customer acquisition channel seems to always win, and how to become a more customer-centric business by determining exactly who your best customers are.
Transcripts, resources, and top-takeaways are below.
Sarah Toms is executive director and co-founder of Wharton Interactive, a platform for marketing simulations. Her 20 years of being a thought leader in the technology sphere include starting several tech companies, and involvement with Women in Tech Summit and TechGirlz.org.
Peter Fader is the Frances and Pei-Yuan Chia Professor of Marketing at The Wharton School at the University of Pennsylvania. He was named by Advertising Age as one of its inaugural “25 Marketing Technology Trailblazers” in 2017 as the only academic on the list.
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If you’re short on time, here are a few golden nuggets from our conversation and the resources mentioned.
- Diversify your idea of the target customer. Individual customers are wildly different from each other, both in terms of what they're looking for from you, and how valuable they are to you in terms of their future lifetime value.
- Referrals first. No matter the industry, acquiring customers through referrals tends to be a strong channel, albeit with somewhat limited scalability.
- Evaluate your metrics in cohorts. Avoid using averages in your data, but explore metrics (like Net Promoter Score) across different customer groups based on acquisition channels, plan levels, activity, etc.
- Focus on the right customers. Discover the customer groups that will best respond to premium packages, and avoid spending too much energy on those whose customer lifetime value has a low upper limit.
- Customer Centricity Playbook
- Wharton Interactive
- Peter Fader (Wharton School)
- Sarah Toms on Twitter
- Customer Centricity Manifesto
Get to know Peter and Sarah
Bob: Pete, and Sarah thank you so much for joining me for this week's episode of the Lead Generation.
Peter: Good to talk to you, Bob.
Sarah: Yes, likewise. Really excited for the conversation.
Bob: I do appreciate you taking time out of your academic life, and the pursuits you have out in Pennsylvania at the Wharton School. I'm looking forward to getting into Customer Centricity Playbook, and some of the lessons that you share in that.
Before we do that though, I would love for each of you to share just a quick nugget of when you were back in an earlier phase of your life, what might've happened, or what did you run into that made marketing this fascination that you wanted to pursue it both academically and professionally?
Peter: Well, for me it really was kind of a moment of truth, because I never thought about it at all. I'm just a number cruncher, I just like forecasting things. So, back when I was an undergraduate at MIT, it was the furthest thing from my mind until one of my professors came to me, and said, 'You ought to get a PhD in marketing', and I said, 'You ought to get your head checked', but she laid out this vision.
This was 1983. They had a vision of what marketing would become with data, and the ability to tag and track individual customers, and forecast what they're doing, and build businesses around some of those insights and methods.
So, she was right, and so much of what I do today is just homage to professor Leigh McAlister, who's now at the University of Texas who brought me into it. I've been paying it forward, bringing in lots of other folks who never thought they'd go into marketing either, whether it's academic, or as practitioners. I'm just so thankful and having such a good time in the field.
Bob: I'd love to hear this from you too, Sarah, but I just want to acknowledge how much foresight back in '83 did your professor have? You know, a PC was barely a thing for most people. I remember back then, the Commodore 64 was in our house, and we were one of the only people in our small town in West Virginia to have a computer in our home, and fast forward 35 years later, or whatever, and 36 years later, it's amazing what's happened since then. So kudos.
Peter: It really is incredible, and not to belabor it too much, but that was, if you think about it, if you do the math, that was 500 years ago, it was right after the printing press was developed. Very few stores had a point of sale scanners in them.
You couldn't insert your credit card into a gas pump, just a lot of the things that we take for granted now that allow us to collect data on individual customers just didn't exist, and the problem is, and we'll get into this of course, is that today's business practices for a lot of companies, especially a lot of the smaller ones who might be listening to this, are still using the old textbook of how to run a business that isn't as mindful, or taking advantage of all those data sources. So, we want to talk about that transition and transformation.
Bob: Excellent. Looking forward to that. Sarah, how about you? What happened in your early life that made marketing such a passion for you?
Sarah: Like Pete, I never considered myself a marketer, but 400 years ago in the mid-'90s, I joined the workforce right out of college and started my first tech startup. As part of that, you have to wear every single hat in the organization, and marketing was an important hat that we wore, me, and my co-founder.
So, it was at a point where we were starting to see some differences in our customer behaviors, but we really had no clue. We just thought that we could turn all the ugly ducklings into beautiful swans. Over the course of my career, I've really sat firmly in this technology role, but have always been in the business realm as well.
So, I've always incubated, faced with business people, and you might say inside sales, and inside marketing from the standpoint of IT, and what technology brings to the table. Then obviously moving into the Wharton School, and my amazing relationship with Pete has just brought a whole new set of ideas that have really brought me back to very early on in my career and brought a lot of 'Aha' moments. I wish I could go back, and talk to 24-year-old Sarah, and go, 'You know that thing you were saying? Well, you're going to meet Pete Fader one day, and you're going to understand why that was happening.'
Bob: Kind of a Doc Brown experience that you could have had.
Why customer heterogeneity matters
Bob: At the heart of what you two talk about is the difference between being customer-focused and customer-centric, and I'd love to start our conversation there. Pete, tell us a little bit about what does customer-centricity really mean, and what do most people get wrong when they think about customer-based marketing?
Peter: I like the way you put those two phrases together, Bob, because too many people think that they're identical to each other. That, 'Well, we just think about the customer, focus on the customer, we're centered around the customer', actually means something quite different, almost polar opposite of that.
Which is to say that the customers are wildly different from each other in terms of not only what they're looking for out of us, but how valuable they are to us in terms of their future lifetime value. If we could see the numbers show up over each customer's heads, we'd realize how wildly different they are, and therefore we've got to make some tough choices:
Are we going to try to be everybody's best friend, which can be kind of expensive, and kind of ineffective, or should we try to figure out who the best customers are, and find ways to enhance their value, extract that value, and find more like them, and if we can tip our business a little bit more, or disproportionately more towards those better customers, then we can find greater success than aiming for the average one.
It really is more of a celebration of the differences or the heterogeneity that we like to say, across the customers, a decision of which customers do we to be centered around, as opposed to trying to focus on the lowest common denominator.
How to acquire the best customers
Bob: I love that and Sarah, how would you take that into the application of acquisition of customers? That's one of the three main things that you focus on. When you do think of trying to find that ideal customer is the best customer to target, what kind of acquisition practices would you suggest are really working well for the companies you've studied?
Sarah: That's a really tough question because it really depends on the company, but I would say it's just understanding, the first thing for me is really getting your arms around your CRM, and having a database, and having an approach to your data management, and tracking.
So, to Pete's point about tagging, and tracking customers, you really need to lay out some hypotheses, and say, 'Is this acquisition approach really gaining us the best types of customers, or are there other better ways to do it?'
In the book, we lay out a number of different tactics, and strategies in really understanding kind of, well what's playing for, let's say a broad strategy, and an indirect tactic, et cetera. So, really kind of understanding the differentiation along those lines, but what I would say is there probably isn't a one size fits all with saying specifically for business, you're probably getting better customers this way, besides referral.
Referral is one type of acquisition, especially when it's happening organically, that we do see industry, by industry, study, by studying where you tend to get higher valued customers, tend to, but do keep in mind that that's going to be a limited number of customers that you'll be able to acquire that way.
Bob: Yeah, I like that.
Peter: If I could add to what Sarah was saying, I agree completely with everything she said. If you asked your listeners how they'd stack up to different acquisition approaches, and channels, I know that the first thing they're going to be thinking of is, which ones are the least expensive?
In other words, what channel is going to bring us the most customers for the least amount of money? And one of the reasons why people like referrals is because they come for free.
Part of our goal is to change that mindset, to stop thinking about where the cheapest customers come from, to really focus on where the best customers come from.
Think more about value instead of cost, and that's why Sarah's answer might've seemed somewhat evasive, because it's easy to know which channels are cheapest, that tends to be pretty standard, and universal, but it's hard to know where the best customers come from, and it can vary very much from one context to another.
Bob: I love that, and you mentioned something here, Pete that I want to dig into a little bit more, which is this value, versus cost, and the two of you talk a lot about customer lifetime value as a way to understand the kind of a target of what to really focus on for marketing and business, etc.
For those that are a little less initiated in the world of marketing, a lot of our audience members are self-taught entrepreneurs, right? What would you say is a clear definition of customer lifetime value, and what are some of the factors that you say they should be paying attention to be able to measure it?
Peter: Sure thing. So, the clean, textbooky definition would be the projected financial value in the future of this customer, not how much money they've paid to us already, we've already cashed that check, but projecting how long is this relationship going to last? How many interactions, how many transactions will happen over that horizon? What will the average basket size be? How much stuff are they buying each time, and what's the contribution margin of those items?
When you break it down to those kinds of tangible things, a lot of your listeners, they already understand that they kind of have an intuitive sense about which particular individuals, or perhaps which types of individuals just tend to have more gas in the tank, have more value in the future.
What I want to do is to do two things: It's to crystallize thinking around that concept, to get people to really be thinking ahead in terms of value, instead of cost; and then two, just to formally quantify it, that it's really not that hard to take that intuition, and put the numbers up against it; and then three, think about other use cases.
Once you have those numbers, other things you can do beyond just smart customer acquisition that would help you make better business decisions, and create more alignment, having more decisions being tied to a common set of metrics.
How to increase customer retention
Bob: So, another aspect of the growth of the customer, or lifetime value, I love this idea of projecting into the future. Many people think about spending money on Facebook ads, or some other kind of marketing tactic that does cost money. They look at this initial return on ad spend as a number, as a metric, obviously shortsighted, because they do have this repeat buying.
What are some of the value, or activities that you're seeing smart companies do around retention that gets them to want to buy a second time, a fifth time, a 10th time?
Peter: Well, I'll take a stab at it, I'm sure Sarah will have more. For one thing, a lot of companies, as they start to get sophisticated about the day, they will think about what their retention rate is, it's a great concept. I'm glad that companies will start thinking about it, but they have to think further about it for two reasons.
Number one, there's not just a retention rate. The propensity of customers to stick around longer is going to vary a lot across them. The average retention propensity, or the average churn rate, if you want to be more negative about it isn't necessarily indicative of any one customer.
I mean, think about it this way, you got two kinds of customers. You've got the ones who are going to stay with you forever, and the ones who are very flighty, and going to leave pretty quickly.
You want to understand what's the mix across the two. To really, like I said before, to celebrate heterogeneity, to understand that not all customers are created equal, and instead of just trying to improve the retention for the average customer, to kind of focus more on those who are born to stay with us a long time, to figure out what makes them different, figure out how to acquire more like them.
Sarah: What I would add to that, and we talk about this in our book is about the two-step process that you need to think about with retention, there's this sort of two-step dance you're doing with respect to retention, and development, and the way Pete, and I like to frame is that you're really playing offense, and defense.
Defense with the retention, and offense with trying to extract more value out of your existing customers.
One area that we've had just some tremendously amazing conversations with folks, especially in industry, have been around where they're aligning their different programs to retain their customers, and then also where they're aligning them to extract more value with respect to CLV, when they're thinking about high-value customers, versus mid to low value.
And one area that we get time, and time again, A, wrong, and B, when we share where we believe loyalty programs specifically belong, 'Aha' moments across the board, like 'Oh my gosh, we're doing this so wrong.'
So for us, loyalty programs, you're really looking at mid to low tier customers, right? And this is really about trying to extract a little bit more value out of those mid to low tier customers. When we share that with companies, nine times out of 10 it's not really what they're doing strategically with their loyalty programs.
Why loyalty programs are not the ideal retention play
Bob: Cool. So, just to put a little bit of a real picture on this, a loyalty program may be something like if you order so many times, we'll give you this extra gizmo, or gadget, or in Starbucks' case, for example, an extra cup of coffee, because you've got five extra stars in your app, right? Versus more premium kinds of offerings for people who are your more dedicated true fans, and true customers. How else would you define that from any examples you've perhaps worked with?
Sarah: Yeah, so exactly right. Your loyalty example is exactly right. So, let's say you have a customer that is already coming to you and buying Starbucks three times a day, that's all the coffee they're going to drink in their day. Is a loyalty program really going to make them any more valuable? Probably not.
You know, so that's where we're saying it's for the customer who's also buying three cups a day, and that loyalty program is really attracting them to come in the door one more time to you, two more times to you, versus just the ones that they were purchasing. On the premium side, this is really where you're looking at your higher-tier customers, and they want more from you, and we use several examples in the book. This is where you're leaving quite literally money on the table because if you offer something, they're more than likely going to snap it up, and become even more valuable to you with usually not as much effort as you would think on your part.
Bob: Was it Starbucks, or a different coffee company I remember seeing in the past where they had some form of like a gold cup or something like this? Is this familiar to you at all? They said, 'If you buy this for $500', or I don't remember what the number was, but it was a lot of money for a cup, but you could bring it in, and get a cup of coffee every day. That seems to me to be an example of a premium offer because you're going to get quite a bit of value from it.
Peter: I love that, Bob. That's a great example, and I don't know if that's Starbucks or not, but to echo that point, and the way that you laid out the distinction between the two is perfect, right on. We want to see more companies doing that kind of thing.
Not just having the high tier in the loyalty program. That's nice, that's great, but have that special extra program that most customers would never really qualify for, and could maybe never even aspire to. But for those valuable customers, maybe there's not many of them, but to let them know that they really are different and that you really are thinking about them as not just being kind of shades of gray better than the so-so customers, but being qualitatively different.
What net promoter score means for your business
Bob: Well, and this is an opportunity to think for us to chat a bit about two metrics that we see in our company. We're a software company obviously, so we have a SaaS model of growth, and so forth, but we're looking at things like net promoter score, and lead scoring.
Both are something that you can do within your CRM through either survey or with something technical. We use a software called Drip for our marketing automation. Talk to us a little bit about net promoter score first, and how people either use, or misuse that, and how they can use it to help identify who their top customers could be.
Sarah: Net promoter score is a score that Pete, and I actually like. We like it because it recognizes that there is heterogeneity at play in your customer base when you're looking at your promoters, versus your detractors, and we do believe that it's a good starting point when you're starting to tease out and see that landscape of customers in front of you.
What we would like to see, and going back to your retention question, which has a nice lead into things like switching costs, and other things, we'd like to actually see companies start to understand more dimensionality with respect to things like their NPS score, or their customer effort score or any other type of CX score that you might be using, customer satisfaction, etc.
Peter: And it's interesting to take Sarah and my praise for it in the context that I'm an academic, and as a professor, we generally hate net promoter score, because it is so simple, and because it was developed by a practitioner, not a fancy pants professor. But it is the simplicity of it, how easy it is to calculate it, to get people to understand it, to compare it across different customer groups, or geographies, or business units.
Ultimately, as Sarah said, because it's not just looking at the average satisfaction, it's looking at the difference across the range from the best to the worst.
In many cases, I like to think about NPS, not as the be-all, and end-all, but almost as a starter drug that once you appreciate it, once you can start to build systems around it, once you can start to take action from it, then you're ready to graduate to the next step, which is going to take you to something more like customer lifetime value.
There really is a beautiful interplay between the two. They align up pretty well. Your promoters are going to tend to have higher lifetime value than your detractors, but it's also going to be a little bit more precise, and give you more directional guidance about how you should be allocating your precious resources.
Sarah: In practice, the one thing that we would also really warn against is starting to take averages of these scores, because once again, you're completely wiping out all of that wonderful insight about the data, and so unless you're starting to slice, and dice, and really try to understand your customers even down to an individual basis, you're really not getting the power of this type of a metric in the first place.
Track cohorts of customers, not averages
Bob: Excellent. So along those lines, I love this conversation around heterogeneity, just really driving that home that your customers are very different from one another. To put a specific case in point for us here at Leadpages, we have four different levels of our membership: We have the basic plan, the standard, and pro, and then advanced.
Each one of those can be either monthly or annual. When they come in, we ask them the question: Are you here because you want to build a website? Are you here because you want to make a landing page? Or are you here, because you want to set up some lead generation opportunities on your existing website through our alert bars, and popups, and so forth?
And what we've started to see within our dashboards are cohorts of people who, if they are choosing a pro monthly person who wants to make a landing page, their conversion rate from trial to paid, and then their customer lifetime value down the road is very different from the people who come in from a different avenue. First of all, is that kind of approach a small business can take or is there something else that maybe we're even missing the boat on around cohort analysis?
Peter: Wow, that's just great stuff. Bob, the way you said it, the exact words you used, spot on. It's so nice to hear that someone who's working with small businesses is using exactly the same language that I'd be advocating for big, giant multinationals. So, let's agree on that.
A couple of fantastic points there.
First of all, it is really important, I don't care how big, or small you are, to look at customers on a cohort basis. In particular, when did we acquire you? Or perhaps what was the first product, or service that you bought from us, or what campaign did you first respond to? We want to put our customers in buckets based on different kinds of acquisition characteristics to understand how they're different from each other. In other words, we know that there is going to be lots of heterogeneity across our customers.
There is going to be heterogeneity within the cohorts, but which cohort of customers is going to tend to give us a slightly better mix? In other words, are we finding a better mix of customers that we acquire online, versus some kind of offline activity?
So, it's really important to begin tagging and tracking with those acquisition characteristics so we can start to make those cohorts, and get some really good understanding about them.
And then the second step follows quite naturally. Once we see which acquisition characteristics tend to be associated with slightly better customers, let's do more of that, even if it's going to cost us more, that's okay, because we're going to get a better mix. And when you start to look at things through the lens of lifetime value, there's this kind of multiplier effect, that that goodness will play out for years over time. So, it's actually worth reaching a little bit further, spending a little bit more money to get those better mixes of customers, because they're going to pay back.
Bob: I love that.
Sarah: The other aspect of it is how your cohorts change over time. As customers are leaving that cohort, the quality of the cohort itself will track up, the heterogeneity will track down, and understanding that it's completely natural, and overtime as cohort after cohort, you won't necessarily be able to always hit the high standards you were getting before, and that again is perfectly natural, and just understanding it's not some poor salesperson who you need to scream at, this is just a natural way that marketplaces and customer acquisition work.
Bob: It's kind of like a half-life, radioactivity model, right? That some things are going to last, and others will last longer, but paying attention to it, and the right numbers alongside it is what seems to really matter.
Peter: You know Bob, that's a super good metaphor, and in a lot of the models that we'll use to project customer retention actually is not that different from other kinds of physical phenomena. Rather than trying to reinvent the wheel, and over complicate things, which is something that marketers love to do, we want to keep it simple, and will borrow a lot of models, and frameworks from say, physical, or social sciences that actually do a really good job to be able to come up with these forecasts.
Develop great customers into greater customers
Bob: Excellent. So, so far we've talked about acquisition ideas, and retention ideas and the third pillar of what I take to be your Customer Centricity Playbook is development. So, let's talk a little bit about that now.
How can we take customers that are doing well, they seem to be identified, either self-identified or through patterns that have been involved, to be ready for development, i.e, let's increase the value per purchase of these folks. What are some of the things that you see working really well in your simulations, and in talking with real companies that development helps with that long-term customer lifetime value?
Sarah: Oh, so I already alluded to a lot of this in the two by two framework that Pete, and I have laid out in the book, I believe page 44, and one thing I would say, and this just comes out of the conversations that Pete, and I had when we interviewed a few companies for the book, is that where we tended to see some of the very successful experimentation happening in companies who were interested in dipping their toes into CLV models, and calculations were actually in the development area.
Because it's sort of untapped territory where you can start to really show some amazing gains back to your business. I don't know if you agree with me, Pete, but some of the conversations that I had with folks when they were trying to experiment with small programs in CLV, and in customer-centricity development was an area that really was a great place to begin.
Peter: Well, of course, I agree, and to get a little bit more specific about it, if you look at most companies, the way that they try to develop, or fatten up the existing customers, it all comes down generally to cross-selling, and upselling. You know, people who buy this, also buy that, and, 'Can we get you to buy the higher margin version of the item?'
And that's fine. We're not saying anything negative about those approaches. They kind of come naturally, and you should always be asking, 'Do you want fries with that', or 'Do you want to supersize it?'
But we should be able to do better than that. Like I was saying, that was kind of marketing from 500 years ago, but in this data-driven era, the kinds of programs that we can develop now, I mean we spoke a little bit about loyalty programs, and premium services, they're just so much more sophisticated, they're so much more trackable, they can be customized much more.
There's just this greater opportunity to do the development thing that better leverages today's data analytics, and technology. A lot of companies kind of delay on those things. They just stay with the good old cross-selling, upselling, it's all they know, and this other stuff sounds too fancy, but there's money to be made there. It's very often worth the investment.
Focus on the higher flyers
Bob: Yeah, and one of the ways this plays out for a lot of the audience that we connect with is, they think that they have to bring everybody into the same initial product, and then take them through what is called a 'Tripwire offer', which is usually under $30, and then they wait a week, or maybe it's right away for a one-time offer or a special offer, but they usually wait a week, then they upsell them to the $200 thing, and then they wait a couple of weeks, and they upsell them to the $1000 dollar thing.
So, I think one of the magical things of what you two are talking about that plays out is just being able to identify even before their first purchase, what are some characteristics of a potential customer that allow them to say, 'I can offer this $10,000 program immediately,' and not have them have to go through this one year long, hoop-jumping brigade, and still do quite well with it.
Peter: That's a great point, and to add to that, Sarah alluded to this earlier, so it's really worth emphasizing. There's a lot of companies out there that just want to acquire as many customers as cheaply as possible, and then educate them, train them, and take them through those various steps, to turn them from ugly ducklings into beautiful swans, but in many cases, it’s easier said than done.
Many cases, customers are kind of born with the amount of goodness that they have, and there's only so much that we can do. We can push things, and we try to convince them and be their best friend, and take them out for a round of golf, or whatever else, but we're only going to be able to create so much value out of them.
At some point, we have to know when we actually get to stop with the customer development activities, and say, 'You know what? This customer is only going to be so good.' It doesn't mean we should fire them, but maybe we should be focusing more of our efforts on acquiring better customers instead, and so again, it means a leap into the unknown, it means taking on expenses that you might not have to do otherwise, but if you could acquire a customer who's 10 times more valuable than the so-so ones that you have, it's well worth it.
Sarah: The other side of that is also recognizing that, in line with what Pete was saying, just because not everybody is opting for your premium offering, that's actually a good thing. If you have most of your customer base opting for your premium offering, it means you probably haven't gone far enough.
So, we talk about Amazon Prime as a great example. I think Pete's joke basically is, you're not alive unless you have Amazon Prime at this point. So, it's not necessarily a premium service, it's just a standard product offering, and they could probably do one even better, and gain even higher valued customers out of it.
Bob: Yeah. If they spun off Amazon Prime as its own company, it would already be able to be listed on a major stock exchange just in the number of people that have it, right?
Sarah: And thinking about what an Amazon Prime Plus might be, and who would opt for that from $300 to $500, et cetera.
Peter: And you know, this isn't that hard for any company, even if you're not doing the fancy lifetime value calculation. Small business is actually in a pretty good position because they have a somewhat limited number of customers.
Very often, they're operating out of one, or to a limited number of facilities. So, you already have a pretty good sense of who those best customers are. You just kind of know it, and so the question is, what makes them different, and what kind of special things, not discounts, but special value-added services: Extra hours, extra help, special phone line. I don't think that it's asking too much of a small business to start aiming for the top sooner, rather than later. It just doesn't come naturally to a lot of companies.
Predicting the future of your business through simulations
Bob: That's really good. So, one of the things I wanted to chat about before we wrap up is Sarah, you have been part of a simulation group in Pennsylvania. I want to learn a little bit more about that, and what are some of the things that are, I guess, lessons quickly learned by companies that go through the simulations that you guys run. So first, tell us a little bit about the simulation program that you've started, and then a little bit of the lessons that people tend to learn when they go through it.
Sarah: Yeah, absolutely. So I co-founded, and lead a team here at the Wharton School called Wharton Interactive, but quite frankly, I can't take complete claim for this. It really comes from a rich, long culture here at the Wharton School of experiential learning. We really pride ourselves in making highly interactive classes, a lot of times around our own simulation development.
So working, partnering with faculty to really bring their theory to life, and have that be in the form of a game or the simulation that the students can actually roll up their sleeves, and be in the driver's seat, and understand everything that the faculty is talking about with respect to the theory that's being presented. Through the experience leading our learning lab team, which is really focused on supporting faculty, and students here at the Wharton School, I realized that we had an opportunity to really grow this, and start to offer different platforms to the world.
So, what we are doing successfully is creating interactive gaming platforms for education, and also interactive authoring platforms, also in support of education. Along those lines, I have a really wonderful partnership now with Pete.
We created the customer-centricity stimulation with him about three, or four years ago, and this has now become one of our flagship offerings here at Wharton Interactive. So, this has become a catalyst for a lot of organizations where they're bringing together their own diverse, heterogeneous teams, and they are interested in learning more about what it takes to become customer-centric. It's a great, one-day boot camp format way to really put your things in the driver's seat, and get to know what it means with respect to acquisition, retention, development, and all the other strategies that we've been talking about in this conversation.
Bob: Cool. Would it be fair to say that Wharton Interactive is the premium version of the Customer Centricity Playbook?
Sarah: Yes, it is.
Peter: That's a very good way to look at it.
Bob: Yeah. Well, you got to make sure everybody practices what they preach, right?
Bob: And Pete, I would love to know, is there anything that Sarah just mentioned, or is there anything that Sarah forgot to mention about what is happening in that simulation program that you think our listeners would really benefit from?
Peter: We talk about this, and I hope that your listeners are finding all this interesting, intriguing, I hope they can relate to it, or aspire to it. It's one thing to talk about it, but it's a whole nother thing to experience it, to be given a budget, and do it in a somewhat competitive setting, and to say, 'Go out there, and make as much money as you can.'
For this simulation in particular, the Customer Centricity one, it really gives the participants a chance to do things they've never done before. I mean, there's a lot of business simulations out there that will help refine your understanding of the business world, but the idea of going out there, and creating as profitable a customer base as possible. So, which kinds of customers do you want to acquire? How much do we want to pay to get them?
And they're bringing all of the kinds of shiny objects that we've been alluding to: the CRM system, the loyalty program, the referral program, the strategic account management, many things that are kind of in the vocabulary of your listeners, but they haven't had a chance to really fully explore them. They want to know whether and when they should do so. It's a nice way to get exposure to a lot of things that people have been thinking about, but haven't fully come to understand, the trade-offs, and synergies among them. It's been really eye-opening for a lot of participants, and for us too to see the way that people approach it, and it's just a whole lot of fun.
Sarah: Coming from the simulation experience, really where we're ending the day is talking about how they take that experience back into the organization itself. What experiments are they going to run? What impediments to success do they see? What are the external stakeholders, and the internal stakeholders they need to bring on board to help be successful? All these types of questions are really where we like to land with the simulation day.
Connect with Sarah and Pete
Bob: Excellent. Well, Pete, and Sarah, it's been a delight to chat with you both about customer-centricity. I know that you have a manifesto that you'd love for people to perhaps adopt on their own. Where can people find that, and is there anything else online that you'd want to point people towards?
Sarah: Absolutely. So, if they go to customercentricitymanifesto.org, you can take a look at our manifesto for customer-centricity, and also please leave your name, and we would be happy to have you as one of the signers. If you're interested in the simulation, you can reach out to us at interactive.wharton.upenn.edu, and lots of easy ways to get in touch, and we'd be happy to have a conversation.
Bob: Awesome. We'll keep those in the show notes as well for you over at leadpages.net/podcast. Again, Sarah, and Peter, thank you so much for joining me for today's session.
Peter: Great talking to you, Bob.
Sarah: Real pleasure. Thank you, Bob.
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