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The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value
2019 AXIOM BUSINESS BOOK AWARD WINNERFeatured in Forbes, NPR's Marketplace, and a Google Talk, The Customer Centricity Playbook offers "actionable insights to drive immediate value," according to Neil Hoyne, Head of Customer Analytics and Chief Analytics Evangelist, Google. How did global gaming company Electronic Arts go from being named "Worst Company in America" to clearing a billion dollars in profit?They discovered a simple truth—and acted on Not all customers are the same, regardless of how they appear on the surface.In The Customer Centricity Playbook, Wharton School professor Peter Fader and Wharton Interactive's executive director Sarah Toms help you see your customers as individuals rather than a monolith, so you can stop wasting resources by chasing down product sales to each and every consumer.Fader and Toms offer a 360-degree analysis of all the elements that support customer centricity within an organization. In this book, you will learn how Develop a customer-centric strategy for your organization Understand the right way to think about customer lifetime value (CLV) Finetune investments in customer acquisition, retention, and development tactics based on customer heterogeneity Foster a culture that sustains customer centricity, and also understand the link between CLV and market valuation Understand customer relationship management (CRM) systems, as they are a vital underpinning for all these areas through the valuable insights they provide Fader's first book, Customer Centricity, quickly became a go-to for readers interested in focusing on the right customers for strategic advantage. In this new book, Fader and Toms offer a true playbook for companies of all sizes that want to create and implement a winning strategy to acquire, develop, and retain customers for the greatest value."A must-read."—Aimee Johnson, Chief Marketing Officer, Zillow"The Customer Centricity Playbook offers fundamental insights to point organizations of any size in the right direction."—Rob Markey, Partner, Bain & Company, Inc., and coauthor, The Ultimate Question 2.0"Peter Fader and Sarah Toms offer transformative insights that light the path for business leaders."—Susan Johnson, Chief Marketing Officer, SunTrust Banks
- GenresBusinessNonfictionDesign
131 pages, Kindle Edition
Published October 30, 2018
138 people are currently reading
606 people want to read
About the author
Peter Fader
17 books44 followersPeter 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.
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.
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Displaying 1 - 30 of 37 reviews
November 5, 2019
Better than the previous iteration, but I still have concerns.
I continue to find the term "customer centric" confusing. The concept of CLV seems more future value centric rather than customer centric. Fader admits as much in the book. “The term certainly sounds like it has something to do with making the customer the central focus of your organization. But it doesn’t.” (page 1) If this is the case, why did Fader choose to use this confusing name?
I also find that some of the language lacks customer empathy. To “extract value” (page 2) from customers is not wording I would use personally. I understand this is the nature of a business from a purely capitalist standpoint, but the phrase still gives me the creeps.
Much more problematic is the constant confusion between CLV and ECLV. We are told (page 8) that it is important to distinguish between CLV (the concept) and ECLV (a predicted future value). However, in the very next paragraph Fader himself then manages to confuse the two. I agree with Fader that this distinction is indeed very important, so I wish the book was less equivocal in this regard.
Finally, I find it deeply concerning that throughout the book no distinction is made between future customer value and potential _incremental_ value (or remaining opportunity). It seems that it is simply assumed (when Fader repeatedly recommends we focus our best efforts on our highest CLV customers) that the most valuable customers are also those with the most opportunity value. This is not necessarily true. In fact in some businesses it may very well be the opposite.
The good: it’s short like the previous one.
I continue to find the term "customer centric" confusing. The concept of CLV seems more future value centric rather than customer centric. Fader admits as much in the book. “The term certainly sounds like it has something to do with making the customer the central focus of your organization. But it doesn’t.” (page 1) If this is the case, why did Fader choose to use this confusing name?
I also find that some of the language lacks customer empathy. To “extract value” (page 2) from customers is not wording I would use personally. I understand this is the nature of a business from a purely capitalist standpoint, but the phrase still gives me the creeps.
Much more problematic is the constant confusion between CLV and ECLV. We are told (page 8) that it is important to distinguish between CLV (the concept) and ECLV (a predicted future value). However, in the very next paragraph Fader himself then manages to confuse the two. I agree with Fader that this distinction is indeed very important, so I wish the book was less equivocal in this regard.
Finally, I find it deeply concerning that throughout the book no distinction is made between future customer value and potential _incremental_ value (or remaining opportunity). It seems that it is simply assumed (when Fader repeatedly recommends we focus our best efforts on our highest CLV customers) that the most valuable customers are also those with the most opportunity value. This is not necessarily true. In fact in some businesses it may very well be the opposite.
The good: it’s short like the previous one.
September 28, 2018
I read The Customer Centricity Playbook by Peter Fader and Sarah Toms in a single sitting—so much value packed into about 100 pages.
Everyone talks about ‘customer centricity,’ but this book is the first one I've read that takes the trouble to define the terms: customer centricity, expected lifetime customer value (ELCV), and what it means to be a ‘good customer.’
I recommend The Customer Centricity Playbook to anyone who has read my book The Membership Economy and who wants to understand, in a holistic and practical way, how to build deeper, more valuable relationships with the people they serve.
Everyone talks about ‘customer centricity,’ but this book is the first one I've read that takes the trouble to define the terms: customer centricity, expected lifetime customer value (ELCV), and what it means to be a ‘good customer.’
I recommend The Customer Centricity Playbook to anyone who has read my book The Membership Economy and who wants to understand, in a holistic and practical way, how to build deeper, more valuable relationships with the people they serve.
November 25, 2018
The essence of this book is that the customer needs to be at the centre of your business and that customers are not created equal. Understanding the value of a customer should determine the efforts we make to do business with them, just how many resources should be spent on serving them.
The book explores loyalty, the value of exclusivity, the lifetime value of customers and provides details and advice. This may sound like the content of other marketing books but there are new perspectives with the facts and figures in support, eg: “one in five cross-buying customers is unprofitable.” The case studies explore successes and failures and this is most helpful. It outlines strategies that are defensive (great customer service) versus offensive (a CRM programme). Its thought-provoking.
‘Organisations that successfully adopt innovative approaches such as customer centricity are that can navigate change with agility and minimal friction.”
It’s a deep read so I’m only ⅔ of the way through, but its too good too rush. I highly recommend it.
With many thanks to he author, the publishers Wharton Digital Press, and NetGalley for my free copy to review.
The book explores loyalty, the value of exclusivity, the lifetime value of customers and provides details and advice. This may sound like the content of other marketing books but there are new perspectives with the facts and figures in support, eg: “one in five cross-buying customers is unprofitable.” The case studies explore successes and failures and this is most helpful. It outlines strategies that are defensive (great customer service) versus offensive (a CRM programme). Its thought-provoking.
‘Organisations that successfully adopt innovative approaches such as customer centricity are that can navigate change with agility and minimal friction.”
It’s a deep read so I’m only ⅔ of the way through, but its too good too rush. I highly recommend it.
With many thanks to he author, the publishers Wharton Digital Press, and NetGalley for my free copy to review.
October 18, 2024
work book clubs are not for me lol
September 1, 2019
I found this book very average. Selectively taking on existing methodologies and concepts, it tries to dress them up in a different veil, but without much tangible outcome.
For a book that positions itself as a "playbook", I thought the supposed action steps and guidence to general and vague, where even the "concrete" examples lacked to demonstrate any kind of clear learnings.
The only good thing about it (apart from the slightly "new" concept of customer centricity) is that the authors luckily didn't succumb to the trend prevalent in the business book industry, and kept it overall short and sweet, easy to finish in just two sittings.
For a book that positions itself as a "playbook", I thought the supposed action steps and guidence to general and vague, where even the "concrete" examples lacked to demonstrate any kind of clear learnings.
The only good thing about it (apart from the slightly "new" concept of customer centricity) is that the authors luckily didn't succumb to the trend prevalent in the business book industry, and kept it overall short and sweet, easy to finish in just two sittings.
November 20, 2021
The product friend who recommended this book to me told me: this one has a very strong commercial focus - and indeed it does :) But if anything that's a valuable perspective to product people: we rarely think in the commercial frameworks our colleagues in the business do.
The main argument here is: not all customers are "born equal". Even though we hear often that "it costs more to acquire new customers than to retain the ones you already have", this saying misses the point that if you have low or negative value customers then you surely wouldn't want to keep them, but instead look for better prospects? You could potentially try to grow them into higher value segments however normally each customer comes with their pre-defined propensities and abilities to spend for your particular product. Sometimes trying to force it just won't work, no matter how much rewards you offer or how good your CX is - the product might just not be right for the customer you are trying to retain or grow.
That's why it's crucial for organisations to analyse and leverage CLV - Customer Lifetime Value. Based on it, they can focus on the right segments that require the most attention in terms of retention and further customer development. Depending on the organisation's strategy, it can then utilise the best combination of offensive or defensive marketing techniques based on CLV to maximise its business.
An interesting point is made about Customer Equity and Brand Equity - how do you include them (if at all) in the valuation of a business? There are businesses who rely heavily on acquisition but put minimal effort into retention, so their customers lifecycle is extremely short and the business acquisition spending through the roof. On the other hand there are examples of brands and business with highly loyal 'sticky' customers who would rather die than switch to another similar provider (e.g. me and Trello). Now, the growth rates of these both might look similar on a flat chart. Or the income. But surely the brand loyalty should count when each of these businesses are being evaluated?
Many businesses today focus on CX exactly with that in mind - not only is it the right thing to do for the customer, it's also the right corporate move, given that customer centricity becomes more and more relevant in business valuation and attracting investment interest. From our selfish CX Product PoV of course we should leverage that and seek more collaboration with the business when it comes to customer value segmentations and analysis - there are many ways we can utilise them in our product development work.
The main argument here is: not all customers are "born equal". Even though we hear often that "it costs more to acquire new customers than to retain the ones you already have", this saying misses the point that if you have low or negative value customers then you surely wouldn't want to keep them, but instead look for better prospects? You could potentially try to grow them into higher value segments however normally each customer comes with their pre-defined propensities and abilities to spend for your particular product. Sometimes trying to force it just won't work, no matter how much rewards you offer or how good your CX is - the product might just not be right for the customer you are trying to retain or grow.
That's why it's crucial for organisations to analyse and leverage CLV - Customer Lifetime Value. Based on it, they can focus on the right segments that require the most attention in terms of retention and further customer development. Depending on the organisation's strategy, it can then utilise the best combination of offensive or defensive marketing techniques based on CLV to maximise its business.
An interesting point is made about Customer Equity and Brand Equity - how do you include them (if at all) in the valuation of a business? There are businesses who rely heavily on acquisition but put minimal effort into retention, so their customers lifecycle is extremely short and the business acquisition spending through the roof. On the other hand there are examples of brands and business with highly loyal 'sticky' customers who would rather die than switch to another similar provider (e.g. me and Trello). Now, the growth rates of these both might look similar on a flat chart. Or the income. But surely the brand loyalty should count when each of these businesses are being evaluated?
Many businesses today focus on CX exactly with that in mind - not only is it the right thing to do for the customer, it's also the right corporate move, given that customer centricity becomes more and more relevant in business valuation and attracting investment interest. From our selfish CX Product PoV of course we should leverage that and seek more collaboration with the business when it comes to customer value segmentations and analysis - there are many ways we can utilise them in our product development work.
June 17, 2021
The first third of this book is quite good. It provides a lot of examples and frameworks on how to think about the new business models centered around digital interactions and the vast array of information provided from these interfaces. There are good discussions on what customer acquisition is and how it can be framed, when a company should adopt defensive and offensive modes of customer acquisition and how targeted should these initiatives be. These explanations are all peppered by various real-life examples and anecdotes.
However, things go south by chapter 4. One is constantly reminded on how it’s important to pay attention to customers, to change the focus of enterprises from product to customer and how different customers need to be treated differently, but it adds very little to what has already being said. Also, the chapter on calculating lifetime customer value is extremely poor, providing a very, very broad outline on what you must pay attention to when trying to assess it and providing no tool whatsoever to calculate it. This is even more blatant considering that the book emphasizes that one should focus on estimating a forward looking metric, but it does not provide any insight into this.
Overall, this book is not worth your money, despite a strong start. Readers interested in digging deeper into this will be better served by podcast interviews of the author and the case studies of the author’s asset management, Theta Equity Partners.
However, things go south by chapter 4. One is constantly reminded on how it’s important to pay attention to customers, to change the focus of enterprises from product to customer and how different customers need to be treated differently, but it adds very little to what has already being said. Also, the chapter on calculating lifetime customer value is extremely poor, providing a very, very broad outline on what you must pay attention to when trying to assess it and providing no tool whatsoever to calculate it. This is even more blatant considering that the book emphasizes that one should focus on estimating a forward looking metric, but it does not provide any insight into this.
Overall, this book is not worth your money, despite a strong start. Readers interested in digging deeper into this will be better served by podcast interviews of the author and the case studies of the author’s asset management, Theta Equity Partners.
October 28, 2018
I was offered a free copy of this book so long as I read it and posted a review of it on a common site by October 31, and I’m glad I took up the offer. I had previously taken a MOOC given by a team of Wharton professors including one of the authors, Peter Fader, and both the course and this book were well worth the time. While “customer centricity” is often mistakenly perceived as a version of customer service, in lay terms it substantially refers to determining which of a firm’s customers are the most valuable and gearing products and services to respond to them, while continuing to serve other segments. This Playbook goes further and describes Customer Lifetime Value (CLV) as a valuation approach, not only to identification of potential new customers (as well as maximizing profitability of customers and customer retention) but also supports the idea of using this approach for valuation of equity, I.e., stock valuations. While this is not likely to be in widespread use anytime soon - CLV valuation methodology is rudimentary, not standardized, and not widely used or understood - it is an attractive alternative to tactical valuations as estimated by revenue growth or net profit growth. This is a quick read, about 100 pages, and could also be described as a primer on customer centricity as a marketing approach.
January 9, 2023
A great business book that makes the case for pivoting from a product-centric strategy to a customer-centric one. It is all centered around customer lifetime value as the key metric a business should care about. CLV is essentially the sum of all the money a customer has brought in and is expected to bring in the future (think net present value). CLV should be used to segment your customers on a spectrum from low to high value, allowing you to be more strategic about how you spend your resources in customer acquisition, retention, and development practices. It also pushes business owners and financial investors to use CLV as the core for company health and valuation. Several case studies are talked through in the book on how to apply customer-centric strategies, and there is some level of practicality discussed, but it could've gone a little deeper there. In all, it's a fairly light read so it definitely felt worthwhile.
November 24, 2018
There are a lot more customer-centric (in the true sense of the word Fader describes in this book) companies than there used to be 10 years ago simply because there’s a lot more customer data out there. What once was a competitive advantage soon turns into best practice which then turns into table stakes. While Adobe is building out its Customer Data Platform maybe I should buy some shares of CRM first.
Personalization is a misleading buzzword that’s putting cart in front of the horse. The more you personalize for your worst customers the more they cost you. Without value creation as the end goal and without the right metrics to measure value, no amount of personalization will save absence of strategy.
I think I went to business school prematurely. Now these topics mean so much more to me than 6 years ago.
Personalization is a misleading buzzword that’s putting cart in front of the horse. The more you personalize for your worst customers the more they cost you. Without value creation as the end goal and without the right metrics to measure value, no amount of personalization will save absence of strategy.
I think I went to business school prematurely. Now these topics mean so much more to me than 6 years ago.
December 6, 2022
The book is short and written in a very organized way. The general idea of the book that customers are different and companies are supposed to focus on those customers who generate high revenue and create the highest value of the companies. In general this idea is good and worth considering, but I believe it works only in some sectors. Also the author opposed the idea of traditional segmentation, such as demographic segmentation, I personally found it interesting, but it is still useful tool to consider for some industries.
October 30, 2018
A recommended read for marketing and customer executives who want to understand what it truly means to be customer centric, and grow with customers at a granular level.
Offers nimble yet practical strategic frameworks (packed in less than 150 pages) to better acquire, retain and develop customers, taking into account the fact that customers are heterogeneous — having different baked-in characteristics, service preferences and propensities to stick longer, buy more and refer (advocacy).
Offers nimble yet practical strategic frameworks (packed in less than 150 pages) to better acquire, retain and develop customers, taking into account the fact that customers are heterogeneous — having different baked-in characteristics, service preferences and propensities to stick longer, buy more and refer (advocacy).
February 18, 2020
Good overview of CLV. Segmentation is dead; low cost acquisition strategies are antiquated; cross and up sell tactics need a rethink. Interesting that EA is used as the darling case study for using CLV given their recent challenges with micro-transactions (Starwars Battlefront), which looked to ‘milk’ all players instead of those high value customers that had the propensity to pay.
April 19, 2020
Quick, to the point, 100 pages. I am glad the authors packed it into 100 pages and not drag it through another 100. Finished in one sitting.
While the CLV is customer centric value to you, you can also use the concept to evaluate the inverse. Evaluate your lifetime value as a supplier to your customers and increase that value by being indispensable over the years to come.
While the CLV is customer centric value to you, you can also use the concept to evaluate the inverse. Evaluate your lifetime value as a supplier to your customers and increase that value by being indispensable over the years to come.
December 11, 2020
Short, but useful read. Highlights an area that more business are starting to understand as key to overall success. Not just being customer-centric in the "surprise and delight" version that had been espoused, but in understanding the combined value of a customer including acquisition, retention, satisfaction, and costs of it all (weighted against the more standard metrics like gross profit).
July 16, 2022
Based on some podcasts, I was very interested in Peter Fader's and Rob Markey's ideas about customer lifetime value (CLV) as a basic tool for business development and e.g. company value estimation. This book managed to clarify some issues around the topic but fell short of providing proper summary of the whole topic.
June 22, 2023
COLE HAAN SUMMER 2023
- heterogeneity of customers
- balance between acquisition and retention
- CLV = customer lifetime value. build out segments based on quantifiable metrics and tailor customer experience based on customer identity.
- value customer-centric companies based on brand equity and customer equity, in addition to net income and potential value
- heterogeneity of customers
- balance between acquisition and retention
- CLV = customer lifetime value. build out segments based on quantifiable metrics and tailor customer experience based on customer identity.
- value customer-centric companies based on brand equity and customer equity, in addition to net income and potential value
February 17, 2019
Quite convincing and interseting ideas on how customers should not be looked to be all equals. However In my opinion, this book does not give it's opinion in practical terms. Left me with questions like "how should we compute CLV in non-subscription based business?"
July 16, 2019
I read this book some time ago, as getting ready to write my master thesis. I found there some really important ideas that helped me with getting everything done.
If I will follow wit my future ideas I will be for sure using the help of this book in the future
If I will follow wit my future ideas I will be for sure using the help of this book in the future
November 13, 2021
It was fine. I had to read for school, and it goes into a layer of detail on customer valuation I have no true interest in. For an academic text, as a non-marketing focused student, this book is surprisingly digestible and makes good use of real life examples to provide context.
November 28, 2018
Good book. More concrete than the previous one.
August 13, 2019
Good concepts but pretty “text-booky”.
December 2, 2019
Very recommended
A practical, insightful and easy-to-read book. Provides useful and very relevant concepts and tips for any business practitioner. Certainly recommended!
A practical, insightful and easy-to-read book. Provides useful and very relevant concepts and tips for any business practitioner. Certainly recommended!
January 23, 2020
Short and to the point. Practical application framework for the customer centricity concept. Perfect read.
February 23, 2020
Quick 100 page read with lots of charts. Some good points to ponder and think about incorporating into my work.
June 4, 2020
2020: 13
September 25, 2020
Interesting book, more focused in B2C, however the chapter 4 and 6 can have good insights and apply at B2B company’s.
January 6, 2021
A playbook based on the customer-centricity work of Peter Fader.
February 24, 2021
This was what I was looking for. Understanding that your customers are very different, and how to get the most value from the best ones.
Displaying 1 - 30 of 37 reviews