Wharton Stories

7 Ways this Mother of Two Found Balance in Wharton’s EMBA Program

Despite juggling a full-time job at Vanguard with a toddler and newborn at home, Liz Tammaro, WG’18, describes Wharton’s EMBA program as “worthwhile and doable.”

When Liz Tammaro, WG’18, found out she was accepted into Wharton’s MBA Program for Executives, she had just given birth to her second child two weeks earlier. With a one-and-a-half-year-old son, a newborn daughter, and a full-time job at Vanguard, she had two options: Go for it or defer admission for a year. She chose to go for it.

“I realized that it wouldn’t necessarily be any easier to juggle everything a year later. I decided it would be better to just pull off the Band-Aid, so I started the program with a toddler and a two-month-old baby while I was still on maternity leave,” she said.

Not only did Liz successfully graduate, but she broadened her network, made lifelong friends for herself and her family, and gained a more strategic and global perspective on business. “It wasn’t easy, but it was definitely worthwhile and doable.”

She points to seven strategies that helped her find balance in the program:

1. Build a Support Network

“This was an extended family decision. My husband was supportive, but I also needed my mom, dad, aunt, mother-in-law – everyone – on board to help take care of my kids when I was at school. In addition, I hired a nanny when I went back to work. I also had the support of my boss and team at work.”

2. Talk to Other Moms

“Before I came to Wharton, I asked the staff to put me in touch with other mothers who had been through this program with young children. I needed reassurance that this was possible. The women I talked to were very supportive and gave me advice about being organized and getting help.”

3. Reframe Your Expectations

“Wharton students are smart, ambitious and high achievers. I came into this program wanting to do my best, but I also knew that I needed to be reasonable. It’s impossible to do everything at school, work, and home at peak performance all the time so I reframed my expectations. I learned to be flexible and kind to myself.”

4. Lean on Classmates and Build Relationships
Liz with fellow classmate Laura Rivera

“I learned to lean on my learning team for support when inevitably something came up at work or home. We all helped each other out because things come up for everyone over the two years of the program. I also ended up living down the street from another mom in my class, who became an amazing mentor and friend. We carpooled each week and she provided a great support system.”

5. Talk to the Staff

“The staff are very supportive of students and get to know you as an individual. My class advisor knew I had a newborn and made sure I had a room for pumping and a refrigerator during school weekends. During the first week of school, my husband brought my daughter to me at night, so I didn’t have to pump that whole week. The program also holds events for families and is very welcoming to everyone.”

6. Organize Your Time

“I’m not a morning person or a night owl, so I would designate evenings for school work when my kids went to bed. On school weekends, I would frontload a lot of my studying on Saturday nights when everything was still fresh in my mind.”

7. Battle “Mom Guilt”

“There were times when I felt guilty for not being with my kids. I tried to mentally reframe that feeling to focus on this as an investment in myself and an opportunity to model my values in education and hard work for them. I showed them that if you have the ability and motivation, then nothing can hold you back.”

To read how Liz prepared for the GMAT, click here.

— Meghan Laska

Posted: January 16, 2019

Wharton Stories

Biology, Consulting, and Coding: How This MBA Found His Passion in Tech

Image: Yifan Chen presenting at the Analytics Accelerator Summit on November 2, 2018.
A nontraditional background has given Yifan Chen, WG’20, a unique perspective on why there’s real value in merging the worlds of tech and business.

Not every MBA has a background in neurobiology, consulting, and programming like Yifan Chen, WG’20 — but streamlining his career took walking an atypical path. After Yifan decided against medical school, he explored the financial services industry, and then enrolled in a full-time coding bootcamp. He gained some experience as a software engineer at a medical device startup before deciding to pursue his MBA at Wharton to gain an edge in the industry.

“I became interested in positioning myself as someone uniquely close to the code, but also able to see things from a higher-level business perspective,” said Yifan. “I thought that getting an MBA would be a great way to consolidate my experience and give me the time to reflect as I catapult into the next step.”

Transferable Lessons

One of the first steps Yifan took was participating in the Wharton Customer Analytics Initiative (WCAI) Analytics Accelerator last semester. He was one of two MBA engagement leads on a team of six undergraduate, graduate, and PhD students from Penn and Wharton, helping law firm Reed Smith extract meaningful insights from their time card data.

Yifan integrated practical skills he gained from consulting and engineering, while providing big-picture guidance and acting as a conceptual translator between the team and their client. He focused on making sure everyone on his team got the most out of their experience.

“Through my years in consulting, one of the most important things I learned is that understanding incentives and mastering communication are crucial for working cross-functionally,” he said. “I think that’s a skill that’s often underappreciated, but it’s extremely valuable, especially for engineers who want to explore the business side, or MBAs who want to explore the more technical side of things.”

Audience watching a presentation in a tiered classroom
Yifan with two other team members at the Summit: Linda Ye, WG’20 (center) and Sarah Dreyfuss, W’20 (to the right).

Yifan’s team applied machine learning techniques to fill in any missing or incorrect data, before analyzing it to identify areas of interest: which practice might be bringing in the most revenue, which types of work might take lawyers the longest, or looking forward, how to allocate attorney resources to maximize business value for the firm.

Yifan said the relationships he built with the client and with team advisor and WCAI faculty director Prof. Eric T. Bradlow were another valuable takeaway. Bradlow’s information session during MBA Pre-Term in August 2018 was what inspired Yifan to get involved in the first place.

“One of the things that [Bradlow] said during the Accelerator Summit was that for him, this is one of the most incredible teaching experiences,” Yifan said. “On our side, it was an incredible learning experience.”

Linking Cultures

Yifan believes his various personal and professional interests have made him something of a “relationship broker” between people. It’s a role he carries on campus as a member of the Greater China Club for Chinese international students and as a board member of the Wharton Asian-American Association of MBAs (WAAAM), in charge of interfacing with external organizations.

He sees himself positioned in the middle of those groups.

“I was born in northwest China, where there are very few people who immigrate to the U.S.,” Yifan explained. “That’s something that’s influenced me, especially as I’ve lived the past 6 years in New York City, being able to connect with some culture aspects that are more Central Asian.”

As a programming and web development mentor for conflict-affected youth in the Middle East at Re:Coded, he connected to how his mentees turned to coding to pave a future out of adversity. Yifan is currently on track to major in entrepreneurship and innovation but he maintains that being fluent in tech can be a powerful tool for anyone — high schooler or business executive.

“There’s usually little educational investment in conflict-affected parts of the world,” he said. “However, both learning to code and coding as a profession don’t require many physical resources. There’s a ton of demand for that coding skillset. And you’re not geographically limited. You can code remotely and bring value to any company across the world.”

— Gloria Yuen

Posted:

Wharton Stories

How to Gain Real-World Social Impact Experience While You’re Still a Student

All Penn and Wharton undergrads and grads can apply for the sought-after WISE Fellowship, a paid experiential learning opportunity in social impact consulting or research.

Last fall, twenty-nine students were chatting excitedly over breakfast. Recently accepted as Fellows under Wharton Social Impact’s WISE (Wharton Impact Student Experience) Program, they were celebrating this accomplishment and eager to dive in to the real-world challenges they were tasked to solve.

The WISE Fellowship (called the Social Impact Fellowship in previous years) offered them the opportunity to grow their knowledge and skills in research, consulting, and social impact — and get paid while doing it.

“As I was attending countless info sessions during pre-term, the WISE Fellowship stood out for me as it would allow me to positively impact the Philadelphia community that I was now a part of,” said Wharton MBA student Ankit Girdhar, WG’20.

Working with clients like impact investors, start-up entrepreneurs, big-data researchers, and nonprofit leaders, WISE Fellows work in small teams with other Penn and Wharton students to tackle their client’s toughest challenges. The ultimate goal? Scale their clients’ impact.

Last semester, students worked on a diverse set of projects such as:

  • Sourcing and conducting due diligence on potential impact investments
  • Supporting faculty-led research that uses big data to examine neighborhood vibrancy
  • Conducting market research for a tech fund focused on women of color and refining the fund’s investment strategy
  • Scoping the U.S. market for the top places where a decentralized water reuse tool could be impactful
  • Helping large hospitals and universities in Philadelphia increase their local purchasing

“The Fellowship gave me an opportunity to apply my coursework and past consulting experiences. I gained exposure to the challenges associated with for-profit social enterprises and the importance of a supportive community in delivering true impact,” said Margaret Fletcher, WG ’19.

Sam Brown, WG’20, adds, “As a WISE Fellow, my experience has been unparalleled and truly reflective of the path many impact investors experience.”

Each semester, a new application period opens with new projects and opportunities that are open to all Penn and Wharton students. In the spring 2019 semester (application period January 16th-30th), Wharton Social Impact will hire approximately 15-20 Fellows for seven projects. Applications are live on the Wharton Social Impact website starting January 16th. Accepted Fellows are eligible for a taxable Fellowship award ($1,000 for grad students, $12/hour for undergrads with a max of $1,500).

When asked what she looks for in applicants, WSII’s program manager Yuri Seung said, “Applicants whose skills align with the needs of the project, and those who thoughtfully articulate what they hope to learn while working on their projects really stand out.”

What kind of work would you do as a WISE Fellow? This depends on your project scope. Typically, Fellows spend the first part of their Fellowship researching their topic and reporting findings to the client. The second part is usually spent creating a deliverable based on the findings as presentation deck or a report. “We scope each project to ensure that students will have enough time throughout the semester to complete their work. Fellows who are intellectually curious and take initiative, while demonstrating good time management skills, are the most successful,” said Seung.

She adds, “It’s exciting to see students learn from social impact leaders and work with them to advance projects that have real-world impact.”

Ready to leave your mark? Learn more about the WISE Fellowship and apply by January 30th.

— Nisa Nejadi

Posted:

Wharton Stories

How a Nonprofit Can Become a “Boundary Spanner” to Help Alleviate Poverty in Philadelphia

First-year MBA student Ankit Girdhar, WG’20, reflects on his WISE Fellowship. As he learns, sometimes matching supply and demand isn’t as easy as one might think.

Coming to the lightning-speed world of Wharton and learning about the many opportunities available for students is an overwhelming experience. As I was attending countless info sessions during pre-term, the Wharton Impact Student Experience (WISE) Fellowship stood out for me as it would allow me to have a positive impact on the Philadelphia community that would be my home for the next two years.

Philadelphia is home to 34 universities and hospitals (also known as “anchor institutions” as they are the hubs of communities around them) which together spend $5.3 billion annually on goods and services. However, only $2.7 billion is currently spent in Philadelphia. At first glance, Sakib Ahmed (my WISE co-fellow) and I thought our project on procurement for these “anchor institutions” seemed like a simple supply-demand problem.

To create jobs and alleviate poverty in Philadelphia, the poorest big city in the U.S., it is essential to increase local spending by anchor institutions (such as Penn, Drexel, Einstein Healthcare System, etc.) to support local, diverse, and smaller vendors. The idea was simple enough—we would connect these anchor institutions with local firms that offer the goods and services they are currently purchasing from out-of-town.

But after meeting our project manager Mariya Khandros, Director of Shared Solutions at the Economy League of Greater Philadelphia and a Wharton alum, Sakib and I started to appreciate the nuances and complexity of this challenge. The massive anchor institutions and small, local, and minority or women-owned businesses operate in completely different ecosystems, each with a diverse set of expectations. The small businesses do not know where to even begin with the lengthy and bureaucratic process of becoming a registered vendor and the anchor institutions do not know where to look for high-quality and price-competitive local suppliers without risking the experience of their patients or students.

And in some cases, the vendor doesn’t even exist. Taking the example of medical laundry, Philadelphia produces millions of pounds of medical laundry every year which is currently sent at least 100 miles from Philadelphia, incurring much higher costs and supply chain risks. There is no local industrial laundry service large enough to accommodate this gigantic demand, so anchor institutions have no choice. On the other hand, no entrepreneur or existing smaller vendor is willing to risk building a massive facility without certainty of revenue.

Going back to the days of MGMT610, this is a perfect vacuum to be filled by a “boundary spanner” — someone who understands two different sets of stakeholders and enables cross-team cooperation.

That’s exactly what PAGE (Philadelphia Anchors for Growth and Equity) does. It is a partnership between Economy League of Philadelphia, the City of Philadelphia, and more than a dozen anchor institutions committed to increasing local spending and strengthening the local economy. Just one of their successes includes playing a pivotal role in supporting a local entrepreneur to build an industrial scale laundry service for Philadelphia hospital while generating up to 100 jobs.

Sakib and I had an amazing opportunity working with PAGE and engaging with both anchor institutions and local suppliers to better understand how to bridge the gap between the two. We helped formalize the selection and screening process for local vendors in a way that is acceptable to anchor institutions and not too burdensome for smaller businesses.

Working as a WISE Fellow has been one of my most rewarding Wharton experiences not only because it allowed me to hone my problem-solving skills and practically use concepts taught in class, but also because it helped me have a positive impact on the community where I live.

— Ankit Girdhar

Posted: January 14, 2019

Wharton Stories

Q&A with Investor Jillian Manus: How Student Entrepreneurs Can Overcome Failure and Find their Superpower

“If you can’t distill and communicate the value props of your company succinctly, then you’re not going to be able to sell the product; if you can’t say it, you can’t sell it.”
Jillian Manus is the Managing Partner at Structure Capital and serves as a guest investor on Gimlet Media’s renowned podcast, The Pitch. Back in November, the show came to Philadelphia to host their first-ever live show in front of an over-capacity crowd at Wharton’s Huntsman Hall. A week before the taping, we spoke with Jillian about her advice for student entrepreneurs, supporting entrepreneurial women, and what she considers to be a superpower.

What separates a good pitch from a great pitch?
We look for energy, and that’s really important and one of the biggest problems, because that’s the difference between good and great. Somebody can give a solid pitch with great data — but without passion, I don’t see someone who’s going to be able to fundraise, who’s going to be able to inspire a team, and be able to communicate the value and the excellence of a product. That comes from founders that have that energy and that passion, commitment, and confidence. Sheer determination. When you look at a founder you look at two things: are they unstoppable, and are they curious?

What tips you off to that when you’re listening to the first pitch?
Within five seconds, someone comes in the room, they look you in the eye, they shake your hand, and you know they’re game. Or, they look down at the floor, they mumble their words, they lack confidence, they’re scared. You can be scared, but have confidence. Because the best pitches, they’ve been people who have come in, been nervous, started a pitch, and then had to say: “Can I start again?” Be a Weeble. You wobble, but don’t fall down for long.

After you look at the entrepreneur, what do you look for in an early-stage company?
I look for a product that is a product — not a function. A lot of companies feel like they have a product, but it’s actually a function of another existing company. It has to be a stand-alone. It’s also a must to know the competitive landscape. I never want to hear “we’re the only ones doing that” because that’s not possible. So, how are you better? How do you compliment where others would leave off? What is your differentiator? And the big question, at the very beginning, is the “why.” Why are you emotionally connected to the product? That should be the opening of a pitch. And then, why should a consumer be connected to a product? What’s your story and what’s the product’s story? In early-stage companies, we are really investing in the people, not the product. The product will evolve and often completely pivot. We need to invest in the smarts and determination that will navigate all waters for the next three to five years, at least.

Jillian Manus on stage with fellow investor Phil Nadel and “The Pitch” host Josh Muccio at the live show.

What’s your advice for student entrepreneurs?
Students need experience. It’s not enough to hop out of bed one morning and say: “Time to start a company!” The number one thing you need to do is reach out to companies that you like, maybe in your neighborhood, or go online and offer your skills and expertise to help a startup build their company. I think, in the end, it’s really the experience, when people roll up their sleeves and get dirty in a company, that make them stellar entrepreneurs. Do they have operations experience, marketing experience, tech experience? Have they volunteered at nonprofits? “Do” first, then design.

Experience over classes — is that something that you would say has always been the case?
Yes, experience over classes for sure. I realize it’s a very Silicon Valley perspective, but I sit on the Innovation and Entrepreneurial Board for Fuqua [School of Business] at Duke, and I say the same thing to all of them. I say, I love the fact that you’re working on projects but that doesn’t necessity make them businesses. So, while you work on the project, look at the startup. Go reach out to some of the other Wharton alums. Find out what everybody is building in school and work on a number of efforts. If I were at Wharton, I’d be creating a site where you could list your skills and you could offer them to entrepreneurs in either the community, philanthropy, or within the school.

You’re passionate about helping women and their professional development. How can we better invest in women’s potential and success?
First, we need more women investors. We need more women in the pipeline. We need more women to start investing even tiny bits of money. And that’s another way students can get involved. I always say to students, go to a startup and say “I’d like to invest a few dollars and/or I’d like to work for free for whatever amount.”

There’s two things I always say to women entrepreneurs. One, know your numbers. And two, never lose control in any business environment. Men — especially in tech, but men in business — see women as drama. They always think women are going to lose their mind, break down in a hissy fit, start crying if you’re too tough on them, become overly emotional. I hear it all the time. So women, if you are in a situation in which you feel that you are being treated unfairly or you’re just so angry or so hurt, maintain your composure. The moment a woman loses her control, she loses her power, and the man wins.

How can men help women succeed, and how can men help female-led companies to get off to the right start?
There are a number of ways. I think it’s important to be able to assess a product through women’s eyes. Women bring a multitude of skills which men don’t have. This needs to be recognized and appreciated. I also think men need to be better listeners. They don’t always have to solve a woman’s problem. When a woman approaches with an issue, men automatically try to solve it — men need to learn to teach, rather than to solve.

What’s the question that entrepreneurs are rarely prepared to answer, but should be?
“Have you failed?” is one and “What are your values?” is the other. One of the things we talk a lot about is investing in values, not just in valuation. That’s the mantra of our fund. In our company [ Structure Capital ], we teach and instill values into the culture at the very beginning — values such as: integrity, accountability, gratitude, transparency, and humility — and that’s a big problem. I think that founders need to know their values and be able to cite at least a couple of them in a pitch, and speak to how they will instill them into the foundation of the company from the very beginning. How they’re going to build their culture is critical. Values are the foundation for 21st century companies.

Why do you think these two questions are often overlooked?
Everyone is so laser-focused on building the product that they miss two things. They miss building the culture and how to build a brand narrative. If you can’t distill and communicate the value props of your company succinctly, then you’re not going to be able to sell the product; if you can’t say it, you can’t sell it. A lot of the time, I find that entrepreneurs don’t think about the marketing, the brand narrative, and the messaging early enough. That is a very big problem.

How does your own entrepreneurial background inform your decisions as an investor?
It’s provided me humility. I know what I don’t know. When you have built as many companies as I have and failed as I have in a number of ways both personally and professionally, you create a tremendous amount of self-awareness. A lot of the problems I find with entrepreneurs is that they don’t know what they don’t know and they won’t go find out because they haven’t failed enough and are too cocky. I want confidence, I don’t want cocky. If someone is confident, they know they can rely on their own decisions and they also have the confidence to be aware that they need others to provide them intel. They don’t have to bully their answers into a boardroom; they can actually be open enough to realize that they need more help to get to a solution. Humility is a quiet ego, and being self-aware is a superpower.

— Mike Kaiser, Elis Pill, Gloria Yuen

Posted: January 9, 2019

Wharton Stories

How the Wharton Network is Adding Value for Two EMBA Alumni on Different Coasts

Although Jamey Jeff, WG’10, and Victor Belfor, WG’13, graduated in different years and on different coasts, they were connected by a Wharton EMBA newsletter that inspired their partnership to help mutual clients.

Jamison (Jamey) Jeff, WG’10, and Victor Belfor, WG’13, each came to Wharton’s MBA Program for Executives with the goal of expanding their networks. After over a decade in technology leadership roles, Jamey came to the Philadelphia program to gain the skills and contacts necessary to start and run a business. Victor came to the San Francisco program to learn more about business and make connections that he felt were missing, as his prior education was outside of the U.S. 

Victor joined Conversica as senior vice president of channel sales and business development after graduating. Jamey is now managing director of customer success solutions at the consulting firm Coastal Cloud. Both alumni say that the Wharton network has added value since graduation. This was especially the case when the two recently connected via a Wharton EMBA Career newsletter.

Jamey explained that his team was serving as an advisor for a “highly acquisitive” education technology company. The role included helping the client implement and leverage new products and technologies, including Conversica.

Around that same time, Jamey was reading the Wharton EMBA Career newsletter and saw that Victor was hiring for several positions at Conversica. “It was perfect timing! I didn’t know Victor, but I sent him an email to say that we are both Wharton EMBA alumni and should talk about possible partnership opportunities because our teams are working for a mutual client.”

He said, “When you discover a fellow Wharton graduate, you get a positive reception. When you discover a fellow Wharton EMBA graduate, there is a family aspect to it because of your shared experience – even with alumni who graduated from the program in another year or from the other coast. This was probably one of the smoothest and quickest partnerships we’ve ever set up.”

Victor agrees that the network helps to “lower barriers” because credibility and trust are instantaneously established. “It’s easier to engage because you share the same experience, you know a lot of the same people, and you know the quality of their education.”

He noted that this shared background also makes it easier to solve problems. “I’ve now done several successful projects with Jamey. When things become complicated, it is natural for us to take a problem-solving approach and constructively address the issue,” said Victor.

Victor and Jamey at the Salesforce Dreamforce conference where they presented their partnership.

The alumni were featured at the annual Salesforce Dreamforce conference as a result of the strategic partnership between Coastal Cloud and Conversica. Salesforce also created a webinar about their partnership.

“From day one, the Wharton network was an attractive aspect of the Wharton EMBA program, and it is definitely paying off,” said Victor.

Jamey added, “I graduated eight years ago, and Wharton remains one of the best value decisions I’ve made. It is an investment and a lot of time, but it was definitely worth it.”

— Meghan Laska

Posted: January 8, 2019

Wharton Stories

Two Crucial Things Student Social Entrepreneurs Need — and How to Get Them

If you’re a first-year MBA student at Wharton and you’re launching or leading a social venture, learn how the Jacobs Impact Entrepreneur Prize can help power your startup.

When we ask student entrepreneurs what it takes to succeed, they usually emphasize the same two things. No, the two essentials are not “getting more sleep” and “having more time” — although, we wouldn’t be surprised if these are needs #3 and #4. The two things student entrepreneurs tell us they need are funding to sustain the development of their venture and a network of supporters and advisors to lean on.

That’s why Wharton Social Impact is thrilled to partner with the Swiss-based Jacobs Foundation — an organization that invests in the future of young people so that they become socially responsible and productive members of society  to launch the Jacobs Impact Entrepreneur Prize.

“We are excited to see the changes and impact that Wharton MBA students will achieve with the new Jacobs Impact Entrepreneur Prize,” said Dr. Urs Arnold, the Foundation’s head of operations.

The two-year program will start with a cohort of three selected first-year MBA awardees from the Class of 2020 who will receive an initial $5,000 stipend to support their venture development. We’ll follow the journey of these three “Jacobs Fellows” as they develop, launch, and/or scale their social ventures. During their second year as MBA students, one of these three Fellows will receive additional funding of $45,000 to launch or scale their startup. A total award of $50,000 can be the catalyst needed for a student to develop their enterprise so they can make a positive social impact on the world.

But funding is just half the picture. Awardees also become part of a global network of Jacobs Fellows that they can lean on for support and advising, while expanding their community of like-minded peers. They’ll even have the opportunity to travel to Switzerland — all expenses paid — for a weeklong networking and learning session. The opportunity to be included in this diverse global community sets the Jacobs Prize apart from other programs.

“The Jacobs Prize is an extraordinary and unique opportunity to advance Wharton’s leadership in social impact and benefit from the outstanding network and reputation of the Jacobs Foundation,” said one applicant. “As a social entrepreneur and Wharton MBA candidate, I am thrilled to see my school partner with the Jacobs Foundation and excited for the long-lasting impact that this partnership will have on social entrepreneurs, on our Wharton community, and on our efforts to make our impact sustainable and scalable.”

Eager to change the world with your impact venture? Learn more about the Prize, and apply by February 1. Top candidates will be interviewed in February, and winners will be announced in March.

— Nisa Nejadi

Posted:

Wharton Stories

How This Undergrad is Tackling Energy Waste with His Social Enterprise

Turner Social Impact Society member Michael Wong, W’19, co-founded InstaHub as a cost-effective solution to combat electricity waste from building lights. He reflects on the opportunities and challenges of building a social enterprise in college.

Every day we waste energy in obvious ways, but our innate desire for convenience often stops us from taking simple steps (such as flipping a light switch off) to conserve energy. I bet you didn’t know that simply “forgetting” to turn off the lights costs the U.S. $30 billion in electricity waste and hundreds of million metric tons of CO2 every year.

Growing up in Oakland, California not only introduced my love for technology, but it has also stimulated my interest in living in a more sustainable world because it’s possible.

With the intention of getting 85% of U.S. buildings without automatic lighting to install motion sensors to combat this energy waste, my co-founder Dayo Adewole (GR’21) and I learned that the challenge is primarily a business challenge. Hundreds of facility managers told our team that it is time-consuming and expensive to remodel buildings to automate lights with existing hard-wire motion sensors.

A Solution to the Issue

Our passion for the problem of energy waste and the lack of simple, scalable innovations to make sustainability efforts more accessible without remodeling existing infrastructure led to the creation of InstaHub, the center for instant automation solutions. InstaHub is an easy to install motion sensor device that goes over any old light switch, without any rewiring.

We identified a gap in the industry and truly believe that making automation more accessible will not only address human errors in energy and offer cost savings, but it will also gradually promote more resource-conscious behaviors. The potential for positive environmental and social impact through relatively simple means is part of the core appeal of InstaHub.

Opportunities Across the Country

Over the past year, our team participated in multiple accelerators (VIP-Xcelerate, NextFab, Hult Prize, Penn I-Corps), received various grants/investments, appeared on radio shows (including Wharton SiriusXM Launchpad and Dollars and Change), and won multiple competitions including Philadelphia’s Smart Impact Award hosted by Fulphil. We also recently expanded our team.

Last spring, we had the humbling experience to surround ourselves with finalist teams of social entrepreneurs from across the world at the TCU Richards Barrentine Values and Ventures Competition in Texas. The Turner Social Impact Society’s Impact Award gave me the opportunity to attend, pitch, and connect with other social entrepreneurs.

A hand holding a brochure for the TCU Richards Barrentine Values and Ventures Competition, featuring Michael Wong giving a pitch.
Michael Wong, W’19, and his venture InstaHub featured on the brochures of the TCU Richards Barrentine Values and Ventures Competition in Texas.

As a student entrepreneur, I have many unexpected expenses that come up and funding like this makes it possible to partake in special opportunities. After learning about the Turner Social Impact Society from the Vice Dean of the Wharton Social Impact Initiative, Katherine Klein, I have since been part of this interdisciplinary community with a strong commitment to social impact on campus.

Through InstaHub, we’ve leveraged a deep network of like-minded peers to bounce around ideas, improve our pitch, and even meet with a powerful network of investors. Special thanks to David Mazzocco, Associate Director of Sustainability and Projects, and his Wharton Operations team. They have been phenomenal in supporting our work by sponsoring grant funding and invaluable pilot opportunities. David spent a Thursday evening through Monday morning with our team coaching us and watching our pitch approximately one million times.

It was a dream come true to pitch alongside my sister, Tiffany Wong (W’21), who keeps me grounded and fearless, and constructively helps me improve our pitch for InstaHub.

Words of Encouragement

Building a social enterprise in college comes with a limitless number of uncertainties, but it certainly offers an invaluable learning experience that keeps me up at night (for the better). Nevertheless, what’s a better time to do it than now? My co-founder Dayo Adewole (GR’21) and I are confident that pursuing our dream in building an innovative business as a vehicle of scaling impact can be profitable.

We encourage anyone who is passionate about an issue to believe in themselves. Always remember that businesses that tackle social and environmental challenges can be very profitable throughout many generations moving forward.

Learn more about InstaHub.

— Michael Wong

Posted: January 7, 2019

Wharton Stories

Five Ways to Better Lead Every Aspect of Your Life

How Robert Chen, WG’19, is applying Wharton’s Total Leadership Course to become a better leader in all areas of his life.

When we think about leadership, it’s usually in a professional context. We focus on how we lead our organizations, departments, and teams but rarely put any thought into how we lead other areas of our life. How are we doing in our family life, our community, our own health and well-being? Are we leading these areas or are we just going with the flow hoping things will turn out OK? Why don’t we lead these other areas of our life?

These were the questions I asked myself during Prof. Stew Friedman’s Total Leadership course. What attracted me to take this course was his concept that work-life balance doesn’t work because it implies having to make trade-offs. Instead of managing life as slices of a pie that gets smaller or bigger at the expense of each other, his approach considers different areas of your life as independent circles that can potentially overlap with each other.

This new construct helped me unlock the creativity to better optimize my life and it has transformed the way I live and work. Here are five insights I took away from the course:

1. Lead your life: Don’t use one area of your life to make excuses for another area.

Before this program, I often felt guilty about not getting home early enough to spend time with my kids. I used work as my excuse, rationalizing that now was the time to focus on my career and once I’ve “made it,” I can carve out more time for family. Along the same vein, I used my two young sons as the excuse for not exercising. I would tell myself, “How can I afford to work out if I don’t even have enough time to spend with my kids?” Then I would use the time I needed for work, school, family, and exercise to justify why I slept on average only five hours each night.

I found myself often saying how much I wanted to do these things but explaining how I couldn’t because of these many legitimate excuses. Looking back, that was a weak way of living. This experience has taught me to either do what I say is important to do or stop saying it’s important to me. Either way is fine but continuing to make excuses is not.

As part of this course, we all conducted personal experiments. For my experiments, I committed to getting 7+ hours of sleep, getting home before 7 p.m. during most of the work week, and exercising daily, which included running twice a week. I was initially skeptical since I’ve had so many false starts trying to implement similar positive habits but I’m excited to share that, so far, I’ve not only sustained these habits, but I just completed my first half-marathon after never running a race in the past.

What made the difference this time was clarifying the vision I wanted for my life and taking control to bring that vision to life. Essentially, leading myself to where I wanted to go.

2. Sleep really matters.

I was lucky to choose to sleep 7+ hours as one of my experiments because there was no other habit change that yielded faster and more drastic results. I used to subscribe to the “you can sleep when you retire” and “I’m successful because I work harder and longer than everyone else” mantra. I’m beginning to see the fault in this thinking and realizing that I may have spun my wheels more often than I am aware of or care to admit.

After consistently getting 7+ hours of sleep, I noticed my mood becoming more positive and relaxed. What surprised me the most was that I immediately stopped craving coffee (I was drinking about 2-3 cups a day for the last few years).

I also found sleeping sufficiently is a linchpin habit. The days when I was well rested, I almost always completed every other habit change along with my work and school goal for that day. It allowed me to exercise more self-control and discipline.

3. Create constraints to force creativity.

Forcing myself to get home early, sleep enough hours, and exercise daily meant taking time away from other areas of my life, especially work. Initially, I was worried I wouldn’t get my work done leading to adverse consequences. What I found instead was the most important work was still getting done and since my deadlines were tighter, I became more effective with my time. Having less time for work began to prevent me from over-engineering my work and school projects.

It also helped me to be more creative about my time. Instead of agreeing to drinks or dinner with a client, I would offer to meet for breakfast or lunch, so I can keep my commitment to get home early. I started running and working out with other people as a great way to catch up with them. Interestingly, by creating constraints and forcing myself to keep these new habits, the quality of my life has increased at home and at work.

4. Be the building block for other people’s goals.

One of the key exercises in the Total Leadership process was to set up conversations with the most important stakeholders in the different areas of your life. The goal is to ask your stakeholders about their expectations for you and how you’re doing in meeting those expectations.

Holding these conversations, I realized that I often see people around me as building blocks to my success and drive our interactions in the direction of my agenda and accomplishing my goals. Hearing people’s expectations of me have made me realize that other people have their own needs and aspirations and to create long-term, positive relationships with them, I need to be the building block for their goals and success.

If you want people to see you as a leader, they first have to recognize that their life will be better because they follow you. There is no better way to do that than to become a critical part in their quest for success and meaning.

5. Grow the relationships you take for granted.

Every year I have clear goals to improve and to grow my career. It seems like the natural thing to do. What’s interesting is when I reflect on my closest relationships, I don’t have the same aspirational tendency. I don’t think about growing these relationships and at best, the relationship stays where it is. The only time I pay attention is when the relationship gets strained and I spend just enough energy to get it back to the original level.

Applying the same growth mentality from my career to my personal relationships, I asked my wife, family, and others close to me what we needed to do to take our relationship to the next level. Just by having these conversations, my key relationships are beginning to thrive and grow and it’s having a positive impact on other areas of my life. When you ask people about their needs and truly listen, they often become open to sincerely understanding your needs.

I came to Wharton to pick up the skills needed to succeed in business and am graduating with skills to help me succeed in life.

Posted: January 2, 2019

Wharton Stories

Customer Centricity: Why Companies Should Play a Long Game Strategy

“We’re not going to judge ourselves by the least happy customer. We’re going to judge ourselves by the most valuable customers.”

One of the bigger mistakes that retailers can make today is to believe that consumers are all the same. In reality, the individual needs of one person will most likely be different from many others. Luckily for consumers, more companies are adopting a more customer-centric approach, but many are still trailing behind. Prof. Peter Fader and Sarah Toms look deeper at this opportunity and provide action steps for businesses in a new book — The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value.


Listen


Interview Highlights

On focusing on the most valuable consumers

“Not all customers are created equal. We’re not going to be everybody’s best friend and there are going to be some haters out there. We’re not going to judge ourselves by the least happy customer. We’re going to judge ourselves by the most valuable customers. EA — beyond just EA Sports — but in all of Electronic Arts has come to realize that there are some incredibly valuable customers out there. It’s impossible to turn everybody into someone like that. They’ll continue to face a lot of backlash from people who don’t like particular features of particular games but in many cases, that’s okay because they’re not that valuable to the company. Now they don’t want anyone to be unhappy, but they realize that by focusing more on the right kinds of customers, the right kinds of players, they can do much better than just kind of playing it right down the middle and trying to be, you know, pretty good to everyone.” — Peter Fader

On customer service

“What Pete and I actually believe is customer service is akin to clean toilets. It’s pretty controversial when we say this in front of a room of executives or others. What we’re saying is you’re actually playing defense with your lower value customers. Your other programs, those such as loyalty, your strategic account managers, and others, you want to really make sure that you’re tuning those strategies to your specific value of the customer.” — Sarah Toms


The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value


On multidivisional brands

“You know, it’s a really interesting time for retailers and business in general. That, on one hand, you get a lot of these narrow, digitally native brands and they’re tightly focused on one kind of customer. And while they might do very well there, until you can cross over and attract a broader variety of customers you’re never going to find kind of the world-class success that investors might demand. On the other hand, you look at a Gap or any kind of multidivisional company and sometimes they’re spread out a little too thin. So finding that just-the-right balance where we can have multiple touchpoints with multiple customers and not treat them in separate silos, but actually learn from them. To have the breadth of a customer base that’s going to help us understand each and everyone a little bit better than if we were just a single brand company.” — Peter Fader

On offering a premium option

“One of the concerns that we often hear is: ‘We’re going to really upset customers by having something like a premium service.’ And what Pete and my point is — don’t worry about that. LinkedIn is a great example where they’ve been able to drive a tremendous amount of revenue by offering a premium service. You think about Amazon Prime, you think about others, and this really is an opportunity to figure out what value are you leaving on the table that you can actually extract and make these customers even more valuable.” — Sarah Toms

On avoiding customer acquisition addiction

“We bring it up in our discussion of acquisition addiction. There’s a lot of companies that for a variety of reasons think: ‘We just got to bring in as many customers as possible!’ Either under the misguided belief that they’ll turn all of them into wonderful customers by educating them and building great relations with them or under the similarly but different naive belief that investors are only looking at top-line revenue and if we just bring in dollars — ka-ching! But if you’re bringing in a lot of customers who only buy once and they don’t stick around, then that’s not so good and that’s exactly what was happening with Blue Apron and with other companies that we’re willing to call out. It’s really important to look at the relationship, not just the faceless, nameless customers. How many people are you acquiring? And how often are they then buying again with you?” — Peter Fader

Transcript

One of the bigger mistakes that retailers can make today is to believe that consumers are all the same.

The individual needs of one person will most likely be different from many others. Luckily for consumers, more and more companies are recognizing this issue. Unfortunately, not all do.

Wharton’s Peter Fader and Sarah Toms look deeper at this issue in a new book that they have collaborated on. It’s titled The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value.

Peter is a Professor here at The Wharton School. Also with us is Sarah Toms, Executive Director and co-founder of Wharton Interactive.

Dan Loney:
Peter this has been an area that — customer centricity — that you have worked out for a good amount of time now.

Peter Fader:
I’ve been looking at it, I’ve been shouting about it, I’ve been doing research on it, I’ve been talking to a lot of companies about it. When I first started down this path around ten years ago, a lot of it was dismissed. “We have a product to sell. Yeah, we’ll be nice to the customers, too. But it’s all about the product. Well, that is clearly changing and it’s great to hear companies talking more and more about recognizing that not all customers are the same. Realizing it’s an aspiration for them to treat different customers differently. This new book is to turn that aspiration into action. And as you said in the title, it’s how to implement strategies that are taking these ideas and bringing them to life.

Dan Loney:
Sarah, the interest that you bring to this topic comes from where?

Sarah Toms:
My interest really started — I was an entrepreneur myself for over ten years and read Pete’s book before I even met him — when I took over the Learning Lab about five years ago. I actually have a new title now and a new team. It’s Executive Director of Wharton Interactive and working through and creating a simulation is where we really began our collaboration. So, it was taking decades of marketing research and we actually had to create artificial customers. How do customers act? How did they perform? And looking if you’re making decisions as a business and investments in your customers and how you acquire, retain, and develop them. What happens? How do you drive value?

Rachel Kipp:
Now Pete, in your previous book you mentioned that some of the companies — if you asked someone on the street: “What companies are most customer centric?” They may something like Starbucks or Nordstrom. Any mention in this book, too, that those companies may not be as customer centric as we think, but now they’re doing better. So, could you explain that?

Peter Fader:
Yeah, I don’t take credit for what those companies have done. But it’s great to see those are two really good examples of companies that were touted for just having, just kind of a nice atmosphere. It was, you know, customer friendly which is a fine attribute. That’s different than understanding each and every one of your customers at a granular level and using that understanding to really drive differential treatment of them. But it’s great to see how those two companies, among many others, have come along really far since I wrote my first book about of about five or six years ago. Things like loyalty programs, things like using knowledge of the customers to drive decisions about what products and services to offer instead of just doing them because they thought it was a good fit with the other things that they did. So, lots of other companies have been waking up, some of them doing it out of opportunity, like you know, “Hey, there’s money to be made by understanding these differences.” Some doing it out of desperation because they’re looking at big bad Amazon breathing down their neck and they know that they need to do something different. But whatever the reason, it’s great to see companies starting to move in this direction and I think they’ll be the first to acknowledge they need a little bit of guidance and that’s our job.

Rachel Kipp:
Now one of the things that you both advocate for in this book is the power of a simulation. And Sarah, this is something you do in your job. So, can you talk a little bit about how both of you use simulations and how companies can kind of take a cue from that?

Sarah Toms:
Sure. So, here at The Wharton School we have a rich culture — teaching and learning culture — based in experiential learning. So, Wharton students have about 20,000 student place per year that our various simulation teams are supporting here and what we’re really looking to do is bring the theory to life. So, what our faculty have been working on in their research and figuring out how to build compelling simulations so that our students can actually experience what it’s like to make decisions in that sort of environment. It’s really been an amazing experience here. And then getting to collaborate with Pete and taking all of his research and bring that to life in simulation as well.

Peter Fader:
So, here’s my take on it. I have a full semester course, I’m teaching all this customer centricity stuff. Let’s read about it, let’s talk about it, let’s look at case studies and so on and at the end I’d have this brief, little simulation type thing I developed it in Excel. It was a nice idea but it didn’t do justice to the richness of the material and that’s why I turned to Sarah and said, “Let’s build this thing out in a way that would be appropriate for an institution like Wharton and to really make it compelling, to really not dumb down the ideas but to bring them out in in their full complexity.” And what happened is that simulation instead of just being the capstone — kind of the cherry on top of the cake at the very end — became the real driver and now when we do an Executive Education [course] instead of using it as a little wrap up we use it as an intro. Let’s just throw people into this customer centric world and have them make decisions and so on. And then along the way we said, “You know we need to give them some support material so that they can do this and better and all learn from it.” And that was the real genesis of the book — how to really cope with a customer centric world whether it’s similar to one or a real one.

Rachel Kipp:
Now if I’m a company and I’m trying to build a simulation or even build the data stack to start doing this sort of thing. Where do you start? I mean what kind of things would you look at to start?

Peter Fader:
It starts at the end. Well, the end of the title, that is — customer lifetime value. Both from a conceptual standpoint as well as a practical one. If I can pull out my magic wand and wave it and see the future value of each and every customer I would run my business differently. I would recognize that there’s different value to be gained [from] different kinds of customers and that would drive the decisions. That’s what I’ve been saying for a long time, but again it’s been kind of aspirational. Now we’re really bringing it to life both in the [simulation] and in this book — to be able to say, “How do you do all that?”

Sarah Toms:
Yeah and what we really looked at when Pete and I began to collaborate on the simulation is understanding the trade-offs that need to happen in the real world. So, we’re obviously not giving our students the unlimited budget. They’re having to decide — “Okay, when I’m looking at acquisition strategies and tactics, when I’m looking at retention development, I have a CRM which is giving me imperfect data. How do I actually put all of this together and then make these decisions in a very realistic way? What I’m really proud about with the simulation is that it actually stimulates down to the customer level. They are being born and dying. The model underneath it. So, to your question: it’s incredibly complex and very difficult. The simulation itself took Pete and I years to develop and has become now one of our most popular offerings here at The Wharton School.

Dan Loney:
But how important is that with the successes that you’re seeing in working with some of the students? How important is that to now maybe even to get that out there in the public and working even closer with some of these companies for them to understand the mistakes that they may be making right now that are costing them customers?

Sarah Toms:
Yeah and that’s exactly the goals of the new team that I’ve co-founded here at The Wharton School. Wharton Interactive is about taking this thought leadership that we’re creating here at Wharton and offering it to the world. So, that is exactly the goal of this new team.

Dan Loney:
One of the companies you also mention in the book is EA Sports. I wanted to bring up because, I guess, they’re an example of a company that was so far to one side on the negative. Yet they have come back so far the other way on the positive.

Peter Fader:
Maybe they’re both at the same time and that’s the beauty of it. Not all customers are created equal. We’re not going to be everybody’s best friend and there are going to be some haters out there. We’re not going to judge ourselves by the least happy customer. We’re going to judge ourselves by the most valuable customers. EA — beyond just EA Sports — but in all of Electronic Arts has come to realize that there are some incredibly valuable customers out there. It’s impossible to turn everybody into someone like that. They’ll continue to face a lot of backlash from people who don’t like particular features of particular games, but in many cases that’s okay because they’re not that valuable to the company. Now they don’t want anyone to be unhappy, but they realize that by focusing more on the right kinds of customers, the right kinds of players, they can do much better than just kind of playing it right down the middle and trying to be, you know, pretty good to everyone.

Rachel Kipp:
You actually use in the beginning of this book, you use Michael Phelps, the swimmer, as an example of the adage that what you say is “good customers are born good.” Can you explain that a little bit and also I mean is it always that clear? I could look at Michael Phelps and think, “yeah he’s probably a pretty good athlete.” But is it always that clear who the best customers are?

Peter Fader:
Well, for one thing Sarah and I are both very avid swimmers. The difference is that she was born good, I’m not. It was kind of a very natural metaphor to use and I give Sarah all the credit for first coming up with it. Maybe it is a little bit of an extreme, but I think it gets the point across really well. When it comes to sports, you know, some people clearly are born good and you know you’ll never become that — at least I know I’ll never become that. When it comes to customers we often, we think we have more control.

You know, we talk about CRM — customer relationship management — as if we think that we can manage and create customers. We don’t have nearly as much control and maybe that point’s a little bit too extreme but I think it gets it across pretty well.

Sarah Toms:
Yeah, exactly. So, with Michael Phelps, and we do make this point in the preface, it’s easy to tell he’s good because… you just look at his time. It’s not even just looking at him, look at the time. And customer centricity really is about the long game. So, what we are asking for and what our goal in writing this book was really to hit the reset button. We hear the words “customer centricity” all the time and mostly they’re incorrectly stated. And we also wanted to draw and provide a playbook for how to actually enact a customer centric strategy from the standpoint of, how are you going to recognize who your best customers are? Looking at your CRM, looking at what insight you want to do and then running your different tactics in a way that are tuned to the value of your customers understanding that you can’t only have high value. You need actually the compliments of your lower value in your mid-tier customers, but what are you going to do for them once you’ve gained them?

Dan Loney:
You also take that a step farther. You also have to take it to the point of companies, of organizations that have multiple brands underneath them. You mentioned Gap, Inc. in the book and the fact that they have Old Navy and Athleta and Banana Republic and being able to understand, I guess, the customer within that realm but the fact that they may be crossing over to a variety of different brands as well.

Peter Fader:
You know, it’s a really interesting time for retailers and business in general. That on one hand you get a lot of these narrow, digitally native brands and they’re tightly focused on one kind of customer. And while they might do very well there, until you can cross over and attract a broader variety of customers you’re never going to find kind of the world class success that investors might demand. On the other hand, you look at a Gap or any kind of kind of multidivisional company and sometimes they’re spread out a little too thin. So finding that just-the-right balance where we can have multiple touchpoints with multiple customers and not treat them in separate silos, but actually learn from them. To have the breadth of a customer base that’s going to help us understand each and every one a little bit better than if we were just a single brand company.

Rachel Kipp:
You have a pyramid in the book and at the top we have the platinum customers and the bottom we have, what you call, the lead customers. Now I think it’s probably pretty easy to figure out like what to do to make the lead customers happy because they have a pretty low bar. You give me a sale, if you super-size me — I’m happy. But what about those platinum customers? I mean, how hard is it for companies figure out what those platinum customers want? How to make them happy and cultivate them so they continue being your best customers?

Sarah Toms:
That’s a great question, actually goes to the root of that entire chapter where we take it to the next step with the 2×2. And so, it’s first recognizing the value — where your customer sits on that pyramid and second, how are you going to direct those specific tactics to them? So, looking at your lower value customers and are you running offense or are you running defense? A lot of folks will look at something like customer service and they think, “Well, now we’re starting to call it customer experience, we’re starting to call it all these new-fangled words.” What Pete and I actually believe is customer service is akin to clean toilets. It’s pretty controversial when we say this in front of a room of executives or others and we say, “Look, you know, they expect when they pick up the phone that they’re going to have and this is your low value and your high value.” What we’re saying is you’re actually you’re running offense for your lower value customers. Your other programs, those such as loyalty, your strategic account managers, and others you want to really make sure that you’re tuning those strategies to your specific value of customer.

Peter Fader:
But then at the high end, as you mention Rachel, there’s a lot of companies that once they see the value of the customers, they see these high-end ones and they say, “Oh! We need to be their best friend. We need to be talking to them all the time. Are you happy? Is there anything wrong? Can we give you a glass of champagne? And they actually start annoying them. So, you have to find ways to maintain and enhance that value but without doing it in an intrusive way and so one of things we point out in the book is the idea of a “premium service.” Let them be part of the special club and give them access to different kinds of products and services that others just don’t have access to and they’re probably willing to pay for that. It’s recognizing the difference between that and just kind of, you know, low-end customer service but understanding at what time and for which customers are you going to be using one tactic or another.

 

This is Knowledge@Wharton here on SiriusXM 132 Business Radio powered by The Wharton School. Dan Loney and Rachel Kipp inside our studio with Peter Fader and Sarah Toms, who are the authors of the book The Customer Centricity Playbook. Your comments are welcome at 844-WHARTON, 844-942-7866 or if you can’t get to your phone, you’re more than welcome to send us a comment on Twitter: @BizRadio132 or my Twitter account, which is @DanLoney21.

 

Sarah Toms:
Yes, I wanted to pick up on that premium and one of the concerns that we often hear is, “We’re going to really upset customers by having something like a premium service.” And what Pete and my point is, don’t worry about that.

LinkedIn is a great example where they’ve been able to drive a tremendous amount of revenue by offering a premium service. You think about Amazon Prime, you think about others, and this really is an opportunity to figure out what value are you leaving on the table that you can actually extract and make these customers even more valuable.

Dan Loney:
You mention as well the fact that you have that relationship with the customer but also this will drive some of the other things that companies will do — their marketing, their customer service, there’s a variety of different elements that kind of spiderweb off of this as well. Correct?

Peter Fader:
It’s a really important point that customer lifetime value isn’t just about figure out which message to send to which customer [at] which time. It should be a corporate-wide strategy. Should be tied in to not only with marketing but also with finance and sales and HR and everybody in the organization should be thinking along these lines. Who are the best customers? What is it that we could be doing with and for them to enhance and extract some of that value? It’s much more than just some kind of marketing flavor of the month.

Sarah Toms:
Really bringing it back to the playbook, when Pete and I were laying out how we wanted to, you know, construct this and thinking about the different functional areas within a company, Pete’s absolutely right. You know, we have a chapter directed specifically at finance, we have a chapter directed specifically at technologists, you know, this really is about bringing everybody together and thinking about CLV in a universal way and how each of those different functions are going to leverage that information or support the strategy behind providing that information.

Rachel Kipp:
Pete, you’ve done a lot of work considering value of customers when you consider corporate valuation. Now, what do you think that’s getting at that our current ways of valuing companies are not getting at?

Peter Fader:
#CustomerBasedCorporateValuation. Yep, that’s a big thing I’ve been working on right now both in a lot of my academic research as well as this new startup, Theta Equity Partners.

It’s been fascinating to work with CFOs and VPs of investor relations and get them on board with this idea of customer equity. What’s the value — the future value — of all of our existing customers? And using that, first of all, for corporate valuation to say: “This is just a different perspective to see what this company is worth.” But then once you have credibility on that to then throw it over the fence and then let the markers figure out which emails they should be sending to which customers. So, it’s been a great way to create that kind of alignment and to get people in the organization who might hear this kind of, you know, cross functional blah blah and dismiss it to say: “No, there really is something here for me!” It’s been just wonderfully successful for me and my students and others I work with and enlightening for companies.

Rachel Kipp:
Now, one of the examples you give in the book is of Blue Apron which was a company that looked amazing from one perspective, but then when you looked at it from the customer valuation perspective something else emerged.

Peter Fader:
Exactly. We bring it up in our discussion of acquisition addiction. There’s a lot of companies that for a variety of reasons think: “We just got to bring in as many customers as possible!” Either under the misguided belief that they’ll turn all of them into wonderful customers by educating them and building great relations with them or under the similarly but different naive belief that investors are only looking at top-line revenue and if we just bringing in dollars — ka-ching.

But, if you’re brining in a lot of customers who only buy once and they don’t stick around, then that’s not-so-good and that’s exactly what was happening with Blue Apron and with other companies that we’re willing to call out. It’s really important to look at the relationship, not just the faceless, nameless customers. How many people are you acquiring? And how often are they then buying again with you?

Dan Loney:
Now let me ask you a question. Obviously, a lot of this is involving the companies themselves, but are there elements of this that really consumers can get a better understanding of what is going on with the retailers that they deal with? I mean, there’s probably some points that really can resonate with people that are listening to us out there.

Peter Fader:
It’s a really important point because customers understand that they’re going to be treated different from each other. You know that when you’re sitting on an airline that you paid a different fare than the person next to you. That should become more the norm. That again, it shouldn’t be just lowest common denominator marketing. It should be that, you know what, I’m going to be treated differently based on my value to the firm. And so, part of it is we’re not only legitimizing those ideas were giving firms specific instructions of how to do it and how to communicate it.

Sarah Toms:
Actually, that is such an interesting question and I hadn’t really thought about it from the perspective of the customers themselves. I think, though, we brought this out in the story about Best Buy. And really thinking about the motivations of the people who were standing in the aisles and then taking their business elsewhere. Then as soon as the company understood that actually those customers really did have potential to stay and it was really unlocking why and how to get them to become high value customers. The potential was there but because of things like price and not actually bringing to bear the service that these customers needed, they were losing that opportunity and once they understood that they then were able to tap into the potential lifetime value of otherwise customers who were literally walking out the door.

Posted: December 20, 2018

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