Customer Equity Accelerator Podcast

Ep. 13 | Customer Centricity Simulation

What would the differences and similarities be between traditional market valuation and customer lifetime valuation strategies for your organization? Sarah Toms, Senior Director, Wharton Interactive, talks about leveraging education technology to bring theories to life. The Customer Centricity Simulator is about putting the customer lifetime model into practice in a risk-free environment, allowing participants to gain a full understanding of this dynamic process.

Want a chance to participate in the Customer Centricity Simulation? Sarah will be onsite at the Customer Centricity Conference May 17-18 in San Francisco to run the simulation. Teams will work through nine rounds of decisions - at the end, the team that builds the most company equity wins! Register your team of five for a special price. See the full transcriptView all episodes.

 

If you want clearer insights from your data, check out how we can help:

Ambition Data Services

CLV Model Example

Marketing Reporting Example

Ep. 14 | Delivering Massive Value with Analytics Ep. 12 | Calculating CLV with Artem Mariychin

Show Transcript

Allison Hartsoe - 00:02 - This is the Customer Equity Accelerator, a weekly show for marketing executives who need to accelerate customer-centric thinking and digital maturity. I'm your host, Allison Hartsoe of Ambition Data. This show features innovative guests who share quick wins on how to improve your bottom line while creating happier, more valuable customers. Ready to accelerate? Let's go!

Allison Hartsoe - 00:35 - Welcome everyone. Today's show is about the customer centricity stimulation and along those lines a little bit about experiential learning and to help me discuss this topic, I have invited Sarah Toms. Sarah is the senior director at Wharton Interactive. Sarah, welcome to the show.

Sarah Toms - 00:53 - Thanks for having me. Allison.

Allison Hartsoe - 00:55 - Sarah, tell us a little bit more about your background and how you got into experiential learning and what that might really be at Wharton Interactive. I'm not sure what that everybody would understand what that is.

Sarah Toms - 01:09 - I've had over two decades experience in the technology field starting really with my own startup back in the 90 days and then worked for a big Pharma Company and really when I was looking for something new to get my brain around, I noticed the job person for director of Wharton's learning lab and it just really grabbed my attention. Something that I always felt as a parent and somebody who'd come through education myself is that know education really is stuck in the dark ages in many ways and after getting talking during those initial interviews and conversations with the folks here at Wharton was just intrigued by what they're doing and experiential learning, gaming simulations, etc. And was just delighted when they selected me to be the director of this team.

Sarah Toms - 02:04 - The learning lab was started in the late nineties and so has really shifted and helped to bring about culture here at Wharton. Within the teaching and learning space. Have a lot of putting theory into practice and really getting to go through simulated play. So I ran the learning labs for five years. It was just a tremendous experience. When I started, we had about 4,000 student plays here at the Wharton school a year. Yep.

Allison Hartsoe - 02:37 - I think that's a lot. But what percentage of the student population roughly would that be?

Sarah Toms - 02:40 - So 100% of our students play at least one of our simulations. So when I started it was 4,000 student plays a year. When I left the learning lab at the end of last year we were up to 20,000, so we were able to really add a lot of new experiences. We're able to, you know, create more for students here and really penetrate more of the curriculum.

Allison Hartsoe - 03:02 - Very nice. Very nice. So it's clearly a method that you've found to be really modern and respond to the modern student. I thought it was interesting what you said about education being in the dark ages. Can you just compare and contrast that a little bit for us to help us understand what experiential learning is today versus what we might have all grown up with?

Sarah Toms - 03:26 - Yeah, absolutely. This is really leveraging technology in many ways and a lot of the patterns and pieces that you can leverage it in a technology interface. So that's brilliant. Adaptive learning to life, it's bringing project-based learning to life. It's really able to put teams together or students into teams so that they can work alongside one another and learn from each other. Um, and it, it's thinking about how we can flip classrooms, how we can also make it more learner-centered rather than faculty or teacher centered. And so really being able to leverage simulations, you're able to bring a lot of those different pedagogies to bear. So that's really what it, you know, what it means.

Allison Hartsoe - 04:12 - Very nice. Very nice. And so when you say learner-centered, not teacher centered, an example of teacher-centered might be, I'm sitting in a classroom with a person directing me at the front of the room and learner-centered might be I'm working through problems that the teacher has queued up or had. I'm not sure I'm explaining that clearly, but maybe you can help.

Sarah Toms - 04:36 - Exactly. You're exactly right about teacher centered where that's more of a passive learning experience where the students were sitting. Of course, they're raising their hands. Hopefully they're getting opportunities to ask questions and share their own experiences, but it very much is faculty-led, and we think that more passively a great example as you know, you're taking an architecture class and you're having described to you a five-column building with x, y, and z happening as far as the architecture does. Wouldn't it be a way better way to learn about that architecture to actually go and see it for yourself and actually put the whole piece together? So in the learning context, that's what we're trying to do with simulations. We're trying to take complex ideas and learning objectives and really keep them together and see how they all interplay when you're thinking about strategies and tactics and your tradeoffs that you have to make when you, let's say have a budget or you know, just a certain number of resources that you were innovation that you can do sense with.

Sarah Toms - 05:34 - So it really from the standpoint of letting the students roll up their sleeves and see all of the theory that the faculty is talking about come to life and then also fail in a safe way. So you know there are going to be failures, and we'd look at those as opportunities to learn

Allison Hartsoe - 05:55 - spoken like a true educator.

Sarah Toms - 05:58 - Yup. Absolutely.

Allison Hartsoe - 06:01 - Great. Great. Now I imagine there's lots of research behind this. I mean in addition to what you've seen, there's probably a ton of research that basically says that this type of active learning experiential learning really helps the theory stick

Sarah Toms - 06:17 - Absolutely, and this is something that my team is incredibly interested in continuing where we're starting to get into augmented reality and seeing the impacts of bringing a. Yup. Yup. Absolutely. Seeing the impacts of bringing AR into the education space, when you start overlaying information, what are the impacts on memory, on curiosity, on creativity? All those pieces are very interesting to us and as part of that, this research project that we're starting to kick off, we have research assistants on our team who's been looking into all of the research that's already happened to date in the field of simulations, experiential learning, active learning and how those impact curiosity, creativity, and memory retention. You name the field of education, whether it be the social sciences, English, educate, you know, you name it, active learning and simulations or are showing a huge impact. The medical field, in particular, is definitely leading the way.

Allison Hartsoe - 07:17 - Okay. You've just single-handedly made me want to go back to school.

Sarah Toms - 07:23 - Yay. Mission Accomplished.

Allison Hartsoe - 07:26 - Okay. Let's talk a little bit more about the customer centricity simulation and could you give us maybe an overview of what it is and what I might learn?

Sarah Toms - 07:35 - Absolutely. So first of all, I need to do a huge shout out to professor Peter Fader who really is the godfather of the stimulation, and it was really for me, it was one of my first projects here at the Wharton school where I created a simulation from scratch. Like a lot of the work I was doing before was building on the shoulders of giants and this one really was the first one that I was doing, just greenfield, which is very exciting and for what he was really looking for was a capstone experience that brought everything from his customer centricity course that's taught here to MBA students and executive MBAs brought all that learning together from the entire semester and let the students exactly as I described earlier, let them really roll up their sleeves and come to understand everything that he had been talking about from the standpoint of acquisition, retention, development tactics, strategies, tradeoff customer relationship management, just culture, organizational culture, you name it, and so that really over the course of two and a half, three years, he and I have been creating this just incredible experience together.

Allison Hartsoe - 08:47 - Very nice. I have taken that course, and when I took it, it didn't have the capstone and I can tell you for a fact that participation in that simulation really does lock in all of the concepts because just like you said before, it's a safe learning environment, but you're actually doing things dynamically on the fly and seeing the impact which is almost like you just can't do that anywhere else.

Sarah Toms - 09:20 - but once you start scratching below the surface, the complexities and all of the different decisions and as I mentioned, the trade-offs and all those elements really just starts to come to life. And it's very true to real life. This is exactly what we have to do when we're thinking about bringing these innovations and how we think about marketing and sales and the value of our customers into our organization, so some of the pieces that I'm really proud of, the innovations in the simulation, the underlying model actually create down to the customer level data. So each customer we are tracking dozens of characteristics about them, so based on decisions being made by participants, these customers are either born, and customers are leaving or dying, and all of that data is available in the interface for participants to download and really explore even further. So there's a lot happening in the simulation interface and then also within these just incredibly rich downloads the data.

Allison Hartsoe - 10:23 - That's fantastic. You don't often have that. I think we're all used to seeing information at a product level or even sales that are really cut by the product level, but understanding it at the customer lifetime value level is really the point, and that's designed to get our thinking to go in that direction. So thank you very much for calculating it that way.

Sarah Toms - 10:45 - Absolutely, and one thing I should make is we really do track how students are doing based on traditional market value calculation, you know, this is based on David Wesson's work and so really seeing the interplay and kind of the. Sometimes we see the correlation between customer lifetime value and customer equity is, is really close sometimes the differences and really that middle ground and where those similarities and differences are between traditional market valuation versus customer lifetime valuation. That's where a lot of great conversations happen

Allison Hartsoe - 11:21 - and that's really the goal of the game is to drive the market valuation.

Sarah Toms - 11:25 - Absolutely. Yep.

Allison Hartsoe - 11:26 - Right, right. You find the simulation, I think, I don't know how many times, probably 100 times or more. Can you share any examples of what people or companies have gotten out of the game? What did they feel was the impact?

Sarah Toms - 11:40 - So we played it with banking customers and social media customers and large cruise line customer cruise line, uh, manufacturers and things like that. And it really truly is incredible to me just how relevant this game is to every industry that we have shown It to and that we've played it through with. And that includes obviously our MBAs and our undergrads here at the Wharton school as well. So one of the first pieces is the term customer centricity itself. A lot of people think that that just means being customer focused and had great customer service and really one of the first things that the simulation helps demonstrate that it's actually a really robust evidence-based marketing science approach to how you go about your strategies and tactics within your organization with respect to customer acquisition and retention and development.

Sarah Toms - 12:39 - So moving them beyond that. This is just about CX or customer experience or customer service and really thinking about more of a 360 approach to everything they need to have in place. And so what we've done with the simulation is we've really put the participant players in the driving seat of all of the decisions for branding investments for their ed, their sales channels, with multiple acquisition channels that they need to think about their customer service and then all of the strategic decisions they need to make about developing their CRM as well to help kind of shine more light on their customer data to help make even better investment choices. So what I would say is just the aha moments coming out of the full day, the six, eight hours experience. It's been transformational for a lot of these audiences. So, you know, I've got some amazing specific examples.

Sarah Toms - 13:38 - I don't know if I can share specific customer names and things like that, but things were literally my jaw kind of hit the ground and just hearing the impact on how r and d was going to be changed within an organization to think more about customer value and really thinking about manufacturing their products to match who their most valuable customers are and to really shift what the organization is doing in that respect. That's probably been one of the most amazing pieces of feedback that I've had after one of these programs.

Allison Hartsoe - 14:10 - Now when that aha moment comes, is it generally about all customers or are they thinking about specific classes of customers that suddenly become more impactful to them?

Sarah Toms - 14:22 - Yes, and that's exactly right. What the simulation is fantastic and doing is really showing folks how to think about the heterogeneity within their customer base and not just the heterogeneity concerning customer lifetime value today, but how that shifts and changes over time because you're playing the simulation over nine fictitious periods. What one customer is doing today could be completely different as you go through the simulation. So to your question there, Allison, absolutely you're learning to really understand how to segment and then how to tailor your tactics and your strategies to those different sets of customers based on their value

Allison Hartsoe - 15:04 - to really learning to kind of target tailor and flight and understanding it is a dynamic process.

Sarah Toms - 15:10 - Absolutely, and what my, as I said, what might be true today with what you're doing may not be great for tomorrow's, is also understanding the importance of running completely. Working iteratively and making sure that you're, you're testing your assumptions, and your hypotheses and your and you're making tweaks as you go.

Allison Hartsoe - 15:29 - Gotcha. Can you walk us through what's the sense of the flow? So let's say I come and I decide that I want to participate in the simulation. I'll give the beginning part, the conference. We'll kick off with different, a little bit of table setting with Pete and I and then we'll do two different panels that talk a little bit about related issues. One is on marketing technology, and the other is the impact from wall street, and then there's a queue up session where we kick off the game. Can you take it over from there and kind of walk us through what it feels like to be in the game and what happens?

Sarah Toms - 16:06 - Yes, absolutely. So first of all, thank you again for inviting us back. We did this last year, and it was very successful and very well attended and received, and I'm really delighted that we're gonna be running the simulation again this year, although it will be a different flavor than what was experienced last year.

Allison Hartsoe - 16:24 - You've made it harder, haven't you?

Sarah Toms - 16:27 - We've made it harder, we have a different flavor completely that we're going to be playing with folks this year, so if anybody's returning to the conference, you're not going to be doing the same thing again. So where we begin is Pete and I will be doing a full introduction to the simulation to the experience. Pete does an overview of what it's all about as do I, and we organize participants into teams and we will actually be playing the simulation at Wharton, San Francisco so the participants will be moving off into team rooms, group study rooms where they will be playing through a number of rounds as a simulation. We will then break and do a mid-simulation debrief, and I believe that that might actually be the next day, am I right, Allison?

Allison Hartsoe - 17:15 - It is.

Sarah Toms - 17:17 - And then the following day we will play through the rest of the simulation, the following rounds and then the culminating session is Pete, and I go through everything that happened in the simulation, a really rich discussion with all the participants. AS we're going through the simulation experience. He and I are both capturing a lot of what's happenIng within the team rooms. We're spending the whole time with those smaller groups and really teasing out those conversations and relating back to organizations, you know, what's happening in individuals, organizations with respect to what they're experiencing in simulation and so when we get to that final debrief, it really is a very high energy conversation about everything that happened in simulation, how to draw those lines of sight back to customer centricity and the marketing science behind it, and then what are the next steps to really bring these learnings back into everybody's organizations.

Allison Hartsoe - 18:19 - That's the part that I love is at the end of the game is really to break points since people have a chance to start the game in the beginning. I think that when we move into the cocktail hour, there'll be quite a lot of conversation about what did you do, what did you do? Some early discussion points about what might be good strategies or tactics, but it's too early in the game for anyone to get some kind of substantial competitive advantage. I think after just a few rounds if they've just gotten a taste right,

Sarah Toms - 18:48 - Absolutely and who is at the top of the leaderboard after the first few rounds are never who's at the top by the end,

Allison Hartsoe - 18:57 - more or less get lucky.

Sarah Toms - 18:59 - Yeah, so and customer-centric. It is about the long game and understanding that the lifetime value of your customers, so those investments that happen early on, I can turn out to be really important.

Allison Hartsoe - 19:13 - They can, they can, and that's why the post discussion is so rich because there are all these different twists and turns and as you get into the discussion, people get really passionate. In fact, on the reviews last year, that's what people loved the best was they came, they played, and they were like blown away. They were just. They had so much fun, and they had so many things to talk about with the other people at the conference. It's not like the kind of event that you show up, and you're just power pointed to death, or you might need someone as you're waiting in line for a beverage. It's not like that. It's a collaborative team building dynamic. Let's all learn from each other kind of environment, which is what I think makes this event so unique. One thing I want to mention is on the customer centricity conference site, there's a link to the customer centricity simulation, and there's a log in there, and I just checked it. It still works just fine, and this is a place people can go to actually see some of the initial screens, get a sense for what you might have to work with on the initial packages of information. It's a really good place to just get an initial taste of the company, and although you may be changing the company, I think that the paradigm still holds.

Sarah Toms - 20:28 - Yep. We definitely recommend folks that they have the time to log in and think about 10 to 20 minutes of preparation time at the beginning of the simulation to get folks prepared if they don't have time

Allison Hartsoe - 20:43 - and because of that preparation time perhaps for the attendees, we should be sending out a couple of links and things that really get them queued up with a nice advantage.

Sarah Toms - 20:54 - Good idea. We will definitely do that.

Allison Hartsoe - 20:56 - Very good. Good. Now, if people want to get in touch with you either about the concept of experiential learning or about the simulation in general, how should they reach you?

Sarah Toms - 21:09 - Well, there are several ways. I welcome them to connect with me on Linkedin. They can follow me on Twitter. It's @SarahEToms or sends me an email which is just stoms@wharton.upenn.edu. I would love to hear from folks.

Allison Hartsoe - 21:26 - Wonderful. Wonderful. Thank you. So let's summarize a little bit first, why should I care about the customer centricity simulation besides the fact that Sarah built this rockstar data model sensitive programming masterpiece, it's definitely the fact that interactive learning clearly matters. It makes a bigger difference than the kind of passive teacher-centered learning that you might have experienced in the past. This is all about high touch, putting theory into practice and having a safe place to try out customer lifetime value strategies around acquisition and retention and development of the customer base and loyalty programs and how does the CRM fit in with all this. So it's a really great safe place to learn. Second, when you think about the kind of impact that you get, customer centricity as-as a concept, in general, is often seen as being customer focused or just customer service and in both of those examples were treating the customer as a general term.

Allison Hartsoe - 22:29 - This is really evidence-based marketing sciences Sarah said and your aha moments hopefully will come from things like r and d changes around what you should be doing for specific classes of customer or product changes around customers and things that you might be offering them in order to spike your market valuation. All of it is designed to drive directly to the bottom line. That's really What we care about. So come to this conference and come to play this game because you care about the bottom line of your company and you want to have an impact really. And thir,d come it's May 17th and 18th at Wharton San Francisco. Bring a team if you like. We have special team pricing or just come on your own. Either way. Our pricing is good until mid-April, and then the price goes up again, but right now the prices set I think at 1200 is the rate that it's at right now and we would be thrilled to have you. Sarah, did I miss anything in that summary? Is there anything else you'd like to add?

Sarah Toms - 23:33 - I think that summary is brilliant. Thank you, Allison.

Allison Hartsoe - 23:35 - Thank you. You're the brilliant one, turning all that good lord. I can't imagine trying to put all those sensitivities and the model that's incredible. That's great

Sarah Toms - 23:47 - and I don't want to take too much credit here. It really did take a village to build the simulation. We've had just tremendous expertise from business experts to Ph.D. students to developers. You name it. We've brought them in. Everything including the kitchen sink has come to help make this simulation great.

Allison Hartsoe - 24:04 - Isn't that always the case for the best stuff? It takes a whole completely. Yeah, it certainly has. Exactly. Well, as always, links to everything we discussed are at ambitiondata.com/podcasts, including. We'll put up a link to the customer centricity simulation demo that I mentioned and remember when you use your data effectively; you can build customer equity. It's not magic; it's just a very specific journey that you can follow to get results.

Allison Hartsoe - 24:41 - Thank you for joining today's show. This is Allison. Just a few things before you head out. Every Friday I put together a short bulleted list of three to five things I've seen that represent customer equity signal, not noise, and believe me, there's a lot of noise out there. I actually call this email the signal things I include could be smart tools. I've run across articles, I've shared cool statistics or people and companies I think are doing amazing work, building customer equity. If you'd like to receive this nugget of goodness each week, you can sign up at ambitiondata.com, and you'll get the very next one. I hope you enjoy The Signal. See you next week on the Customer Equity Accelerator.

 

Key Concepts:  Customer Lifetime Value, Experiential Learning, Active Learning, Simulations, Customer Centricity, Education Technology, Data Modeling 

Who Should Listen:  CAOs, Digital Marketers, Business analysts, C-suite professionals, Entrepreneurs, Ecommerce, Data scientists, Educators

Podcast Updates

Sign up to be notified when each week's episode is released.

(PRIVACY POLICY)

 

 

Recommended Episodes

 

Ep. 40: Customer-centric research with EA's Jodie Antypas

Episode040-1

 

Ep. 42: Intersection of CX and CLV with Ehow Chen

Episode042-2

 

Ep. 43: The Customer Revolution is Here with Allison Hartsoe

Episode043-1

 

Ep. 54: 2019 Predictions Show Financial Impact from Marketing with Dan McCarthy

Episode054-1

Podcast Updates

Sign up to be notified when each week's episode is released.

(PRIVACY POLICY)

 

 

Listen to the Customer Equity Accelerator Podcast

 

Spotify_Logo_RGB_Green

c-suite-radio-headliner-badge-black-1

Available on itunes  

 Listen_On_iHeartRadio_135x40_buttontemplate-01

Stitcher

Listen on Google Play Music

TuneIn logo

Player FM Logo v2

logo

logo-1