Peter Fader | Wharton School | The Warby Parker Case - I Can See Clearly Now With My CLTV Glasses On

CMO Confidential

A CMO Confidential Interview with Dr. Peter Fader, Professor of Marketing at The Wharton School of Business. This show is a bookend to "The Rise & Fall of Peloton as Seen Through the Lens of CLTV" with Professor Dan McCarthy.

Pete discusses the use of Customer Lifetime Value (CLTV) as key to understanding the true value of the company and explains why it is risky to think "Your company is different." Key topics include: why customer metrics and stock valuations can be temporarily out of synch; why customer metrics eventually win out; how CMO's can use CLTV as a forecasting bridge with Finance; and how Warby Parker's strategic focus did not bend during dramatic stock price fluctuations. Tune in to hear why Warby is the Tortoise and Peloton is The Hare in the classic race.

Discover the real story behind Warby Parker's dramatic $6B valuation swing and subsequent recovery through the lens of customer lifetime value analysis. Dr. Peter Fader, Professor at The Wharton School and co-founder of Zodiac (acquired by Nike), reveals how his team accurately predicted Warby Parker's true valuation before its IPO.

Get an insider's look at how customer metrics and lifetime value calculations painted a different picture than Wall Street's initial $6B valuation. Learn why Warby Parker's steady approach to growth, unlike Peloton's aggressive expansion, ultimately proved successful. Dr. Fader breaks down the critical customer acquisition costs (CAC) miscalculations in Warby Parker's S-1 filing and explains how proper cohort analysis predicts company value.

This episode provides invaluable insights for marketers and business leaders on using customer lifetime value to make strategic decisions, communicate with CFOs, and evaluate company worth beyond stock price fluctuations. Perfect for marketing executives, financial analysts, and anyone interested in the intersection of customer metrics and company valuation.

Join Mike Linton, 5-time CMO, as he explores this fascinating case study that demonstrates why understanding customer economics is crucial for sustainable business growth and accurate company valuation.

#growthhacking #performancemarketing #digitalmarketing #marketresearch #warbyparkeripo

CHAPTERS:

00:00 - Intro

02:00 - Using Customer Data and CLTV

05:52 - Warby Parker IPO Overview

11:29 - Warby Parker's Stock Price Impact

15:35 - Analyzing Warby Parker's CAC Error

18:18 - Warby Parker's Economic Performance

19:36 - Warby Parker: Tortoise vs. Hare Strategy

21:36 - Projecting TAM for International Expansion

23:17 - Projecting TAM for New Product Lines

27:59 - Wrapping Up Warby Parker Insights

29:30 - Marketing Advice and Strategies

30:16 - Conducting a Customer Base Audit

30:56 - Understanding Company Differentiation

31:56 - Outro

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