If your current customer analysis is limited to basic reports and a few dimensional summaries, you don’t really know your customers very well.  To understand your customers better, you need to describe them as completely as possible in all their dimensions.  The primary source for this will be the internal data you have available on your interactions with them – promotions, orders, surveys, etc.  In a perfect world, customers would tell you their intent – what they wanted to buy, when they wanted to buy, etc.  Obviously, that doesn’t happen so the best you can do is use the wealth of data you have to describe them as completely as possible and use predictive analytics to infer behavior.

Most companies have a wealth of detailed transactional data available on their customers.  In its detailed form, the data is relatively useless in terms of understanding customers and their behavior.  The detail is more noise than value.  However, intelligently summarized, the same detail can provide a highly useful picture of the customer.  Typical summaries would include recency, frequency, monetary, channel, and product group combinations that provide insight into how much, how often, and what a customer buys.  This data in combination with promotional summaries, demographics, external data appends, surveys, etc. can provide a good picture of each customer.  The end result may be hundreds or even thousands of multi-dimensional summary variables for each customer.

This is the type of data that you need to feed more sophisticated analysis techniques that can help you better understand your customers and better predict their behavior both for your benefit and theirs.  Human behavior is driven by a great variety of complex factors so how do we expect to understand customers based on the very simplistic and limited data that is typically used?

The best practices we bring to leveraging existing client data in all its forms is one of the most valuable things we do.  Done correctly, this data layer leads to better customer analysis, reporting, modeling, and contact optimization.   It really is the data foundation upon which everything else is built.

About Dave Fickes
Dave Fickes is Vice President, Integration at Clario Analytics and has over 25 years’ experience designing, implementing, and using large scale marketing data platforms that support advanced analytics.  Having spent his career straddling both the analytic and IT worlds, he uniquely understands what is needed from both sides to realize the true value hidden within an organization's data.