Marketers and IT professionals often think that data warehouses and software tools like campaign management will allow them to mine the gold in their customer databases. After much effort, they often find only fool’s gold. The real gold comes from richly constructed customer attributes.

Extended metaphors aside, what are customer attributes? Here are some specific examples of attributes as measured by each customer or household:

• Sales in the last 12 months
• Recent or lifetime sales by product group
• # Product classes the customer has bought from
• # Marketing channels the customer has bought from
• The customer’s dominant or preferred marketing channel
• Percent of emails opened in the last 3 months
• # Days since last purchase
• # Months as a customer
• # Promotions in the last 12 months
• Age, gender, income and other demographics
• Sales in the last 12 months from co-ops
• Targeted product category sales from co-ops

These customer attributes are the lowest level of customer data that give us knowledge or insight about customers. For a single customer, the attributes provide a row of profile variables. For example, a customer is a 44-year-old female who buys from catalogs, internet and retail stores, lives 12.5 miles from the nearest store, has placed $435 in sales in the last 12 months and is also active on co-op files. For segments of customers, attributes tell us that 15% of customers have purchased across all product categories, but 30% have purchased from only 1 category.

Customer attributes create knowledge and insight we can act on. Once in place, they form the basis for modeling, profiling, LTV analysis, customer file segmentation and tracking, scoring and selection, queries and campaign reports. These are the core functions of a marketing system, and they are worth millions to organizations with medium-to-large customer files.

Attributes, long a staple of the modeling process, should be at the heart of your marketing systems and your customer database. The best way to incorporate attributes into your business is to create a data mart that includes hundreds of these summarized customer variables. With variations built in for “as-of” views of attributes at a point in time, and a few measures of subsequent performance, you create the models, LTV analysis, file tracking of strategic segments and the campaign performance reports needed to plan, execute and evaluate marketing programs.

Customer attributes are the undiscovered gold buried in your customer file. If your internal IT support or vendors do not use customer attributes, find a vendor like Clario Analytics who understands and can deliver them. Without attributes, you have only data.

About Doug Faherty

Doug Faherty serves as VP, Marketing Strategy Solutions at Clario Analytics. He has worked in marketing and analytics both on the inside and as a consultant. He thinks cloud technology and software-as-a-service will dramatically change the use of information technology in the next few years and expand best practices in business analytics.