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Direct Marketing Glossary of
Terminology
Abandonment
As in the phrase "call abandonment".
This refers to people who, being
placed on hold in an incoming call,
elect to hang up ("abandon") the
call. Call centers monitor closely
the "abandonment rate" as a measure
of their inefficiency.
ACD
Automatic Call Distributor
A
complex machine used in modern call
centers for incoming calls. It
routes calls to available agents,
holds overflow calls, gives and
takes messages, provides reports. A
must for modern database marketing.
Acquisition
Cost
The cost of
signing up a new customer. Lifetime
Value is often used to compute the
maximum allowable acquisition cost.
Address
A
computer term for the location on a
disk or in memory of a piece of
information. Addresses help the
computer to find things rapidly, and
to store them for later retrieval.
Ad-hoc
report
A reporting method which permits you
to ask questions like: How may women
over 60 have bought more than $200
from us in the last 4 months?
Affinity
People
who are similar in lifestyle
Affinity
Analysis
A
process of finding relationships
between customer purchases. People
who buy skis buy snow tires.
Affinity
Matrix
A cross
tab showing cross buying patterns by
customers who did or did not buy
Products A, B, C, and D.
Agent
The word
for a telephone operator in a modern
inbound call center in a company
that takes a lot of customer service
and sales calls.
Analog
Regular
telephone service comes over analog
lines. Modern improved service
(often used for data lines) comes
over DIGITAL lines in which all the
sounds are converted to 1's and 0's.
For database marketing computer
communications, digital is better.
ANI
Automatic Number Identification. A
system whereby you can learn the
number of a person who is calling
you on the telephone. Can be linked
to a database to find the person's
name and address.
Appended
Data process whereby a customer file has
data appended to it (such as age,
income, home value) from some
external data file.
ASCII
American
Standard format for data storage on
magnetic media (tape or disk).
Attrition Model
A model that predicts which
customers are most likely to leave.
Usually expressed as a percentage of
likelihood.
Attrition Rate
The opposite of retention rate. The
percentage of customers this year
who are no longer buying next year.
Autosexing
A
computer process for finding the sex
and appending titles (Mr. Ms.) to a
file of names.
Back end
As in phrase
"back end analysis" refers to the
results of actions with people who
have responded to your initial
offer.
Batch Mode
If you have received 10,000 replies
to a mailing, you can update your
master file with these replies in
one batch. This is the fastest and
cheapest way to update records. The
opposite is On-Line updating.
Baud Rate
A
measure of line transmission speed.
28.8 thousand Baud is a good speed
for terminals and PC's connected to
a marketing database. Speeds can go
up to 56,000 or more.
Bits
If a byte is
like an atom in computer language, a
bit is like an electron. A bit is
either on or off. It is either a 1
or a zero. Eight bits make up one
byte.
Block
The
smallest reported unit in the 1990
U.S. Census. About 14 households in
a block.
Block Group
The smallest reported unit in the
1980 U. S. Census. About 340
households on average.
Bounce
back The practice of sending another
identical (or similar) catalog back
to someone who has just ordered
something from one of your catalogs.
Brand Managers
Most packaged goods companies organize themselves by brand.
The brand manager is responsible for
advertising, marketing and sales of
the product. The brand manager is
typically the main obstacle to
database marketing which is customer
focussed rather than product
focussed.
BRC or BRE
Business
Reply Card or Business Reply
Envelope
Brokerage Commission
The
commission (usually 20%) paid by a
list owner to a broker to handle the
rental of a list.
Bugs
Errors
that crop up in software. Caused by
inability of programmers to predict
all possible ways that the code in
their programs will be used to
process data.
Byte
A unit
of computer memory. One letter or
number is a byte. A byte is usually
composed of eight bits.
Call Center
The word for an inbound telephone division in a company. The
operators are called Agents. The
call center uses an ACD (automatic
call distributor) to manage the
calls efficiently.
Call
Tracking
Keeping track of what happened to
customer calls.
CD
A banking term for certificate of
deposit. Also: a compact disk, a
form of digitized data storage. (as
in CD-ROM)
Cell Code
After completing RFM analysis, every
customer is assigned a Cell Code
which identifies her recency
frequency and monetary level of
buying. The cell code is often used
in mailing. Sometimes used
interchangeably with the term Source
Code.
CFO
Chief financial
officer. The man in charge of
budgets.
Channel
(1) An input-output device as part of a mainframe
computer.
(2) A means of distributing product to the market. For
example, dealers, retail stores,
direct marketing.
Cheshire
labels
Paper that has printed
names and addresses which are to be
mechanically affixed individually to
each mailing piece.
Chip
The thing in the center of a computer that makes it
work. On a PC a 486 chip is a fast
chip. A Pentium is faster. Faster
and faster chips keep coming out.
Chips are the size of your
fingernail, and hold millions of
circuits shrunk by photographic
methods to tiny size.
Churning
The practice of
customers switching to another
supplier based on special discount
offers. Particularly used in the
cellular telephone or credit card
industries.
CIF
Customer
Information File usually in banks
and financial institutions. A
consolidation of many different
accounts held by a household or
individual, used for marketing
purposes.
Cleaned List
One
that is free of duplication and
unwanted names and addresses.
Cleaning Names
A process whereby
names and addresses on a customer or
prospect list are corrected
(addresses standardized; zips
corrected; spelling and punctuation
corrected; duplicates consolidated,
etc.)
Cluster
A way of
dividing all households in the
country into about sixty different
types, such as "Blue Blood Estates"
and "Shotguns and Pickups." Usually
called lifestyle groups. Useful for
file segmentation. Clustering
systems are provided by Claritas,
Equifax, Donnelley, CACI. In Canada
by Compusearch.
Coding
Accuracy Support System (CASS)
Created by the U.S. Postal Service
to ensure the accuracy of software
programs used by service bureaus to
check addresses and code mailings
for delivery.
Confidentiality
Agreement
An agreement which
precedes any contract with an
outsourcing agency. It says that
your secrets will not be revealed to
others.
Compiled List
Names and addresses taken from
directories, newspapers, public
records. People who have something
in common. Compiled lists are
usually the least useful or
responsive for direct marketing.
Response lists are better.
Computation Period
The number of
years from now that you can safely
project customer lifetime value. The
period is short for products that
soon become obsolete.
Continuity
Products or services
bought as a series of small
purchases, rather than all at one
time. Book of The Month Club, or
other products shipped on a regular
schedule.
Continuation
A
mailing to the same list following a
successful test of a portion of the
list. A continuation becomes a
"rollout" when the entire list is
mailed.
Control Group
Every database promotion should
include a control group of customers
who are not exposed to the
promotion. The success of the
promotion is measured by the
difference in response of the
promoted group compared to the
control group (after subtracting the
cost of the promotion).
Controller
A device for managing
the data input and output from
several devices which are connected
with a mainframe. These devices can
include terminals or disks or tape
drives. Controllers usually have a
small computer inside them which
permits them to manage the flow of
instructions from the computer to
the units in an organized way. They
make the computer more powerful.
Conversion Rate
The percentage of responders who become customers.
Coop (co-op)Mailing
A mailing in which two or more offers -- usually from
different companies -- are included
in the same envelope, and share the
costs.
Copy
The text of
your direct mail or email piece.
CPI
Cost per inquiry
CPM
Cost per thousand.
Common rate for list rentals when
fee is based on actual orders rather
than inquiries.
CPO
Cost
per order
CPU
Central Processing Unit. The heart of a
mainframe.
Cross-Selling
Encouraging customers to buy products
from other departments or
categories.
Custom Report
A database report designed by the
marketing staff which exactly meets
the marketing needs of the company.
Once programmed, it can be run daily
or weekly for very little cost.
Consumer
Generally, a consumer is
anyone who buys a product or uses a
service.
Customer
Relationship Management (CRM)
Providing better communication,
offers and services to customers by
evaluating your previous
interactions with them. (ex: ACT,
ACCESS
Database Marketing
Collecting data on customers and
using it to provide recognition and
services to customers, resulting in
increased customer loyalty and
repeat sales.
Data
Enhancement
A process whereby a
customer file has data appended to
it (such as age, income, home value)
from some external data file. See
overlay.
Data Entry
Also
called Keypunching. Entering names
and addresses and other data into
magnetic media such as tape.
DBA Database Administrator
A
person who controls a marketing
database. The DBA should be someone
from marketing or sales who has the
budget for the database.
DDA
A banking term for checking account
balances.
Dealer Training
A process whereby dealers are trained to
handle your product.
Decile
One tenth of a mailing, usually divided by
percentage of response.
Decoy
A unique name added to a mailing
list used to spot unauthorized use
of the list.
De Dupe
Identifying and consolidating
duplicate names usually done in a
merge/purge operation.
Delivery Sequence File (DSF)
A
computerized file of more than 125
million records containing all the
addresses the U.S. Postal Service
serves throughout the U.S. Each
address record features ZIP+4,
carrier route, delivery sequence,
delivery type and seasonal delivery
information that can help mailers
maintain accurate and complete
addresses on the lists they own and
rent as well as code their mail for
walk sequence discounts from the
postal service.
Demographics
Demographic data usually refers to the data which the Census
Bureau or Canada Stats collects on a
neighborhood such as income,
education level, etc. This data can
be appended to a household record.
It isn't necessarily accurate for
any particular household since it is
the average for households in that
block. But it is usually the only
data available.
Digital Line
A type of telephone transmission service that is much more
reliable than the normal analog
line. All data is converted into
bits before it is transmitted. A
regular telephone line is called an
Analog Line.
Direct Access
A disk is a direct access device.
Tape drives are not direct access
because to find data on them, you
have to read all the way through
thousands of records to find the one
you want. With direct access, you
have all data stored at particular
addresses. You can access each piece
of data directly.
Direct
Marketing
Interactive marketing that produces a measurable response or
purchase. The data is stored on a
database.
Direct Response
Advertising or promotion that seeks
not just to provide information, but
to generate an inquiry, order or
visit.
Direct Cost Percent
The percentage of revenue that
is applied to the cost of the
product plus overhead, fixed costs,
etc.
Discount Rate The amount by
which any future dollar amount must
divided to produce the net present
value of the amount. The formula is
DR = (1 + i)n where i = market rate
of interest and n = number of years.
The interest rate is usually doubled
in the formula to account for risk.
Disk
Magnetic disks are attached
to computers. They hold information
(records) which can be retrieved
very rapidly if the computer knows
the address of the information on
the disk (Direct Access). In
relational databases, the address of
records and information within
records are kept on indexes which
make access to the records very
rapid.
DNIS - Dialed Number
Identification
A system whereby
you can learn in a call center what
number the incoming callers dialed
to reach you. Important because many
call centers handle calls from many
incoming numbers for many purposes,
but use the same bank of agents to
take the calls. They have to know
what number people were dialing so
they can react properly to the call.
Downsizing
Moving a function
from a mainframe computer to a
smaller computer such as a Mini, a
LAN or a PC.
Dump
Printed display of the contents of a
tape or data file. You should look
at a dump of some records in our
customer database to check accuracy.
Duplicate
The same name
occurring twice or more on the same
file. All very large databases
contain duplicates because name or
address spelling may vary slightly.
Good service bureaus can reduce but
never totally eliminate duplicates.
Duplication Factor
The % of names on one list that are also on another list. It
is a measure of affinity in the
lists.
Enhancement
Appending demographic or lifestyle
data to a list.
Event Driven Programs
Database programs which are
triggered to produce output (usually
communications) based on events: a
birthday letter, anniversary letter,
thank you letter, etc.
Extract
A system for creating a
sequential file from a relational
marketing database. The extract can
be used for preparing reports, or
for sending data to other companies
for their use.
Fixed Field
Organization of a tape or data file in which
each group of data (such as name,
address, city, zip) has a fixed
location and length within the file.
FSI - Free Standing Insert
Usually a coupon or other promotion
found in a magazine or newspaper.
The least expensive way to
distribute coupons.
Flat File
Another name for a sequential name file.
Contrasted with a database file (not
flat because of the indexes).
Focus group A group of customers who
are assembled together by an
advertising agency in a conference
room to discuss a particular
product. Useful for learning what
the public thinks of your product or
message or company.
Format
The way data (name and address) is
organized on a disk or tape. There
is no standard format. Every company
has their own.
Frequency
A term for how many times a person buys from
you.
Fulfillment
The process of responding to a customer
request with literature or product.
Fulfillment us usually outsourced to
a fulfillment house.
Geocoding
A system for assigning
a census code to any name and
address. Once a file is geocoded,
you can append census data (income,
race, etc.) to the records and
assign cluster codes.
Geodemographics
Census data that can be appended to a household file once it
has been geocoded. Includes such
factors as income, education, home
type, etc. Derived from the
neighborhood of the household. Same
as Demographics.
Geographic
Information System (GIS)
Software
that displays data on a computer
generated map.
Gigabyte
A billion bytes (characters). A measure of
the size of mainframe disk storage.
A typical mainframe shop will have
100 gigabytes or more. "Her database
used over 35 gig!"
Graphical
User Interface (GUI)
Software that permits users to access their data by
manipulating a mouse.
Hard
Bounce
A hard bounce is an e-mail
message that has been returned to
the sender because the recipient's
address is invalid. A hard bounce
might occur because the domain name
doesn't exist or because the
recipient is unknown. When the
recipient's name is known, e-mail
may be rejected because the sender's
mail box is full or for other
reasons. This is known as a soft
bounce.
Hardware
Computers and disks, tape drives, printers, and other gear
that are plugged into computers.
Hawthorne Effect
A psychological
phenomenon whereby people
(customers) act differently when
they are being studied.
House File
The organization's
own file of active and former
customers.
Householding
A process in which all people and their
accounts are grouped by the house
that they live in so that they only
get one letter per house in a
promotion.
ID
Number A
number assigned to a record to help
to relate it to other records in the
computer which have the same ID.
Identification
The process
whereby a customer identifies
himself with the company which
provides him with products or
services
Index
1) used in relational databases to help to find common data
in thousands of records. An index
for income could help find all the
customers whose income was between
$25K and $35K. Using an index you
can query a file of 10 million
customers and find out how many
women aged 60+ bought more than $200
in the last 6 months, and do it in 5
seconds. 2) A statistical term for
relating the value of two sets of
numbers. If one group had a response
index of 100 and another had 120,
the second group had 20% more
replies than the first one. The
average of any group always has an
index of 100.
Influentials
In business-to-business, executives
who have the authority to make or
influence a purchase.
Infrastructure The process of
maintaining a database: nightly
backup, cleaning, merge/purge,
deduplication, update, etc.
Integrated Marketing
A combination of two or more forms
of marketing used to sell a product
or service (e.g. a direct mail
campaign combined with a
telemarketing campaign).
IS
Information Systems (Also MIS) - the
part of the company responsible for
the central data processing
operations.
IVR
Interactive Voice Response a piece of equipment connected
with an ACD which permits inbound
callers to a call center to choose
their own routing of the call ("Push
1 for Sales, Push 2 for Service...)
Keyline or Match Key
A
combination of numbers and letters
usually beginning with the zip code,
which is used as a rough household
duplicate eliminator.
Keypunching
The process whereby
someone enters names and addresses
and other data from hard copy (paper
forms) onto a computer tape or disk.
It is done on a typewriter-like
keyboard into a small computer. Same
as Data Entry.
LAN
Local
Area Network. A system for linking
several PCs into a single system
with a File Server PC that keeps a
central database. Some databases are
located on LANs.
Laser
Letter
A letter produced on a Laser Printer. Very clean and neat
looking. Possible to have unlimited
personalization of the text of the
letter.
Lead
A prospect
who has responded is called a Lead.
Lead Conversion Rate
The percentage of leads which
become customers.
Lead Tracking
The process of keeping up with what
has happened to a lead (prospect who
has expressed an interest in your
product or service). Lead tracking
is very difficult because salesmen
hate to report on the status of
leads.
Lettershop
An
independent company that handles all
the details of printing and mailing
letters.
Lifestyle
Lifestyle data about a neighborhood
comes from clustering. If a
significant number of people in a
given cluster have taken a foreign
trip, it is assumed that all similar
households have done this. It is a
lifestyle attribute. Included are
magazines read, TV programs watched,
etc.
Lifetime Value
The
contribution to overhead and profit
made by a customer during her total
relationship with your company.
Abbreviation: LTV.
Lift
The improvement in response from a
mailing due to modeling and
segmentation. Divide the response
from a segment by the overall
response, subtract 1 and multiply by
100.
List Broker
A list
specialist hired by a mailer to make
arrangements to use other companies
lists. Brokerage services usually
include: research, list selections,
recommendations and logistics so
that the rented lists arrive at the
proper time. The standard commission
to a list broker is 20 percent.
List Brokerage
A service which brings list owners and prospective list
renters (users) together.
List
maintenance Keeping a mailing list
current through correcting and
updating the addresses and other
data.
List Manager
The
list manager works for the list
owner. The primary function is to
promote the list to mailers and list
brokers for list rental. List
managers can be either an internal
employee of the list owner, or part
of an outside list management
company paid a commission by the
list owner.
List Rental
The process of renting (for one time
use, or other periods) a list of
names of customers owned by some
other organization for an agreed
upon cost per thousand.
Loss
Leader
A product sold at a loss
to get customers to begin buying.
Loyalty
Customer loyalty is measured as Retention. A
loyal customer is one who keeps
buying from you.
Loyalty
Programs
Rewards that encourage
customers to keep being customers
longer, or to purchase more.
Mailing List
A list of customers
or prospects used to mail catalogs
or sale announcements. It is not a
marketing database because it does
not provide for a two-way
communication with customers.
Mail Shop
An independent company which specializes in preparing
materials for mailing. They affix
labels, sort for bulk rates, prepare
bagtags, insert in postal bags.
MAND
Money, Authority, Need and
Desire -- the requisites of a
qualified lead.
Market
Penetration
The percentage of
buyers you have as compared with the
total households or businesses in
the area you have selected as your
market.
Market Research
Statistical analysis of customer
data to draw overall conclusions as
a basis for action.
Mass
Marketing
Selling to everyone
through mass media such as radio,
TV, or a newspaper, as opposed to
database marketing which is aimed at
a small selected audience.
Match Code
A keyline. An extract
of the name and address used to
identify a specific record. Used in
de-duping.
Media Communications
channels that convey messages, such
as radio, TV, magazines, direct
mail.
Megabyte
A million
bytes. Disks are rated in megabytes.
Memory
The amount of information that a computer can
hold in its head while it is doing
work. The more memory, the faster a
computer can work, and the more
complicated programs it can handle.
New computers today have 32
megabytes of memory, which can be
expanded.
Merge/purge
A
software system used to merge many
different input tapes in differing
formats and put them into a common
format for a mailing. Merge/Purge
detects duplicates.
Migration
The process of moving
your database from one platform
(such as an external service bureau)
to another (such as your in-house
mainframe). When you outsource, you
should look ahead and be sure that
you can migrate at some later date.
MIPS
Millions of Instructions
Per Second. A measurement of the
relative speed of a Mainframe
computer.
MIS Abbreviation for
Management Information Systems. This
term is used in many companies to
refer to the data processing staff
that runs the central company
mainframe computer.
Modeling
A statistical technique whereby you determine which pieces
of data in your customer database
explains the behavior of your
customers. The output of a model is
a series of weights which can be
multiplied by customer data (income,
age, length of residence) to create
a score which predicts likelihood to
respond to an offer.
Modem
A device permitting a PC or terminal
to send information over a telephone
line. You have to have a modem at
both ends. Modems are rated in Baud
rate.
Mouse
A small
switch on a wheel used to control a
PC
Multi-buyer
A person who crops up on two or more
independent rented lists.
Multi-buyers usually respond better
to a direct offer than other buyers.
Multiple Regression
A statistical
technique used in modeling whereby
you develop a formula which explains
the relationship between several
variables in explaining customer
behavior.
NCOA
National
Change of Address, a US Postal
Service system under which about
twenty service bureaus nationwide
have exclusive use of the change of
address forms filed by persons or
businesses who are moving. These
forms are keypunched, and can be
used by the service bureau to update
your tape of prospects to obtain
their correct current address. A
worthwhile service for mailers.
Net Names
The actual names used in a mailing, after
removing the duplicates and matches
to your customer list. In some
cases, you can rent names on a
net-name basis.
Neural
Network
A type of modeling
software on a PC which permits a
marketer to determine the weights
that should be applied to a large
number of variables to predict the
response or purchases by a target
audience.
Niche Market
A
way of finding a special product
that appealed to only one group, and
selling that product very profitably
only to that group, ignored by
others.
Nixie
A direct
mail letter which has been returned
to the sender because the address
was wrong. Also, any undelivered
piece of mail. Nixies are used to
correct a list.
Nth name
A software system whereby you can
pick every 3rd or 4th or 250th name
out of a file to use as a valid test
of the file. To test a file of
400,000 with a test mailing of
40,000, you would pick every10th
name.
Offer
What you are
offering in your direct mail: 10 for
only $19.95.
On-Pack Offers
Communications with customers by
making an offer on the package that
they purchase.
Overlayed
Data
A process whereby a
customer file has data appended to
it (such as age, income, home value)
from some external data file. See
Enhancement.
Outsourcing
The process of having various
database functions handled by
external service bureaus. Typically,
functions are outsourced to direct
response agencies, computer service
bureaus, data entry houses,
mailshops, fulfillment houses,
telemarketing companies.
Package
The envelope or container or look of your
outgoing direct mail piece.
PC
Personal Computer. The versatile
desktop workstation used for
hundreds of applications. They can
be used to access a marketing
database resident on a mainframe.
Penetration Ratio
Your customers
as a percentage of the universe that
defines your customer's type of
household or business. "We had a
penetration ratio in that zip code
of 8%."
Personalization
The process of including personal
references in an outgoing mail piece
such as "Thank you for your order of
Feb. 23 for six boxes of hard candy,
Mrs. Williams." With laser letters,
personalization does not cost more
than non-personalized letters.
POS
Point of Sale. A cash
register.
Postal Pre-sort
Sorting outgoing letters in a special
way to take advantage of postal
discounts.
Predictive Model
A model which predicts the response
to a promotion.
Present Discounted Value
A financial process for
calculating the present value of an
amount of money to be received or
paid in the future. The formula is
PDV = V / (1 + i)n where V = future
value, i = market rate of interest,
n = time in years.
Production
A function in an
advertising agency of producing
letters and other direct mail
pieces. Also the programmers in a
service bureau who work on such
direct mail pieces.
Profile
A way of describing your typical
customer. You create a profile by
modeling your database. The profile
could tell you that your typical
customer was a woman of 35-54 with
an income of $25-$50K.
Prospect
A potential customer
who you have targeted.
Prospecting
Mailing, Emaling or telemarketing to
prospects who are not yet your
customers.
Psychographics
A way of grouping people by wealth,
orientation, hobbies and interests.
Pull
The percent response to
your offer by mail or phone.
Purge
To eliminate undesirable names from a list.
Qualify
In business-to-business, a process whereby
respondents to an ad or a mailing
are determined (usually by a
telephone interview) to be worth a
salesman's time and attention. In
efficient operations, a telemarketer
will qualify an incoming lead before
the name is sent to a salesman for
action.
Query
A question
designed to retrieve information
from a database. The result can be a
count, a cross tab or a report.
Quintile
One fifth of a mailing,
usually divided by percentage of
response. "Our top quintile gave us
70% of our total revenue."
Reactivation
A program which encourages lapsed
customers to start buying again.
Recency
A term for how recently
a person has bought from your
company. It is well established that
people who have bought most recently
are more likely to buy from you
again on your next promotion than
people who bought from you longer
ago.
Record
A collection
of fields that describe all the
information on a customer.
Referral Rate
The percentage of
new customers that begin buying this
year as a result of encouragement
from last year's customers.
Expressed as a percentage of last
year's customers. If we had 4,000
customers last year, and they
recommended new customers to us, of
whom 240 became customers, the
referral rate would be 6%.
Reformatting
Changing the format
of a rented list to a new record
format that matches a desired
arrangement.
Regression
Used in the phrase Multiple
Regressions. It is a statistical
technique, part of modeling, whereby
you try to discover a mathematical
formula which will explain trends in
a set of data, and which variables
determine response. A multiple
regression might tell you that your
best customers live in condominiums,
have no children, and have income
over $75K, for example.
Relational
A relational database is what is needed for
database marketing. Such a database
is kept on disk and consists of
related files (name and address,
orders) which are related to each
other by ID numbers and accessed by
indexes.
Relationship
Marketing
The process of building
a relationship with customers which
results in the customers becoming
more loyal, buying more, and staying
as customers. Another word for
Database Marketing.
Respondent
Someone who has answered a direct response
letter or advertisement.
Response Rate
The percentage of
people who responded to your offer.
A typical direct mail response rate
to prospects is 2%.
Response
Device
On every outgoing direct mail piece, there is included a
response device which usually shows
up in the "window" in the envelope
to provide the name and address. The
response device is an order or
donation form. It is important
because it usually contains the
prospect number, and a source code
that identifies the offer, package,
list, segment, etc.
Retention
The tendency to keep
customers buying. Success is
measured by retention of customers.
Retention Budget A budget for a
program to keep customers from
leaving.
Retention Rate
The percentage of customers who
continue to make purchases from you
in a second period, such as a year.
If you had 4,000 customers who
bought from you last year and this
year 3,000 of those same people also
make purchases, your retention rate
would be 75%.
Return on
Investment (ROI)
A key measure of
the success of any direct marketing
activity. It is the total net profit
from a direct marketing initiative,
divided by the total cost of the
entire operation. ROI from an
initial offer is often negative. But
when customer lifetime value is
taken into account, it often becomes
positive.
RFM
Stands for Recency, Frequency, Monetary. It is a method for
segmenting or rating your customers.
The best customers are those who
have bought from you recently, buy
many times, and in large amounts.
RFP Request for Proposals; the
document which is used to get
external database service bureaus to
bid on maintaining your marketing
database.
Rollout
After a
direct mail test of a few thousand
letters, a rollout is the mailing to
the rest of the names on the
successful lists. It may be preceded
by a second test or "continuation".
ROP
Run of press, or Run of Paper. Advertising space
purchased which the paper may insert
wherever they see fit.
Running Charge
The price a list
owner charges for names run or
passed, but not used by a specific
mailer. When such a charge is made,
it is usually to cover extra
processing costs.
Satisfaction Survey
A survey of customers designed as much to learn something
about customers for relationship
building purposes as it is to learn
about good and bad features of your
servicing of the customers.
Saturated Market
A situation in which everyone has
the product, and the market is
essentially a replacement market.
For example, tires, batteries, room
air conditioners, television.
SCF
Sectional Center Facility.
The first three digits of the U. S.
Zip Code.
Seeds
Names of
yourself, friends, relatives, or
employees inserted in a direct mail
mailout to track delivery and
quality, and to safeguard against
unauthorized mailings. Also called
"decoys".
Segmentation
To divide outgoing direct mail into coded
groups for testing or to improve
response. Also used to classify
customers into groups for varying
tactics.
Sequential
The
way records are arranged on a tape.
The opposite is random order, or a
relational database.
Sic code A
coding system designed by the U. S.
Department of Commerce for
classifying the products and
services produced by companies. It
is a very inadequate system, but it
is the only one around.
SKU
Stock Keeping Unit: a warehouse term
for the products that a company
produces. Each different product has
its own SKU number.
Soft Bounce
A soft bounce is an e-mail message that
gets as far as the recipient's mail
server but is bounced back
undelivered before it gets to the
intended recipient. A soft bounce
might occur because the recipient's
inbox is full. A soft bounce message
may be deliverable at another time
or may be forwarded manually by the
network administrator in charge of
redirecting mail on the recipient's
domain. On the other hand, a hard
bounce is an e-mail message that has
been returned to the sender because
the recipient's address is invalid.
Source Code
A series of letters
or numbers affixed to an outgoing
advertisement or promotion that
identifies the list, the offer, the
package, and the segment (as well as
the media) in which the promotion
was made. Essential to testing the
success of any direct marketing
effort. The source code must appear
on the response device (or in the
case of telephone orders, must be
asked for by the telemarketers).
SQL
A query language used with
the IBM software DB2 Often
pronounced "sequal".
SRI
Stanford Research Institute. A
leading research institution which
pioneered Psychographics.
Statement Stuffer
An offer or
newsletter included with a monthly
invoice or statement to a customer.
Stratification
Adding
demographics to a name and address
file.
Suppression
Using names on one tape (a customer
file) to suppress or drop names from
another tape (a prospect file).
Sweepstakes
An offer promising a randomly drawn prize to all
respondents, regardless of whether
they buy your product. Those who do
not buy, but still respond to the
sweepstakes may be valuable names
for rental or for other offers. In
comparison to buyers, sweepstakes
respondents are generally much less
valuable.
System Integrator
Someone who can integrate the
functions that have been outsourced
to several different companies.
Target Marketing
A marketing strategy aimed at a particular individual or
group rather than to mass media.
Telemarketing
Talking on the
telephone to prospects or customers.
Inbound telemarketing is usually
customers or prospects calling your
toll free number. Outbound
telemarketing is when you place the
call to a prospect or customer.
Telemarketing can be done by your
in-house staff or by an external
telemarketing company.
Terabyte
A terabyte is a measurement term for data
storage capacity equal to 1000
gigabytes, i.e. one trillion bytes.
Terminal
A device that looks
like a television screen with a
keyboard which, when hooked up to a
computer, enables to enter data into
the computer, and receive data from
it which you see on the screen. The
alternative to a terminal is a PC.
Test Database
All marketing databases should have a companion test
database which programmers use to
write and test new software before
it goes on the production database.
Third Class
Over 85% of all U.
S. mail carrying advertising or
promotion is sent by third class. It
is much less costly than first
class. It usually requires postal
pre-sort.
Tiger
A Census
system for mapping the entire United
States by Blocks, complete with
roads and other landmarks. Customers
and prospects can be shown on a map
using geodemographic codes to
represent where they are.
Universe
Total number of those
who might be able to be included in
a mailing list; all of whom fit a
single set of specifications.
Update
To modify a database record to insert new
information into it, or to delete
it. Updating is either done in batch
mode (fast and cheap) or on-line
(slow and costly).
Up Selling
Prompting customers to buy upgraded
products when they had intended to
buy something of lower value.
UPS Uninterruptable Power Supply. A
system of batteries that permits a
mainframe to keep going even when
the power fails. It is usually
connected to a diesel generator that
kicks in as soon as the batteries
have begun to be needed.
WATS
Wide area telephone service.
An "800" number whereby the call is
free to the caller.
Weights
Numbers that are multiplied by
database values to determine model
or RFM scores.
White mail Mail
received from a buyer or donor who
has not included the response
device, so you cannot determine the
source code of the offer which
promoted his purchase or gift.
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