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Direct Marketing Glossary

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Direct Marketing Glossary

A

Active customer/active donor

A person who has made a purchase or a donation during the last twelve months

Address enhancement

The process of improving the quality of a consumer or business address

Address referencing

The process of documenting the source of an address

Advocate

A product’s or services best and most loyal customer who receives incentives and information to help building the business.

Average order value

The total revenue generated from a program divided by the total number of orders equals the average order value

Automatic call director (ACD)

A computer that handles incoming calls. An ACD directs the call to an inbound communicator. If all communicators are busy, the ACD plays a tape recording and directs the call to the next available communicator.

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B

Backend analysis

The analysis of responses and measurement of a mailing’s performance; information gained here is used to build a buyer profile for future mailings.

Behaviour segmentation

Dividing a market into groups based on their knowledge, attitude, use, or response to a product.

Bounce back

An offer enclosed with a mailing sent to fulfil a customer order.

BRC

Business reply card

BRE

Business reply envelope

Break-even

The point in a business project when income equals expenses

Business list

A compilation of names of individuals and/or companies used for marketing purposes. May be based on attendance, business associated interest, inquiry, subscription, purchase or membership.

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C

Cash buyer

A buyer who encloses payment with an order

Cash on delivery (COD)

The balance of an order is settled when it is received.

Cell

In reference to lists, a cell is a statistical unit; a group of individuals selected from a file on a common basis.

Cold list

A list of people who have no prior relationship with the advertiser. Cold lists are used to generate sales leads.

Compiled list

Any list of names and addresses that can be compiled from a variety of different sources including newspapers, directories and public records which identify groups of people with common traits.

Conversion

The process of turning a prospective customer into a first time buyer or a first time buyer into a repeat purchaser

Consumer list

Lists of names (address and telephone number) of private individuals, which result from an inquiry or buying activity indicating a general purchasing interest.

Consumer profiling

The process of building profiles of consumers based on their purchases. Consumer profiles contain both demographic data and product preferences.

Cost per inquiry (CPI)

Formula derived by dividing the total cost of a mailing or advertisement by the number of inquiries received.

Cost per order (CPO)

Formula derived by dividing the total cost of a direct marketing campaign by the number of orders received.

Cost per thousand (CPM)

Common rate for list rentals

Coupon

Part of an advertising promotion intended to be completed by the customer and returned to the advertiser.

Cross-selling

Selling related goods and services to a customer

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D

Database

A collection of related data such as a company’s prospects or customers organised for efficient retrieval and management.

Database marketing

The systematic use of analytical tools and customer data to build customer rela-tionships

Data mining

The process of finding hidden patterns and relationships in the data. Using a com-bination of machine learning, statistical analysis modelling techniques and database technology, data mining finds patterns and sublte relationships in data and infers rules that allow the prediction of future results. Typical applications include market segmentation, customer profiling, evaluation of retail promotions, and credit risk analysis.

Data protection

Data protection laws protect personal privacy, requiring fair and lawful processing of personal information, and restricting what can be done with it and to whom it may be disclosed. Anyone processing personal data must have details of the activity recorded on a public register.

Data warehouse

A data warehouse collects, organises and makes data available for the purpose of analysis – to give management the ability to access and analyse information about its business.

De-duplication

Controlled duplication which makes sure that no matter how many times a name and address is on a list, or how many lists contain that name and address, it will be mailed only once. De-duplication can also be called “merge/purge”.

Demographic segmentation

Dividing the market into groups based on demographic variables such as age, sex, family size, family life cycle, income, occupation, education, religion, race, and nationality

Deutscher Direktmarketingverband (DDV)

German association of direct marketing users, service providers and media/carriers. SAZ is a DDV member since 1981. For further information see www.ddv.de

Direct Marketing

Marketing through various advertising media that interact directly with consumers, generally calling for the consumer to make a direct response.

Direct Marketing Association

American association of direct marketing users, service providers and media/carriers. For further information see www.the-dma.org

Demographics

Statistical population data including age, sex, location, education, occupation, income etc.

Donor care

A process to reward donors who continually support a charitable organisation

Donor list

A list of those who have given money to charitable organisations

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E

Electronic mail response system

Software that can read and interpret an electronic mail message. It draws information from an electronic ‘knowledge base’ in order to send an almost instant automatic response by electronic mail.

F

FEDMA – Federation of European Direct Marketing

FEDMA is the single voice of the European direct marketing industry. Its national members are direct marketing associations (DMAs) representing users, service providers and media/carriers of direct marketing. For further information see www.fedma.org

Free-standing insert

Leaflet or other printed material inserted loose in a newspaper or magazine

Frequency

The number of times an individual has ordered over a certain period of time

Fulfilment

All activities involved in the processing and servicing of mail, fax and telephone orders.

H

House list

Any list of names owned by a company compiled through donations, inquiries or purchases that is used to promote the company’s products or services.

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I

Inbound telemarketing

Handling an incoming call from a prospect or customer.

Insert

Promotional piece placed in an outgoing package or invoice.

Instalment buyer

A person who has ordered goods or services but pays for them in periodic instalments

Integrated marketing

A combination of two or more forms of media used to sell a product or service.

L

Lead generation

The process of finding people (consumer or business) with a qualified interest in a certain product or service

Lead qualification

Determining a prospective customer’s level of interest, willingness and ability to buy a product or service

Letter shop

Company that performs the mechanical details involved with mailing including addressing, imprinting, collating, etc.

Lifetime value

The total profit or loss estimated or realised from a customer over the active life of the customer’s record.

List building

The process of gathering names and addresses and compiling them into a database for direct marketing purposes

List broker

A specialist who makes all the arrangements for one company to make use of another company’s list. Services include research, selection, recommendation and subsequent evaluation.

List cleaning

The process of correcting or updating a name and address from a mailing list

List compilation

Building a list of names and addresses from a variety of sources, including directories, newspapers, public records, trade show registrations, etc.

List maintenance

Any method that keeps name and address records up-to-date

List sample

A collection of names selected from a list to evaluate the responsiveness of the list.

Literature fulfilment

The process of sorting and qualifying leads, sending the appropriate information, and, if outsourced, forwarding leads to the marketer for follow-up.

Loyalty program

A program to reward customers who continually use a company’s products or services

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M

Mailing list

Names and addresses of individuals or companies with a common interest, activity or characteristic.

Mail preference scheme (MPS)

A service where consumers can request to have their names taken off or added to lists

Market segmentation

The process of classifying customers into groups with different needs, characteristics or behaviour. Dividing a market into distinct groups of buyers who might require separate products or marketing mixes

Member-get-member (MGM)

A promotion where existing members are offered a gift or incentive for enrolling new members.

Micromarketing

Marketing programs tailored to small geographic areas or individual stores based on demographic data and a database of store-level information

Monetary value

Complete expenditure of a customer during a specific period of time

MOVERS 4RENT

SAZ data pool of people that have moved within Germany

Multiple regression

Statistical technique used to compare the responses of a mailing list with census demographics and list characteristics of mailing lists. Used to target mail to the best types of people or areas. This technique is also used to analyse customers, sub-scribers, etc.

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O

Outbound telemarketing

Calls that are placed by a marketer, as opposed to inbound telemarketing where the customer calls in first

P

Package test

A test of one or more elements of a mailing package against another

Paid circulation

Distribution of a publication to individuals or companies that have paid for a sub-scription.

Predictive modelling

Algorithms used to forecast consumer behaviour

Product fulfilment

Storage and shipping of samples and merchandise

Prospect

A potential buyer for a product or service who has yet to make a purchase

Psychographic segmentation

Dividing a market into different groups based on social class, life style, or personality characteristics

R

Recency

The latest recorded information about a company or customer on a customer list, in relation to purchasing or another recorded activity.

Relational database

A database built using the relational model, based on tables linked by a common key. Relational databases do not have any predefined access paths, and the order of records within each table is arbitrary.

Relationship marketing

Blanket term for a marketing philosophy and various practices designed to identify the customer, treat customers as individuals, build loyalty, and measure programs on the basis of contribution to long-term value.

Renewal

A subscription that has been renewed prior to it expiring or within a certain period after that date.

Response rate

Amount of responses received as a percentage of total packages mailed.

RFM or RFMR

Acronym for Recency Frequency Monetary Value Ratio. RFM is a formula to evaluate the potential of a mailing list to create responses.

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S

SAZsmartADDRESS

SAZ subsidiary specialised in enhancing address quality. For more information see www.address-services.saz.com

SAZsmart.base

Unique database platform developed by SAZ to cater for all direct marketing needs.

Selection criteria

Refers to characteristics that identify segments or sub-groups within a list.

Self-mailer

A self-contained mailing piece that is designed to form an envelope when folded, therefore not requiring a separate outer envelope.

smartAUDIT

Diagnostic SAZ program to check addresses regarding postal spelling, gender, address changes, obituaries and identification of movers

smartUPDATE

SAZ program to identify, replace or correct wrong or old customer addresses

smartCLEAN

SAZ program to clean a mailing list of all addresses identified as undeliverable

smartCORRECT

SAZ program to replace old or invalid addresses with new ones for one-time usage

smartCONFIRM

SAZ program to verify and confirm postal addresses

smartDECEASED

SAZ program to identify and delete death cases in a mailing list

smartPHONE

SAZ program to change mail into call addresses

Social marketing

The design, implementation, and control of programs seeking to increase the acceptability of a social idea, cause, or practice in target groups

SQL (Structured Query Language)

The standard language for accessing relational databases

Subscriber

Person who has paid to receive a periodical

Subscription fulfilment

Business service including maintaining the subscriber list, generating invoices and renewals and recording payments

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T

Targeting model

A method of selecting better customers for a given promotion using a scoring algorithm or a popular regression technique

Telemarketing

Using telecommunications in sales and marketing efforts.

Telesales

Telephone selling where the marketer has a dialogue with the prospect.

U

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.

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