Skip to Main Content
Hong Kong Post - Linking People, Delivering Business Are you missing your target audience?
Industry Library

If you plan to do Direct Mail, you will find this section very useful. It contains definitions of all the terms commonly used in Direct Mail to help you acquaint yourself with the world of Direct Mail, and to provide you with a clearer picture of what Direct Mail is all about. We've organized the terms in alphabetical order, for your easy reference.


The process by which a marketer turns a prospect or qualified lead into a customer by having that person respond to an offer.
Acquisition Cost
The total cost to the marketer for implementing marketing programmes associated with acquiring customers. Normally this refers to the direct communication costs divided by the number of customers gained. These direct costs include creative, artwork, print, media, etc., but not client overheads or product costs.
Audience Composition
Describes the demographic make-up of the audience of a media vehicle or schedule.

A brand is a set of differentiating promises that link a product to its customers. The brand assures the customer of consistent quality plus "superior" value — for which the customer is willing to give loyalty and pay a price that results in a reasonable return to the brand.
Brand Essence
Brand Essence is the immutable soul of the brand.
  1. It defines what it is.
  2. It differentiates it from other brands.
  3. It cannot be changed without it becoming a different brand.
Brand Essence has three important components:
  1. Brand Value.
  2. Brand Personality.
  3. Brand Identity.
Brand Value
What a brand stands for:
  1. Its mission.
  2. Its reason for being.
  3. What makes it unique.
Brand Personality
What a brand stands for:
  1. The characteristic manner in which a brand behaves and communicates with others.
  2. The behavioural and emotional tendencies that distinguish a brand.
  3. A brand's personality can be thought of, and described, in exactly the same way as that of a human being. Examples: rugged, elegant, loving, etc.
Brand Image
Brand Image is the totality of how a brand is perceived. It embraces perceptions of Brand Attributes, Benefits, Values and Personality. Unlike Brand Essence — which defines what a brand is, and so does not change — Brand Image can vary dramatically from one Target Group to the next.
Brand Equity
Brand Equity is the sum total of a brand's assets. It includes Brand Image, but is much broader than that. It also includes:
  1. Brand Awareness.
  2. Brand Image.
  3. Brand Loyalty.
  4. Patents, Trademarks, Distribution Agreements, etc.
Brand Experience
Each customer's cumulative experience, understanding, knowledge and familiarity with the brand is built up over time from every interaction between that customer and the brand, physical and virtual; similarly, the nature of the interaction with the brand at every point of contact also makes for a different experience.
Break Even Analysis
The marketer carefully estimates the costs and prices of the produce and service that he or she is going to promote, calculates and finds out at least how many orders the campaign has to generate in order to break even on the promotion expenses that he or she is going to commit. This is one of the most important analyses that a Direct Mail marketer must do in order to rationalize and justify every single dollar that he or she is going to invest. This exercise will also inspire the marketer to refine the campaign and significantly increases his or her chances of success. A sample and a template are provided for your reference and use.
BRS - Business Reply Service
BRS refers to the envelope that is included in Direct Mail solicitations to enable recipients to respond conveniently via mail. BRS is postage pre-paid (compared with Courtesy Reply Envelopes, CREs, that require the recipient to affix a stamp). BRS usually increases response levels.
Business Reply Card
A card inserted in a direct mail by an advertiser used by consumers to request information for products or services.
BRE - Business Reply Envelope
Reply envelope for orders, payments or inquiries pre-addressed to the seller, usually requiring no postage payment by the responder. See also Acquisition section.

Campaign Analysis
In short, this is the analysis of programme expenses and responses to determine the success of the campaign. It actually involves many exercises, such as Campaign Profit & Loss Analysis, Promotion Break Even Analysis, Sensitivity Analysis of various factors, Test Analysis, and Campaign Post-Analysis, which studies various outcomes of each promotion and interprets its findings to facilitate formulation of future business strategies and plans. This is an essential skill set that all Direct Mail executives should try their best to possess.
Cell Size
The quantity of mailing records within a sample group used in direct mail testing. The proper sample size is determined by two factors: the level of response, and sampling tolerance (or deviation, which is the degree of risk in projecting the test result to the target universe) that the marketer is willing to accept. As long as you have random samples or systematic sampling with a random start, you can manage the cell size (sample size) as a function of the estimated level of response, and the degree of risk the marketer is willing to take, based on some established statistical models, such as a proprietary system, called KOHMAR, developed by Reader's Digest.
Contact Strategy
Communication sequence that takes place with the prospect/customer once a response has been generated. Normally outlined as a flow diagram.
Conversion Rate
The percentage of responses converted to customer status.
CPI - Cost Per Inquiry
CPI is calculated by dividing the total cost of a mailing by the number of enquiries received.
CPL - Cost Per Lead
CPL is calculated by dividing the total cost of a mailing by the number of leads generated for a sales force to follow up.
CPM - Cost Per Thousand
The cost of delivering to one thousand target customers within a defined population group. CPMs are used to compare the efficiency of media vehicles or schedules, e.g. a Direct Mailing to a selected database, compared with a Direct Response Ad in a magazine. CPM = Media Cost (In Dollars)/Gross Target Impressions ('000s).
CPO - Cost Per Order
CPO is calculated by dividing the total cost of a mailing by the number of actual sales.
CPR - Cost Per Response
CPR is calculated by dividing the total cost of a mailing by the number of responses received from the promotion.

Refers to the collection of the list of target customers, including their personal information and interests.
Database Audit
An inventoried evaluation of current data sources, data flows and data processing procedures. A Database Audit often concludes with a recommendation for improvements.
Data Cleansing
Means "cleaning" the list to improve the quality of the information in the database via a series of file processing techniques.
Data Dump
A sample or whole extract of the information contained in a database. Used to develop a better picture of the data in a database.
Data Mining
Data mining is a methodology for gaining greater insight into data held within systems and databases. A data miner's role is to evaluate the suitability and quality of the data for further analysis/mining. Data mining is a process that has to be repeated, and the analysis is refined based on learning.
  1. Data miners need to determine whether the data is reliable, relevant and valid for mining.
  2. After sourcing, the data are integrated and values aggregated for analysis.
  3. The data are then analyzed uni-variately and bi-variately to spot "noise" or "gaps" within the data.
  4. Once a complete data sample has been attained, it will be analyzed.
Data Warehouse/Information Warehouse
A consolidation of data from many disparate operational computer systems within a company (e.g. sales, manufacturing, inventory, marketing, customer) that is extracted, processed and stored in an optimized database structure. The structure is designed to allow direct business users access for reporting and analysis. By consolidating or overlaying data in this way, an organization can derive information and spot connections and patterns that are impossible to identify in individual operational systems. These databases can be huge - 100 Gigabytes for example. As a result, they require dedicated computer systems with large data storage subsystems, powerful (multi) processors and memory, sophisticated operating systems and specialized database software. As a result, a rationalization of this approach has led to the development of DataMarts that are a snapshot of a particular operational system, e.g. Customer DataMart.

NOTE: Data Warehousing is a theory, not a piece of software. Beware of salesmen who tell you otherwise!
A file processing term for removing duplicate records from a base file. Duplicate information may be present in the same file, or could occur through merging several files from different sources. Duplicates in terms of Direct Mailing normally means identifying individuals at home or work. The characteristic way of doing so is by first checking similar surnames within similar addresses within specific areas. To allow for flexibility in this matching process, e.g. for misspelled names and addresses, the matching software can be adjusted to find similar but not exact matches. These matches are normally exported to a special file for manual verification. De-duplication. Direct comparison is a slow and costly process. And the de-dupe rate may not be as high as you expect, because there could be many ways to write a name, especially for the local Hong Kong market - Christian name, phonetics, etc.
Classification of viewers, listeners, readers or people in a database by sex, age, income, education, etc.
The number or percentage of people in a mailing list who are also exposed to another mailing list (i.e. cross duplication). Also the number of people who are exposed to different issues of the same publication, or episodes of the same programme, over time (i.e. self-duplication). Duplication will not only cost the marketer money, but creates annoyance and complaints among mail recipients as well. It is worth spending some effort and attention in this area.
Direct Marketing
Broadly defined in media terms as: "any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order (direct order), a request for further information (lead generation), and/or a visit to a store or other place of business for purchase of a specific product(s) or service(s) (traffic generation)". Also defined as advertising which seeks, or results from, information, and which enables an advertiser to open a relevant one-to-one dialogue with a consumer in order to build an ongoing relationship so as to maximize the lifetime sales and value of each customer. The term "Direct Marketing" was introduced by Lester Wunderman in 1967
Direct Mailing
An interactive and direct communication method that uses a mail pack to market a product or service directly to consumers or businesses, generating direct orders or requests for further information, or visits or actions from the mail recipient. It bypasses traditional distribution channels and, therefore, cuts down significantly on distribution costs and middleman commissions.

Otherwise known as a columns or cells. A sub-unit of a record (otherwise known as a Row), e.g. First Name, Type, Character, Length - 3, Value - "John". Fields contain common information in a common format, e.g. a "Company Name" field should contain just the company name of each record. It is not acceptable practice to have data in different formats in the same field, e.g. in a field called "Number of Children" the data should either be in numeric format, i.e. 0, 1, 2, etc., or text, i.e. one, two, three etc., and not a combination of the two.
All activities in the mail stream performed after direct mail pieces and mailing list data are delivered to the mailing service plant. Also refers to the physical handling of an order, or an information request, or a premium or refund for the customer.

Classification system based on census data. The most complete and representative data set for classifying a population, geodemographics combines geography and demographics to create a targeting tool for profiling and analysis. Other data are added to provide lifestyle information within each category.

Lead Generation
Lead generation involves communicating with prospects to solicit feedback that will assist marketers in learning which prospects will be most profitable and identifying those ready to purchase now vs. later. This information allows marketers to efficiently allocate their marketing funds in a timely manner. Hot prospects, or those ready to purchase immediately, can be contacted as a priority.
List Broker
Refers to an agent who arranges for the rental of lists on behalf of list owners. List brokers perform various marketing and list consideration services. There are many list brokers in Hong Kong and overseas that offer different types and levels of service. You should take great care in defining the requirements of your campaign to a list broker, and in negotiating terms and conditions for using their lists. A lot of attention has to be put into knowing the source of the lists and if there are any risks related to infringement of the Personal Data (Privacy) Ordinance.
A quantifiable representation of a customer's relationship and interaction with a product or brand. Loyalty is desirable to marketers because it drives customer profitability.
Loyalty Driver
A Loyalty Driver is any factor that affects a customer's loyalty relationship with a product, brand or company, as represented by the three Dimensions of Loyalty. Some of these factors are controlled by the marketer (e.g. price, rewards, service quality), and some are not (e.g. income, buying habits, loyalty predisposition).
Loyalty Framework
A model for measuring and managing customer loyalty. The model comprises three distinct dimensions of loyalty:
  1. Desired Behaviour.
  2. Depth of Involvement.
  3. Commitment.
The model can be used both on a conceptual basis to develop strategies and tactics for building loyalty, as well as being applied to customer databases to measure and manage loyalty at the individual customer level.
LTV - Lifetime Value
LTV is the net present value of all future contributions to overheads and profits. There are four primary contributors in calculating a customer's lifetime value:
  1. Future forecasted revenues.
  2. Margin.
  3. Fulfilment cost expectations.
  4. Cost of capital.
It is lifetime value (and the promotional span) that determines whether or not a given effort has produced a profit for the operation. See Loyalty section also.

Mass Marketing
Described by Professor Philip Kotler as "transaction marketing", mass marketing delivers goods cheaply, but is indirect and indifferent to people's specific needs.
MGM and FGF - Member-Get-Member and Friend-Get-Friend Programmes
Customer recruitment techniques that offer an incentive to current members for referring new members. A cost-effective way for direct marketers to identify their best prospects - assuming that those receiving the promotion will only refer friends or associates likely to be interested in the product or service being sold.

The offer is the complete proposition made by the marketer to a prospective customer. It includes the product or service itself, the price at which it is offered, any adjustments to the price, and other elements of the positioning strategy for the product. Usually, a separate leaflet is available listing all the types of offers, e.g. early bird, trial, sample, introductory, etc.
One-to-One Marketing
Also 1:1 Marketing. Using media that permit the marketer to communicate directly with customers individually, a "replacement for mass marketing". This concept is taken from Peppers, Don and Rogers, Martha (1993), The One-To-One Future, New York, NY, Currency/Doubleday.

A method of adding the name of the individual to a mailing piece. Personalization is done by computer, ink-jet imaging or laser printing. VDP, or Variable Data Printing technology has developed significantly in the last few years. It can enable you to personalize not just the name and address in a Direct Mail pack, but also the choice of colour, and even the inclusion of individual photos, to significantly enhance the effectiveness of a campaign.
An item offered to a buyer, usually free or at a nominal price, as an inducement to purchase, or obtain for trial, a product or service offered via mail order. Premiums are used to induce greater responses. In many cases, premiums are also found to have an interactive effect with the price level. Some tests also showed that if a choice of premium is offered, the response rate is further enhanced.
PPI - Pre-Printed Insert
PPI is a print advertising piece that runs in magazines and newspapers. The advertising message is printed on different stock than the publication and is inserted (either bound in or blown in) into the publication. Also FSIs (Free Standing Inserts) or SSIs (Single Sheet Inserts) are commonly used to distribute coupons in the Sunday editions of newspapers, particularly the Food sections.
A method of classifying individuals according to any data category. A profile only has significance if it is compared to a base figure (usually a population). Other bases are used, such as: the client's entire customer base, catchment areas around branches, etc. When comparing a profile against the base population, if the index is below 100 this group is under-represented, and if over 100 it is over-represented. Profiling is used to get a better understanding of the people/organizations that are in the database. Overlays can be added to improve segmentation. For example, after profiling you might know that 25% of the base is female, 22% lives in affluent areas, etc. The Hongkong Post Circular Post Service is enhanced to profile and classify households in Hong Kong into 30 categories, according to their socio-economical status. This improved or Premium Circular Service can help marketers target their prospects more accurately. Please refer to Hongkong Post Circular Service (PDF 248KB, requires Adobe Reader.)in the Basic Guide.
A name on a mailing list considered to be a potential buyer for a given product or service, but who has not previously made such a purchase.

The basic unit of a database. A record consists of a series of attributes or fields relating to that individual or company. A record normally contains name, address and/or purchase or mailing history. A series of records grouped together is called a file.
Relationship Marketing
"To establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfilment of promises." Such relationships are usually, but not always, long-term.
Response Mechanism
The communications vehicle included in a Direct Mail promotion pack that allows the recipient to respond to the offer. Response mechanisms include: coupons, BRS, Free Post, toll-free telephone numbers, business reply cards, order forms, and applications.
RR - Response Rate
Percentage of returns (or requests) from a direct mailing promotion.
ROI - Return On Investment
In Direct Mail, ROI is one of the main ways to measure the effectiveness and profitability of any given promotional effort. If response starts very quickly, the cash yielded often permits multiple use of a given investment, as the charges against that investment are paid off, providing a particularly attractive return on the original cash put at risk.

Sales Promotion
Applying short-term incentives to encourage trial or purchase of a product or service.
A group of consumers who can be marketed to in a unified manner. For any desired outcome, the strategies and tactics are the same for all consumers within the segment. Example: executives who earn HK$1,000,000 or more per year.
The process of segregating or selecting specific records from an entire target audience base or from a mailing list. This is an essential technique for managing databases and increasing their value to the marketer. See also Database and Market Research sections.

Target Audience
The ideal audience for a mailing effort. Usually defined in geo-demographic and psychographic terms.
Copy, usually on the outside envelope, to induce the recipient to open the envelope and find out more. Also refers to a separate mailing sent out prior to the main pack (sometimes called an APC - Advance Postcard - or an ASM - an Advance Sales Mailing) to warm up the prospect without giving away the whole story. Best used if you are expecting higher than average response rates, e.g. when launching a new product to a customer base.
The use of the telephone to increase sales to customers, enquiries and catalogue requesters, or to prospects that already have a relationship with the caller. Telemarketing is more often used as an advance notice or a follow up, together with other interactive marketing programmes, such as Direct Mail.
Profitable DM Guide Related Links
DM Tips
DM Tips   What should you do to build a quality mailing list, create powerful mail pieces and increase response rates?

Dos and Don'ts of Direct Mail

Featured Success Story
Featured Success Story   How a restaurant increased revenue by 400%?

Find out more...

Site Map | FAQ | Privacy Policy | Disclaimer | Security Statement
© 2005 Hongkong Post.