Glossary of Loyalty Terms

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GLOSSARY OF LOYALTY TERMS

This glossary defines terms used by marketers, suppliers, technologists and data analysts when discussing customer loyalty and CRM programmes. If there is any jargon confusing you let us know and we will include it in this glossary.
Email: Glossary@businessassyst.com

[A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L] [M] [N] [O] [P] [Q] [R] [S] [T] [U] [V] [W] [X] [Y] [Z]

A

Above the Line
Advertising through television, radio or published media is "above the line" expenditure. Direct marketing, is "below the line".

ACORN
A consumer classification scheme based on residential property information. Used for selection and targeting groups of consumers.

Affinity Card
A co-branded credit card linked to a special consumer interest eg a charity, sports club etc.

Affinity Marketing
Campaigning to a customer group with similar interests.

Average Spend
The average amount a customer spends per individual sales transaction. A key objective of a loyalty programme is to increase this.

B

B2B
Business-to-business. Direct communication from one company to another.

B2C
Business-to-Consumer. Direct communication from a company (eg retailer) to a member of the public.

BarCode
Used by retailers to scan goods at the checkout. The bars convert into a unique code for each item.

Basket Analysis
Analyzing the association of individual product items purchased in the same transaction.

Below the Line
Opposite to above-the-line. Promotional channels such as direct mail, telemarketing, electronic media, displays, leaflets and brochures and sales promotion and other media.

Bricks & Mortar
Businesses/retailers that operate in the high street, as opposed to just the Internet.

Business Process Outsourcing (BPO)
Using external services providers, who have special expertise orlower costs/overheads of services and functions.

Business Process Re-Engineering (BPR)
The strategic analysis of business processes and the planning and implementation of improved business processes.

C

Campaign
A term given to advertising, promotions or sales. It describes a co-ordinated series of activities built around a theme and designed to achieve a particular objective.

Campaign Effectiveness
Measures the success (or otherwise) of campaigns

Campaign Management
A marketing campaign is a set of promotions that are directed at a specific group of customers to get them to behave in a certain way (eg spend more). Managing the campaign involves coordinating the activities such as customer segmentation, design and fulfilment.

Channel
The method of distributing products and services end customers. Retailers, resellers, wholesalers are examples of different channels.

Channel Profitablity
Analyzes channel performance and profitability by product revenue and total sales.

Campaign Effectiveness
Measures the success (or otherwise) of campaigns

Chip Card
A plastic card with an embedded computer chip. The chip is used to store security information in payment cards and stores points balances, name, date of birth etc in loyalty cards.

Churn
A term that describes customer attrition, or customer defection. A high churn rate implies high customer disloyalty. Often loyalty programmes are introduced to improve retention (ie reduce churn). Improving retention by just 10% doubles the lifetime value of a customers.

Clicks & Mortar
A business that has successfully integrated its online e-commerce channel with its offline Bricks & Mortar (high street) outlets.

Cluster Analysis
A data mining technique for grouping data into groups (clusters) with similar characteristics.

Co-Branded Card
A (normally payment) card issued by two companies. For example Visa and XYZ Retailer.

Communications Channel
The method of 'talkin' to the customers, eg email, surface mail, SMS, call centre, website etc.

Cluster Analysis
A data mining technique for grouping data into groups (clusters) with similar characteristics.

Consumer
A member of the public who purchases products.

Consumer Segment
A group of individual Consumers who have like characteristics such that they can be communicated in the same way.

Cost Benefit Analysis
Measuring the Return on Investment (ROI) of a programme to calculate whether it's worth implementing.

CRM (Customer Relationship Management)
Maintaining a single-view of the customer enabling one-to-one marketing with customers on an individual basis.

Cross Selling
Selling related products/services to the customer to increase spend.

Customer Acquistion
Increasing the size of the customer base by acquiring new customers.

Customer Acquistion Cost
The cost of acquiring a new customer through marketing and promotion. The cost that is saved every time an existing customer is retained.

Customer Database
Repository of all information related to customers, such personal details, transaction data, mailings, contacts, preferences etc.

Customer Insight
Deep knowledge of the behavioural patterns of customers.

Customer Loyalty
The degree to which customers are predisposed to stay with your company and resist competitive offers.

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