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Term
Race to the bottom	Self-destructive competition between national or regional governments, resulting in lower wages and less regulation to attract foreign investment in a globalized economy.
Rack rate	The full, publicly listed price for a good or service. This is almost always the maximum price charged for the offering.
Radical innovation	Innovations based on a broad range of knowledge from different sectors, recombining this to create new and very different products.
Raid	Redundant Array of Inexpensive Disk, a new technique for storing records on PCs and Mainframes. Greatly reduces the cost of disk storage.
Random Access	Modern computer disks can access database records in random fashion. The opposite is sequential access. Random access makes database marketing possible.
Rate of return	This is represented as a percentage and is the annual income an investment makes back.
Ratio scale	A scale that uses distances on a graph to represent ratios. For example, the ratio between 3 and 6, and between 6 and 12, is the same (the larger number is twice the smaller number). In a ratio scale chart, all changes by the same ratio are represented by the same vertical distance. This contrasts with a linear scale, where the distance between 3 and 6, and between 6 and 9, is the same (in this case, 3). Also known as a log scale (in for example, Microsoft Excel).
Rational actor	A person who acts in his own best interests.
Rationed goods	Goods that are allocated to buyers by a process other than price (such as queueing, or a lottery).
Razoo	A fictitious coin without monetary value. This term is most commonly used in Australia.
Reactivation	A program which encourages lapsed customers to start buying again.
Real estate loans	A commercial mortgage is a term loan used to buy, develop or refinance commercial property, such as a warehouse, mixed-use building or retail center
Real interest rate	The rate of interest minus the current rate of inflation.
Real values	Real values show how relative particular prices are to prices in general. They are adjusted according to inflation.
Real wage	The nominal wage, adjusted to take account of changes in prices between different time periods. It measures the amount of goods and services the worker can buy. See also: nominal wage.
Rebadge	To relabel or rebrand an item so as to obfuscate its history, producer or customer base
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.
Recession	The US National Bureau of Economic Research defines it as a period when output is declining. It is over once the economy begins to grow again. An alternative definition is a period when the level of output is below its normal level, even if the economy is growing. It is not over until output has grown enough to get back to normal. The latter definition has the problem that the ‘normal’ level is subjective.
Reciprocity	A preference to be kind or to help others who are kind and helpful, and to withhold help and kindness from people who are not helpful or kind.
Record	A collection of fields that describe all the information on a customer.
Redistribution policy	Taxes, monetary, and in-kind transfers of the government that result in a distribution of final income that differs from the distribution of market income. See also: predistribution policy.
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.
Registered agent	An individual or entity that has been designated by your business to receive service of process documents linked to legal actions, as well as compliance-related notices and other state government correspondence.
Registered office	A physical location where the registered agent of a limited liability company can receive legal papers for the company.
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.
Regressive (policy)	An expenditure or transfer that increases the incomes of richer households by more than poorer households, in percentage terms. See also: progressive (policy).
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.
Relative price	The price of one good or service compared to another (usually expressed as a ratio).
Reliability	Reliability is defined as the probability that a product, system, or service will perform its intended function adequately for a specified period of time, or will operate in a defined environment without failure.
Remittances	Money sent home by international migrant workers to their families or others in the migrants’ home country. In countries which either supply or receive large numbers of migrant workers, this is an important international capital flow.
Rent ceiling	The maximum legal price a landlord can charge for a rent.
Repeated game	A game in which the same interaction (same payoffs, players, feasible actions) may be occur more than once.
Research and development	Expenditures by a private or public entity to create new methods of production, products, or other economically relevant new knowledge.
Reservation indifference curve	A curve that indicates allocations (combinations) that are as highly valued as one’s reservation option.
Reservation option	A person’s next best alternative among all options in a particular transaction. Also known as: fallback option. See also: reservation price.
Reservation price	The lowest price at which someone is willing to sell a good (keeping the good is the potential seller’s reservation option). See also: reservation option.
Reservation wage	What an employee would get in alternative employment, or from an unemployment benefit or other support, were he or she not employed in his or her current job.
Reserve price	The minimum acceptable price for an item at auction. This number is not necessarily revealed to bidders.
Reserves (natural resource)	The amount of a natural resource that is economically feasible to extract given existing technologies. See also: resources (natural).
Residual claimant	The person who receives the income left over from a firm or other project after the payment of all contractual costs (for example the cost of hiring workers and paying taxes).
Resilience	Resilience is associated with greater job satisfaction, work happiness, organizational commitment and employee engagement. Raising resilience contributes to improved self-esteem, sense of control over life events, sense of purpose in life and improved employee interpersonal relationships.
Resources (natural)	The estimated total amount of a substance in the earth’s crust. See also: reserves (natural resource).
Respect	Behavior that shows regard for another person with esteem, deference, and dignity. It is a personal commitment to honor other peoples’ choices and rights regarding themselves and includes sensitivity and responsiveness to a person’s culture, gender, age, and disabilities.
Respectfulness	Respect is defined as to feel or show esteem or honor for someone or something.
Respondent	Someone who has answered a direct response letter or advertisement.
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.
Response rate	The percentage of people who responded to your offer. A typical direct mail response rate to prospects is 2%.
Retained earnings	The net income that a firm has earned and kept within its possession.
Retainer agreement	A pact in which one party pledges prepayment for services that the other party will render in the future.
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	The income received from a transaction. Often displayed as a percentage, rather than in absolute terms. Note that the return need not be purely monetary. Many companies see other factors such as goodwill or entrance into new markets to be an excellent return on investment.
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.
Return on investments (roi)	Measures a business’s gains and/or losses generated by spending activities; a standard profitability ratio. The ratio calculates the value of the investment as a percentage of the original cost.
Revealed preference	A way of studying preferences by reverse engineering the motives of an individual (her preferences) from observations about her or his actions.
Revenue	Amounts of money received by (or owed to) a company for goods or services provided.
Reverse causality	A two-way causal relationship in which A affects B and B also affects A.
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.
Risk	The likelihood and severity of an event. Although risk usually applies to undesirable outcomes, some fields (such as project management) routinely utilize the term ‘risk’ to also apply to desirable outcomes as well.
Risk Management	Risk management is the process of identifying, assessing and controlling threats to an organization’s capital and earnings. These risks stem from a variety of sources including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.
Risk premium	A sum of money used to compensate a party for accepting exposure to potential losses.
Rival good	A good which, if consumed by one person, is not available to another. See also: non-rival good.
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.