ressure. eXcellence in Telecommunications The Telco Churn Handbook No Differentiation of Product or Service When consumer response models are based on the assumption that the quality and nature of the products and services are basically the same, no matter what price you charge, then consumers will constantly search for the lowest price possible. No Reason to be Loyal It creates a situation where: a) Consumers see no differentiation of goods and services, therefore b) There is no reason for consumers to feel loyalty of any kind. ATTACKING THE RATE PLAN ASSUMPTION If you really want to change the underlying paradigm that creates and propagates churn, then you must attack it at the source. You must question your dedication to rate plans as the unit that defines what you are selling to customers. Changing the Rate Plan paradigm Changing the dependence the organization has established on the rate plan is no small task. It will require serious rethinking of the basic nature of how the telco is organized. Billing System/Rate Plan Dependency At least in the short term, the practice of special codes used to identify customers and the products and services they receive will need to continue. The billing system is still the core of any telco, and will continue to be for some time (at least until flat rate billing Chapter 21 replaces the current mode.) This means that the telco will have to build whatever new paradigm it will work with by leveraging that functional requirement. You cannot get rid of rate plans, or more specifically, you cannot eliminate the use of a code to identify the type of contract the customer has. You can, however, make use of the codes to do more than simply indicate the cost of service. Introducing the Relationship Code and Relationship Plan In fact, instead of eliminating these codes, we will have to increase their usage and importance. As an alternative for using the codes to specify the cost of service, it will also indicate what types of products, services, and other values the customers expect