 been finalized, we will return to our central database of customer information and gather all of the input variables into a file. The CVF variable file will then be read into the CVF calculation program. This program will read the file and calculate the actual functions. Chapter 13 Two TYPES OF CUSTOMER VALUE FUNCTION The CVF can take several forms, depending on your use. The fact that it is supposed to provide us with one number to represent relative customer value does not mean that it will not take on different forms for different applications. The Customer Value Function Index ACVF index is a number that assigns a relative value to a customer's worth based on different scales. The most commonly used scales rank those customers on a numeric basis. For example, "Rank all customers on a scale of 1 to 10, where 1 is a very high value and a 10 is the lowest value." These scales can cover any number of ranges. For example, you might go from 1 to 100, or from negative ten (-10) to positive ten (+10). In all cases, as long as the index is built and used consistently, the same result will be achieved. A categorical, rather than numerical, scale might be used as well. For example, you might create categories of customers with "Very High Value," "High Value," "Average Value," "Low Value," and "Very Low Value." In fact you could use both. The Customer Value Function Ranking Sometimes having a simple index of values is not enough. Sometimes the organization would like to see the relative value of a customer across the entire population. In this case, a CVF ranking is created. Basically, a ranking submits all customers and ranks them in relation to each other. For example, if you had three million customers, the CVF ranking would assign a unique number to each of them, SO that your most valuable customer would be 1 and the least valuable 3,000,000. eXcellence in Telecommunications The Telco Churn Handbook MAKING Use OF THE CUSTOMER VALUE FUNCTION Developing a file full of CVF numbers, in and of itself, provides us with no