condition, maturity, and direction of the marketplace where you are competing is the first critical issue. If you do not know the saturation level of your current marketplace, then you cannot evaluate the seriousness of your churn problem. Remember that churn can be either negatively motivated (when customers are SO dissatisfied that they will proactively search for alternatives) or positively motivated (when customers are seduced away by better competitive offers). Understanding your market conditions will help you determine which kinds of churn pressure you must address. Several forms of analysis can help evaluate the current market conditions. Determine the Market Life Cycle Stage In Chapter 2, we examined the new technology assimilation cycle and saw how customers gradually come to experiment with, accept, and then drop new technologies in a never-ending cycle of technological maturity. We identified four phases that each new generation of telecommunications technology goes through as it is presented to the market. These phases include startup, expansion, saturation, and decline. Chapter 20 The first step is to define our marketplace in terms of its market life cycle. We can make this determination in several ways. If the industry is less than one year old, then it is highly likely you are in the startup or expansion phase. If the market is more than three or four years old, then you are probably in the saturation phase. If new technologies are dominant on the scene and customer turnover is very high, then you are probably dealing with the decline phase. Determine Current Market Penetration It can also be helpful to ascertain the current rate of penetration for your customer base. By looking at this number for your area and comparing it to the numbers of other areas (different countries or regions of the country), you can decide whether your market has reached the saturation point. The closer you are to saturation, the more likely you, or your competitors, are to participate in predatory churn activity. Revie