pany has very little time to prepare a defense. Time is a critical element in churn defense, SO it is important for a company to have a clear picture of what options it can implement when necessary. eXcellence in Telecommunications The Telco Churn Handbook Loyalty Appeal Campaigns One of the least effective reactive churn campaigns that I have ever seen is what I call a "loyalty appeal" campaign. This campaign, launched via television, posters, billboards, and other mass media, attempts to directly stir up feelings of loyalty in the customer. The objective is to get the customer to associate their current provider with stability and to get the customer to think twice before switching providers because if they did they would be leaving a very good friend behind. Parity Campaigns The most popular response to churn activity initiated by a competitor is known as a parity campaign. In this type of campaign, a company analyzes what incentives the competition is offering the customer, such as discounted price, better service, or wider coverage. Then the company responds by matching the competitor's offer SO that its customers will agree to stay. Parity campaigns can be effective in the short run, but they establish several bad precedents and consequences in the long run such as: Causing customers to be more price sensitive Making your company look bad and giving the impression that the only reason for the price reduction was because of the competition. (Although this may be true, you still don't want your customers to focus on this issue.) Causing your company to offer discounts to customers who really do not deserve them. Setting a precedent where customers will look for equivalent action every time your competitor initiates a campaign. Predictive Response Campaigns The loyalty appeal and the parity campaigns can be launched quickly to respond to a churn event initiated by a competitor. However, these campaigns also have several disadvantages. One disadvantage is that they are blanket campaigns. In other words, these c