line industry. Here, customer loyalty is an incredibly serious problem. There is fierce competition for price, travel times, locations, and a myriad of other factors that influence a consumer's decision. More importantly, the difference in revenue and profit gained from a high value customer is much greater than from a low value customer. Chapter 6 The airlines desperately needed an approach that would dynamically and continuously monitor the potential value of a customer, and an approach that would adjust a customer's status and treatment accordingly. The program the airlines instituted was simple and straightforward. The number of miles that a customer flies is tracked and totaled. When the customer accumulates a certain number of miles within a certain period of time, his or her status has changes and a whole new level of service, benefits, and privileges is now made available such as: quicker check-in, preferred seating, and higher priority during waiting. As the customer travels more and more miles, the status and availability of benefits from the airline continue to increase. What makes the preferred customer approach SO much more effective than other approaches is that it constantly reinforces and strengthens the bond between the customer and the company. It accomplishes this by implementing a system that relies upon an ongoing customer loyalty and company recognition that encourages continuous transactions. REACTIVE CHURN MANAGEMENT While it should certainly be the goal of every company to develop as much pro-active and pre-emptive churn management activity as it can, this is not always possible. There are several reasons a company might find itself in a position where large numbers of its customers begin leaving with little or no advance warning. (In the next chapter we will explore some of these situations.) When this occurs, the company's only alternative is to react and to try to stop or slow the churn. Reactive Management Techniques A reactive churn situation is very difficult to deal with when a com