 When they do, they often realize that it is possible to win them back by running reacquisition campaigns. These campaigns are often successful but, of course, entail costs of their own. The Cost of Customer Retention The more proactive organizations actually create campaigns to help prevent people from leaving in the first place. These loyalty or retention campaigns allow the company to make offers or create customer relationship experiences that help the consumer decide not to leave the current provider. Advertising Escalation In addition to these direct costs, a churn environment also creates some side effects. When churn starts, one of the first things a company will do is to increase its advertising to have more media "face time" than the competitor. By escalating advertising in response to a churn threat the wireless company actually opens up a challenge to the competitor to do the same. In some markets that battle for media supremacy continues, and the baseline advertising investments keep escalating. Chapter 1 The Price Spiral In addition to the increasing expenses that this battle creates, an equivalent battle to continuously drop prices lower than the competition will also occur. This downward price spiral, obviously, leads to more and more revenue loss. Organizational Chaos Although the costs of churn are substantial from an economic perspective, they pale to the consequences that churn environment have on the working environment within the telco. Churn is, unfortunately, not a condition that most wireless companies are prepared to face. When churn troubles begin, they take their toll on the people, the processes, and the organizations as they struggle, often unsuccessfully, to address the problems. Planning and Budgeting Chaos One of the obvious side effects is a planning and budgeting chaos. How can you project your revenues and headcount for the year when a large percentage of the customers suddenly start leaving? Even more importantly, how can you make decisions about how to best invest money to pr