en accepting a concept as having some validity in theory and understanding the underlying consequences that truly accepting these principles entail. As we review each of these "rules" of churn, it is important is that you consider the impact these rules have on your basic assumptions about how your company and your customers need to be managed. Churn Always Happens The first and most important rule to understand is that churn always, always, always happens. Now as obvious as that might seem to some people, it is actually a very difficult concept for a telecommunications professional to accept in most situations. CHURN ALWAYS HAPPENS, EVENTUALLY Figure 7.1 The fact of the matter is that, until very recently, the concept of customer churn was unheard of in telecommunications circles. Basically, customers did business with you or went without a phone. In today's competitive environment, however, churn is quickly becoming a market reality. Chapter 7 It Won't Happen Here There seems to be an unrelenting optimism with many executives that let's them believe that their firm and their market will miraculously be immune while other markets are suffering from churn. In some situations, this belief may seem well founded in fact. There are several forces that will prevent churn from becoming an issue in your market. Regulatory Environment When regulators seem reluctant to allow competitors into the marketplace then, yes, you will be immune from churn for a while. However, it is critical that we not overlook the following. 1. The United Nations and many other agencies have proven that the deregulation of telco is good for the economies of the world, and that the more liberal the regulation, the bet- ter for consumers. 2. New technologies can come around in a very short time frame, creating situations where customers will turn away from your technology entirely. Market Dominance A manager may feel confident that churn will never be an issue because the firm is currently performing as the dominant player in their market. If the