ving them a phone is an important one. The looser the credit requirements for subscription, the more customers you will have, but the more credit problems you will have in the future. On the other hand, tighter credit constraints up front force many customers to consider the competition. Establish Cutoff Dates The second layer of credit churn exposure is to control the period of time that you allow people to go without payment. In some markets the payment is allowed to lapse for as long as 180 days. In others it Chapter 3 is as short as 30 days. In all cases, the tradeoff problem is the same, the tighter your restrictions the more likely you are of antagonizing otherwise good customers who might be suffering a temporary cash flow problem. Friendly Acquiescence One of the nicer ways to develop your credit churn escalation procedure is to gradually disable some aspects of the defaulting customers' services, allowing them to have partial use of the service until they return to a fully paid status. You can disable voicemail, call forwarding, and other extra services first, then block outgoing calls, allowing them to only receive calls, and then, finally, disconnect the entire account. The friendly acquiescence is most effective because as long as customers have partial service they are unlikely to go to a new provider. Underutilization Churn (Customers Who Don't Use the Phone) Another new category of involuntary churn that some telcos are beginning to pay attention to is underutilization. For some telcos the fact that customers have a phone and a number but are not making good use of it is reason enough to disconnect them. These telcos keep track of how much a phone is being used and cancel subscribers after a certain period of time. (Underutilization is only an issue for the prepaid customers or those who pay no monthly fees.) Figure 3-5: Underutilization eXcellence in Telecommunications The Telco Churn Handbook MANAGING INVOLUNTARY CHURN The nice thing about involuntary customer churn is that you, the company, have