vider might be. To put together a truly strategic and effective approach the organization must establish a solid conceptual, organizational, and operational foundation on which all churn management activity is based. Once that foundation is established, it will serve not only eXcellence in Telecommunications The Telco Churn Handbook as the basis for truly effective churn management but as the basis for a clearly superior method for the management of customer relationships in all facets of the business. Over the next few chapters we will create such a conceptual, organizational, and operational framework. Chapter 7 CHAPTER 7 CHURN MANAGEMENT WISDOM With so many different ways to look at churn management, determining how to approach analysis and problem solving is a difficult one. We would be greatly aided if we understood the core issues and the basic assumptions that define the churn phenomenon. What we need is a way to separate the trivialities from the critical factors, the knowledge-based on experience from the unfounded opinions of non-experts. In this chapter, we review some of the more critical assumptions and conditions that experience has shown to be the most important. Given the wide variety of churn types your company may be facing and the economic implications of those churn events, some guidelines for developing an effective churn management strategy are in order. As we shall see, churn management in the telco environment is not an easy task. Telecommunication companies, like many other new generation startup businesses, have very little experience or "ground rules" to draw upon when addressing a relatively new problem like churn. To get a perspective on churn, therefore, we need to develop a few simple rules. eXcellence in Telecommunications The Telco Churn Handbook BASIC RULES OF CHURN There are a few fundamental concepts that are critical to anyone's understanding of the churn situation in telco today. These rules may seem apparent once you think about them. However, there is a big difference betwe