 customer service is an investment in a capability that will be spread across the entire customer base. eXcellence in Telecommunications The Telco Churn Handbook For example, if we were to invest an average of $5 per month per customer in customer service, that would mean we would be spending $5 per month on the pre-emptive retention of all of our customers. This may sound positive on the surface, but let us consider the economics of this scenario. This kind of blanket investment really means that we would be spending $5 per month to try to retain a very good customer (say a customer that is worth $200 per month in revenue). At the same time, it also means that we would be spending the same amount to retain a very poor customer (say a customer that is worth only $20 per month in revenue). Does this make sense? It would make much more sense for us to determine the value of the different customer sets, and then arrange to apportion appropriately sized investments in these sets. This would allow us to invest in the retention of each group of customers in proportion to their value. So, instead of investing $5 per month to help prevent the churn of all customers, we would invest $20 per month in the retention of the very good customers, and we would invest next to nothing toward the retention of the less lucrative customers. It is interesting to note that this type of thinking seems to be very difficult for telecommunications executives and customer service groups to embrace. This should actually come as no surprise, however, since the entire history of the telecommunications industry has been one of equalitarianism. This is because telecommunications companies were for many years protected monopolies and, therefore, required by the government to make sure that all customers were treated equally. In today's highly competitive, non-regulated industry, this type of thinking can actually be detrimental to a firm's success. Several of the pre-emptive management techniques we have discussed are approaches that specifically