ion, make is assuming that they can assign a relative value to a customer based on that customer's revenue history. This is an erroneous assumption for a number of reasons. The first problem is that telecommunications products, costs, and prices change at such a rapid and volatile rate that revenue history itself provides a highly inconsistent picture of true future revenue potential. In a business where customer prices are dropping, a pure revenue history appraisal will yield a very poor estimation of future value. The second problem is that the true customer value is also related just as much to measuring the full cost to the organization. This eXcellence in Telecommunications The Telco Churn Handbook means that soft cost factors such as credit risk and customer service maintenance costs need to be included for an accurate appraisal. Lastly, telecommunications products and services change SO quickly that a good future customer might only be a mediocre one today. We must evaluate customers on their future value, not just their current value. There are many reasons that using past revenue alone, as a reliable predictor of future revenue, is not relevant. However, there is no reason to believe that future customer spending on products and services will in some way be related to past behavior. In fact, past customer revenue is still the strongest single factor and a critical component to the generation of customer valuation approximations. Therefore it is critical that accurate, customer-specific past revenue data be available and included in the CVF calculation process. Credit Risk and Company Interface Behavior Although being aware of the customer's revenue history is a good starting point for evaluating customer value, how valuable a customer is in terms of soft costs is also relevant. For example, a customer that generates very high revenue, but is constantly unable to pay bills on time is not nearly as valuable as a customer who generates less revenue, but pays bills on time every month. A major part of the pr