er hand, if we can anticipate (low confidence) and predict (high confidence) that different people will be churning at different times based on different conditions, we suddenly have created a situation where efficient and effective strategies can be launched. TIMING ISSUES Timing is the other aspect of customer churn that is important for us to include in our solution development. As it turns out, timing is probably the most important component of the equation. A little analysis will help us to understand why. When To Take Action? To understand the critical nature of timing, let's consider the following situation. You have some very good customers that never complain and have very high monthly revenue. Your competitor is constantly bombarding the market with offers for free handsets, deeply discounted per-minute charges, and free gifts. What would you do? One reaction might be to say, "Hmm, our competitor is offering this great deal to my customers. I must offer them an even better deal to keep them from leaving." The other action might be to say, "My competitor is making these great offers, but maybe my customers don't care about those things. I am not going to do anything right now and hope that my customers stay loyal despite the temptation." Chapter 7 Two extreme solutions, but approaches that many companies take. Let's consider the consequences of each of these solutions. The Consequences Of Acting Too Soon Being proactive about churn management is certainly a good idea, but there is one huge downside to such an activity. What if you make adjustments to help keep the customer loyal (by reducing prices, offering gifts, or any of a number of approaches) and it wasn't necessary. After all, some customers will stay loyal no matter what you do, and some will leave no matter how hard you try. So the down side of proactive churn management is that you spend money, or give up revenue, that you didn't have to. Of course, as we said, you will have to reduce revenue or spend money on promotion eventually, but when is 