urrent and future value (V). Based on our appraisal of those three variables, we can then decide what kind of investment (I) we are willing to devote in the prevention of the churn. Building the Churn Management Equation So far, we have provided an explanation of how some of the pieces of this equation can be assembled. The development of a CRM system, complete with a history of customer activities, information about their membership in all the different segmentation schemes, and the presence of an organization that works with that information are critical first steps. The development and propagation of the CVF provides us with another key ingredient. Clearly, with this information we can determine how valuable a customer is to our firm and, therefore, how much investment we are willing to make in the retention of that customer. To this point, what we haven't addressed at all, however, are the issues of timing and risk. Chapter 14 The Customer Churn Index (CCI) Concept In an attempt to develop a user-friendly, shorthand method for the evaluation of customers and their propensity to churn, we have created a device that we call the customer churn index (CCI). The purpose for this index is simple and straightforward. Ideally, we would like to create an easy-to-use method that will allow us to take all of the different aspects of the customer's susceptibility to churn, and translate it into an easy-to-understand reference number (or set of numbers). To achieve this, this method will have to take into account all of the major dimensions of the churn susceptibility equation and provide us with the means to assign each of our customers a number (or set of numbers) that will create an index value for us that will tell us the likelihood of them to churn in any given situation. Differences between the CCI and Churn Prediction Models At this point, it is important that we differentiate between two very different concepts. What is the Customer Churn Index? On the one hand, we have the customer churn index. The CCI is a numbe