 churn index (CCI) is one of the most effective ways available for formalizing the process of responding to competitive offers and preventing churn. For the past few chapters we have been investigating some of the ways that a more consistent and well-coordinated customer relationship management approach, practiced by the telco in all facets of its operations, is a clear prerequisite to good churn management. But even if the CRM approach we are examining, the CRM systems, segmentation schemes, and customer value functions are in place, we are still no closer to figuring out exactly what to do about the specific problems associated with churn. In this chapter and the following chapter, we will return to a direct examination of the churn problem by investigating two of the most powerful tools available to the telco organization to help combat churn effectively. The problem is that to determine whether a customer will churn or not involves a large number of variables that need to be applied to a variety of situations. eXcellence in Telecommunications The Telco Churn Handbook MAKING ANALYSIS SIMPLER On the one hand, trying to keep track of all of the aspects of the customer churn equation would seem to be important, since each of them helps us better understand the customer. However, doing this seems to be a cumbersome and over-complicated task. You may recall that at the end of Chapter 7, "Churn Management Wisdom," we proposed that the whole problem of churn management could be reduced to a simple equation that includes the following key components: ( R ) Risk - Determining the likelihood of a customer to leave if nothing is done (T) Time - The time frame that applies to the risk (V) Value - The loss of revenue that the churn event will rep- resent (I) Investment - The investment of money to help reduce the The problem is, to determine for all customers, at a given point in time: how likely they are to churn (R), for how long of a time period we can expect that risk to be valid (T), and what we appraise to be their c