 a consumer, trying to compare the benefit in actual dollars would be quite complicated. Chapter 4 In another market, carriers create complex variable rate plans based on the time and duration of the call. We label this kind of advertising price obfuscation. It can be quite effective. This points us directly to our three types of price churn. 1. Rate Plan Churn - when a consumer prefers the rate plan offered by one competitor over another. 2. Per-Minute Cost Churn - when the consumer changes to get a better per-unit charge rate. 3. Activation Rate Churn - when the customer switches pro- viders because the competitor eliminates or discounts the activation fees (possible but very unlikely). QUALITY AND CHURN Although price is the number-one reason people churn, quality is the second most common reason. This is not a surprise either. The wireless industry is, after all, a service industry, and the quality of the service is what people are buying. Thus far in our discussion of churn and why consumers decide to change carriers the issues have been straightforward and objective. If consumers want new handsets, they go wherever they get the best deal on it. If they are sensitive to price issues, then they look for the carrier with the best price. When it comes to churn for quality, social/psychological, and convenience factors, however, the job of churn manager becomes much more difficult because these areas are no longer quite SO objective. For the consumer, decisions about quality, convenience, and social/psychological value are very personal and subjective and as such are extremely difficult to measure, assess, and act upon. Quality, Perception, and the Incumbent Advantage Churn for quality issues put the provider into a particularly difficult position. Market research has shown that the consumers' feelings eXcellence in Telecommunications The Telco Churn Handbook about the quality they are receiving and the actual quality provided can be quite different indeed. Government-sponsored research into the quality of compe