 customers. In this case, the variable Z will be equal to 500,000. Assume further that currently 100,000 people have cell phones. X is equal to 100,000. This means that there are 400,000 more customers yet to be acquired in the market. The Churn pressure index in this case is Z/X or 500,000/100,000 or a value of 5. Later on, as the market matures, assume that the number of potential subscribers stays consistent at 500,000 but that aggressive marketing campaigns have led to the sign up of another 300,000 customers. This means that you now have a total subscriber base of 400,000 (the original 100,000 plus the additional 300,000). The churn pressure index is now equal to 500,000/400,000 or 5/4 (or 1.25). The more subscribers in the market, the closer the churn pressure index is to 1. Chapter 20 STEP 2 - RAW CHURN COUNTS At this point, you need to put together some estimates about the true nature and scope of the current churn situation. The first step in this process is to get accurate numbers of just how many customers are leaving under any condition. At a minimum, these reports should state the raw headcounts (number of customers that no longer have service) in both the voluntary and involuntary churn categories. Additionally, corresponding reports that reflect the amount of average monthly revenue that the loss of these customers represents can also be very illuminating. Headcount Metrics The easiest metric for your own churn can often be attained through headcount reports. Most telecommunications companies use headcount as one of their most basic key performance indicators. Unfortunately, looking at headcount numbers can be very misleading. For example, most headcount reports simply report on the firm's gross number of customers. They usually do not include acquisitions. This means that a company can be showing a constantly increasing headcount (since acquisitions continue all the time) but may also have an ever-increasing churn problem. This of course, can only happen when the acquisitions occur faster than the