7 We are talking about creating a major shift in the way the entire organization looks at customers. The organization must shift from a headcount view to a customer-value view of decision-making. Everyone in the organization must understand that It costs money to retain customers b. The money spent on retention is most likely greater than the value that the customer can be expected to deliver to the firm. Many companies, when they first undertake to manage churn, try to do SO by spending the same amount of money to retain a very good customer as they spend to keep a very bad one. This is illogical. The more efficient solution is to spend more on the good customers and less on the bad. In fact, the optimum solution would be to determine the appropriate ratio between earnings potential and retention cost and to spend exactly that amount. Customers Churn For Complex Reasons Not only are customers of differing value, but they will all churn for different and complicated reasons. Customer surveys that report the top churn reasons (price, quality etc.) only provide a rough summary of those churn decisions. In reality, churn occurs when many factors, often dozens, work together. The fact that churn decisions are complicated means that no overly simplistic ad campaign or promotional offer will effectively address your churn in an efficient matter. Complex decision-making on the part of the consumers requires complex analysis on the part of the company wishing to address it. Companies Act On Segments, Customers React As Individuals By far, one of the biggest problems facing churn management executives is that of individuation. (We use the term individuation to describe the process of acting upon groups of people in a way that the individuals think they are being addressed as individuals.) Creating an environment of individuation is key to churn management success. eXcellence in Telecommunications The Telco Churn Handbook Individuation can be accomplished in many ways. For instance, when customers see an ad on television t