RetenNet: A Deployable Machine Learning Pipeline with Explainable AI and Prescriptive Optimization for Customer Churn Management

This study presents RetenNet, a comprehensive framework for managing customer churn in telecommunications, integrating predictive modelling, prescriptive optimization, and explainable artificial intelligence (XAI) incorporated with Large Language Models (LLMs). The process commences with the IBM Telco dataset, divided in an 80:20 ratio into training and testing sets. Categorical variables are converted by one-hot and label encoding, whilst class imbalance is mitigated using SMOTEENN. Min-max scaling and mutual information-based feature selection guarantee data appropriateness for machine learning models. Five classification algorithms, i.e., Random Forest (RF), Support Vector Machine (SVM), Extreme Gradient Boosting (XGB), Logistic Regression (LR), and Multi-Layer Perceptron (MLP) are assessed. The SVM model utilizing an RBF kernel exhibits optimal performance. In conjunction with nested cross-validation, Bayesian optimization guarantees excellent hyperparameter optimization and generalization. Performance is evaluated using the F1-score to highlight the implications of false negatives and false positives in churn situations. The methodology additionally incorporates fuzzy rule-based clustering, facilitating flexibility in customer segment identification for intervention priority. Prescriptive optimization uses linear integer programming to distribute retention budget according to model results and business constraints. SHAP waterfall plot employed to guarantee transparency and facilitate actionable insights. Furthermore, Gemini 1.5 Flash, a multimodal LLM, generates analysis and produces contextual recommendations derived from the SHAP waterfall plot. RetenNet offers a comprehensive and interpretable approach to the churn management pipeline, including classical machine learning, prescriptive optimization, and LLM-driven explainable artificial intelligence to enhance decision-making in customer retention efforts.