An Explainable Machine Learning Framework for Customer Churn Prediction and Retention in IT Service Organizations

Abstract

Customer churn represents a critical challenge for IT service organizations operating in competitive subscription-based markets, where customer acquisition costs significantly exceed retention investments. While machine learning has demonstrated substantial promise in identifying at-risk customers, the inherent opacity of many predictive models limits their practical utility for retention strategy development. This research presents a comprehensive explainable machine learning framework for customer churn prediction and retention in IT service organizations. The proposed framework integrates predictive modeling with eXplainable Artificial Intelligence (XAI) techniques specifically SHAP (SHapley Additive exPlanations) and LIME (Local Interpretable Model-agnostic Explanations) to deliver both accurate churn identification and interpretable insights into the drivers of customer attrition. Through analysis of benchmark churn datasets and case study validation in a B2B IT service context, the research demonstrates that combining machine learning with XAI enhances model transparency, provides actionable retention insights, and supports strategic decision-making. The findings indicate that explainable frameworks can achieve predictive accuracy exceeding 90% while enabling retention teams to develop targeted, evidence-based intervention strategies. The study contributes both theoretical understanding of XAI integration in customer analytics and practical guidance for implementing explainable churn prediction systems in IT service organizations.