A Review on Machine Learning Methods for Customer Churn Prediction and Recommendations for Business Practitioners

Due to market deregulation and globalisation, competitive environments in various sectors continuously evolve, leading to increased customer churn. Effectively anticipating and mitigating customer churn is vital for businesses to retain their customer base and sustain business growth. This research scrutinizes 212 published articles from 2015 to 2023, delving into customer churn prediction using machine learning methods. Distinctive in its scope, this work covers key stages of churn prediction models comprehensively, contrary to published reviews, which focus on some aspects of churn prediction, such as model development, feature engineering and model evaluation using traditional machine learning-based evaluation metrics. The review emphasises the incorporation of features such as demographic, usage-related, and behavioural characteristics and features capturing customer social interaction and communications graphs and customer feedback while focusing on popular sectors such as telecommunication, finance, and online gaming when producing newer datasets or developing a predictive model. Findings suggest that research on the profitability aspect of churn prediction models is under-researched and advocates using profit-based evaluation metrics to support decision-making, improve customer retention, and increase profitability. Finally, this research concludes with recommendations that advocate the use of ensembles and deep learning techniques, and as well as the adoption of explainable methods to drive further advancements.