# CARRE: Counterfactual Action Retrieval and Reason Evaluation for Explainable Churn Prescription

arXiv: https://arxiv.org/abs/2609.09766 · HTML: https://mlsanity.com/paper/2609.09766/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Reasoning for agents, planning and code, one of 17 directions in LLM reasoning.
- Builds on 0 of its 27 references that are in the map.
- First posted on arXiv 9 Sep 2026.

## Placed in

- LLM reasoning / [Reasoning for agents, planning and code](https://mlsanity.com/lr/reasoning-for-agents-planning-and-code/)

## Abstract (arXiv)

Churn models typically identify high-risk customers but do not specify which feasible retention action should be considered or why that action is appropriate. We present CARRE (Counterfactual Action Retrieval and Reason Evaluation), a three-stage framework that combines retrieval-augmented candidate generation, cost-aware counterfactual scoring, and large language model (LLM) reasoning. CARRE retrieves a predefined catalog of retention actions, estimates model-predicted churn-risk changes under explicit feature transformations, and generates a structured churn reason and a profile-grounded explanation for the selected action. On the IBM Telco Customer Churn dataset, CARRE achieves 79.8% greater mean model-predicted risk reduction than the plain SHAP baseline and 80.4% greater reduction than the cost-controlled SHAP+Cost baseline across 313 high-risk test cases; its cost-normalized efficiency is 10.5% higher than that of plain SHAP. On a 136-case reason-stratified evaluation sample, diagnosis-driven prompt refinement increases weak-label agreement from 79.4% to 90.4%, with no auxiliary-plan constraint violations; because the same sample was used for error diagnosis and re-evaluation, the post-refinement result is not an independent estimate of generalization. For 135 explanations generated using the pre-refinement v2 reason outputs, two cross-vendor LLM judges assign mean scores ranging from 4.02 to 5.00 out of 5, although one judge saturates on actionability, and a deterministic audit finds no contradictions among 66 verifiable profile claims. Retrieval ablations show that k=5 provides the best evaluated compromise between high candidate coverage and downstream reasoning agreement in this dataset. These results illustrate how retrieval, model-based counterfactual scoring, and language generation can be separated and jointly evaluated in a prototype churn-prescription pipeline.