ISSN: 2320-5407 Int. J. Adv. Res. 7(3), 52-59 52 Journal Homepage: -www.journalijar.com Article DOI:10.21474/IJAR01/8598 DOI URL: http://dx.doi.org/10.21474/IJAR01/8598 RESEARCH ARTICLE A SIMPLE MODEL FOR ANALYZING THE CUSTOMER RETENTION COMPARING RURAL AND URBAN STORE. Manash Pratim Kashyap. Department of Business Administration, NERIM Group of Institutions. …………………………………………………………………………………………………….... Manuscript Info Abstract ……………………. ……………………………………………………………… Manuscript History Received: 02 January 2018 Final Accepted: 04 February 2019 Published: March 2019 Key words:- sBG Model, Beta distribution, Beta geometric, Beta binomial. Many businesses follow the repeat operation of a particular customer with a same store in different discrete time point. Customer retention comprises the probability of customer that alive in particular store in different purchase occasion. Different purchase occasion with a particular store occur at regular time intervals. The main goal of this paper is to predict future purchase patterns for rural and urban customer that can be described by the structural characteristics. The discrete time beta geometric model allows to heterogeneity of each of rural and urban customer behavioral process. The model is applied in 194 household from urban and 196 household from rural. Each household visited three times once in every three months. The study reveals that customer retention of rural customer is more than the urban customer. Copy Right, IJAR, 2019,. All rights reserved. …………………………………………………………………………………………………….... Introduction:- The increasing economic importance of staple goods in grocery store in rural and urban inspired many researchers. The term customer retention is the probability of a customer being “alive” or “repeat” buying from a firm (Gupta and Zeithams, 2006). Oliver (1997) define customer retention is deeply held commitment to re-buy or repatronize preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior. Every business needs to survive, so it undertakes every possible action to get them. According to Peter Drucker (1973), the main purpose of a business is to create a customer. Marketing has traditionally focused on market share and the customer acquisition rather than on retaining existing customers and on building long lasting relationships with them (Kotler, 2003). Gupta et al. (2004) found that a 1 percent increase in customer retention had almost five times more impact on firm value than a 1 percent change in discount rate or cost of capital. Kotler and Keller (2006) give a reason for popularity of customer retention is the recognition that losing a customer means in fact more than a single sale i.e. losing the entire stream of purchases that this particular customer would make over a lifetime of patronage ( Kotler and Keller, 2006). The significance of customer retention was first introduced by Reichhel and Sasser (1990). They found that profits in service industries and credit card companies increased in direct proportion to the length of customer retention. It is obvious that customer retention is more economical to keep existing customers than to acquire new one customer. Reichheld and Kenny (1990) observed that acquiring new customers is calculated as being five times more costly than the expenses of retaining existing customers. They observed that, long term customers buy more. The companies can clearly benefit from the life time spending of customers (Kotler, 2003 and Payne, 2006). Corresponding Author:-Manash Pratim Kashyap. Address:-Department of Business Administration, NERIM Group of Institutions.