Customer Retention Strategies in the Fitness Industry

Walden University Walden University

ScholarWorks ScholarWorks

Walden Dissertations and Doctoral Studies

Collection

2020

Customer Retention Strategies in the Fitness Industry Customer Retention Strategies in the Fitness Industry

Rodney Macon

Walden University

Follow this and additional works at: https://scholarworks.waldenu.edu/dissertations

Part of the Business Commons

This Dissertation is brought to you for free and open access by the Walden Dissertations and Doctoral Studies

Collection at ScholarWorks. It has been accepted for inclusion in Walden Dissertations and Doctoral Studies by an

authorized administrator of ScholarWorks. For more information, please contact [email protected].

Walden University

College of Management and Technology

This is to certify that the doctoral study by

Rodney W. Macon

has been found to be complete and satisfactory in all respects,

and that any and all revisions required by

the review committee have been made.

Review Committee

Dr. Timothy Malone, Committee Chairperson, Doctor of Business Administration

Faculty

Dr. Judith Blando, Committee Member, Doctor of Business Administration Faculty

Dr. Carol-Anne Faint, University Reviewer, Doctor of Business Administration Faculty

Chief Academic Officer and Provost

Sue Subocz, Ph.D.

Walden University

2020

Abstract

Customer Retention Strategies in the Fitness Industry

Rodney W. Macon

MBA, Webster University, 2011

BS, Excelsior College, 2010

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

January 2020

Abstract

In the health and fitness club business, acquiring new customers can be problematic for

business leaders and may hinder sustainability. Grounded in customer retention

management theory, the purpose of this qualitative multiple case study was to explore

strategies health and fitness club managers used to improve customer retention. The

participants were 6 health and fitness club managers who succeeded in improving

customer retention while employed at 5 fitness clubs in Southeast Texas. Data were

collected using semistructured interviews, a review of company websites, and social

media pages. General and inductive analysis were used to analyze the data. One

overarching theme, service quality, and 2 subthemes, including customer satisfaction and

customer loyalty, arose from the analysis. The implications for positive social change

include the potential for business leaders to create sustainable employment. Further

implications include providing better health outcomes for customers, reducing costs for

customers, and improving the quality of life within the community by using local service

providers and generating revenue for the local economy.

Customer Retention Strategies in the Fitness Industry

Rodney W. Macon

MBA, Webster University, 2011

BS, Excelsior College, 2010

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

January 2020

Dedication

This dissertation is dedicated to those in my life who supported me during my

pursuit of this degree. Additionally, I dedicate this dissertation to those who may benefit

from the results of this research.

Acknowledgments

A special thank you to my family for their encouragement and unwavering

support during my pursuit of the DBA degree. I offer a special thank you to Dr. Timothy

Malone and my committee members for taking the time to review this study and provide

critical and meticulous assessments. Dr. Malone and the committee members challenged

me, tested me, and gave me the tools I needed to improve this study. Thank you for your

insight, wisdom, intelligence, and determination to keep me on track. Your feedback was,

is, and will always be invaluable.

 
i 
Table of Contents 
List of Figures .................................................................................................................... iv 
Section 1: Foundation of the Study ......................................................................................1 
Background of the Problem .....................................................................................2 
Problem Statement ...................................................................................................3 
Purpose Statement ....................................................................................................3 
Nature of the Study ..................................................................................................4 
Research Question ...................................................................................................5 
Interview Questions .................................................................................................5 
Conceptual Framework ............................................................................................6 
Operational Definitions ............................................................................................7 
Assumptions, Limitations, and Delimitations ..........................................................9 
Assumptions ................................................................................................ 9 
Limitations .................................................................................................. 9 
Delimitations ............................................................................................. 10 
Significance of the Study .......................................................................................10 
Contribution to Business Practice ............................................................. 10 
Implications for Social Change ................................................................. 11 
A Review of the Professional and Academic Literature ........................................11 
Organization of the Literature Review ..................................................... 13 
Conceptual Framework ............................................................................. 14 
Customer Retention .................................................................................. 16 

 
ii 
Customer Loyalty...................................................................................... 23 
Service Quality.......................................................................................... 29 
Customer Satisfaction ............................................................................... 38 
Transition ...............................................................................................................45 
Section 2: The Project ........................................................................................................47 
Purpose Statement ..................................................................................................47 
Role of the Researcher ...........................................................................................48 
Participants .............................................................................................................49 
Research Method and Design ................................................................................51 
Research Method ...................................................................................... 51 
Research Design........................................................................................ 52 
Population and Sampling .......................................................................................54 
Ethical Research.....................................................................................................55 
Data Collection Instruments ..................................................................................56 
Data Collection Technique ....................................................................................58 
Data Organization Technique ................................................................................59 
Data Analysis .........................................................................................................59 
Reliability and Validity ..........................................................................................61 
Reliability .................................................................................................. 61 
Validity ..................................................................................................... 63 
Transition and Summary ........................................................................................66 
Section 3: Application to Professional Practice and Implications for Change ..................67 

 
iii 
Introduction ............................................................................................................67 
Presentation of the Findings...................................................................................67 
Overarching Theme: The Importance of Service Quality in Improving 
Customer Retention ...................................................................................68 
Subtheme 1: Customer Satisfaction .......................................................... 71 
Subtheme 2: Customer Loyalty ................................................................ 72 
Applications to Professional Practice ....................................................................74 
Implications for Social Change ..............................................................................75 
Recommendations for Action ................................................................................76 
Recommendations for Further Research ................................................................78 
Reflections .............................................................................................................79 
Conclusion .............................................................................................................80 
References ..........................................................................................................................82 
Appendix A: Letter of Cooperation from Research Partner ............................................107 
Appendix B: Interview Questions ....................................................................................108 
Appendix C: Greeting Script ...........................................................................................110 
 

List of Figures

Figure 1. Customer Retention ............................................................................................69

Section 1: Foundation of the Study

A global transformation and a massive expansion in the fitness industry began in

the 1970s and continues today (Andreasson & Johansson, 2016). This expansion

coincides with a public that increasingly values health and physical appearance (Markula,

2017). The fitness industry is an organization that focuses on the general state of

customers’ bodies, is one of the fastest-growing industries in the U.S. labor market

(Andreasson & Johansson, 2016). This growth relies on the continued patronage of

existing customers (Hurley, 2004), yet managers of health and fitness clubs frequently

overlook existing customers during the recruitment process. Hurley (2004) claimed that

management, customer retention, and customer service should form the framework for

productivity within the fitness industry. Other authors argued that factors such as

customer relations at the club, customer commitment, and frequency of weekly

attendance affect a customer’s likelihood of renewing his or her membership (Ferrand,

Robinson, & Valette-Florence, 2010).

In this study, I explored the customer retention strategies used by managers of

health and fitness clubs with the intent to identify strong predictors of customer retention

in health club settings. Study participants were managers in health and fitness clubs who

played significant roles in customer retention. The results of this study could benefit both

customers and managers of health and fitness clubs by outlining the most effective

strategies to improve customer retention. Improved customer retention could lead to

increased revenue for the business while also improving the health of the customer.

Background of the Problem

Physical fitness is one of the pillars of good health and can contribute to increased

longevity and other measures of human well-being (Seals, Justice, & LaRocca, 2016).

For those who want to achieve physical fitness, and for those who wish to profit from that

desire, it is essential to understand people’s motivation to be physically active (Pickett &

Cunningham, 2017). From a health and well-being perspective, being physically active

has a multitude of health and psychological benefits, including decreased risk of Type II

diabetes, heart disease, and certain forms of cancer, enhanced cognitive functioning; and

improved quality of life (Riebe et al., 2015).

The continued financial success of the fitness industry depends on the ability of

managers to improve customer retention (Hurley, 2004). García Fernández et al. (2018)

argued that to increase customer retention, health and fitness club managers need to

consider diverse customer retention strategies. The health and fitness club industry relies

on reoccurring revenue from current customers. The focus must remain on retaining

them. Having what motivates customer participation in health and fitness club is of the

utmost importance to managers (Schroeder, Welk, Franke, & Lee, 2017).

Therefore, a current major challenge for health and fitness club managers is to

understand how to retain customers more effectively. Managers must keep customers

satisfied by providing quality services, thereby creating loyalty and retaining the

customers (Ferrand et al., 2010). The objective of my study is to determine how health

and fitness club managers successfully use quality services and other generators of

loyalty to improve customer retention.

Problem Statement

Whereas managers of health and fitness clubs often focus on acquiring new

customers, it is less clear how managers should best retain their customers (Fader &

Toms, 2018). In a survey by Market Force Information, 24% of health club members

expressed dissatisfaction with their gyms, and 25% of participants said they would not

recommend their gyms to others (Dominic, 2017). The general business problem is that

some health and fitness club managers should develop strategies to improve customer

retention. The specific business problem is that some health and fitness club managers

lack strategies to improve customer retention.

Purpose Statement

The purpose of this qualitative multiple case study was to find the strategies that

health and fitness club managers use to improve customer retention. The participants

were six managers from five health and fitness clubs in Southeast Texas who have had

success improved customer retention. The implications for positive social change include

the potential to increase employment opportunities and to provide better health outcomes

for customers of health and fitness clubs. The information health and fitness club

managers provide may contribute to social change and improve customer retention for

health and fitness clubs. The recommendations of this doctoral study may include new

strategies to improve customer retention. The likely implications for positive social

change also include an increase in sustainable business practices.

Nature of the Study

Researchers can use either qualitative, quantitative, mixed methods to approach

research questions (McCusker & Gunaydin, 2015). Watson (2015) defined qualitative

research as a means of studying or observing individual and group issues that are hard to

measure numerically. Qualitative research is appropriate for exploring issues in depth

(Yin, 2018). Qualitative research is appropriate for exploring and understanding how

individuals experience a phenomenon (Palinkas et al., 2015). The quantitative method is

not appropriate for this study because I could not use this method to explore participants’

feelings, experiences, observations, and relevant documentation.

In contrast, Researchers using quantitative methods rely on numerical data for

insights (Maxwell, 2016). The goal of this study was to determine how health and fitness

club managers improve customer retention. The mixed methods approach combines

elements of both qualitative and quantitative research methods (Yin, 2018). The mixed

methods were not appropriate for this study because I could use the quantitative element

to explore participants’ feelings, experiences, observations, and relevant documentation.

I used a multiple case study approach. The case study design can assist with

uncovering insights and exploring the phenomenon to promote deeper understanding

(Marshall & Rossman, 2016). The ethnographic design is a qualitative research approach

to explore culture in a real-life setting (Fusch, Fusch, & Ness, 2017). The ethnographic

design was not appropriate for this study because my intention was not to study a cultural

group. Levy (2015) surmised that researchers use the phenomenological design to

describe a phenomenon through the perceptions and lived experiences of the subjects.

Therefore, the phenomenological design was not appropriate for this study because

exploring participants’ experiences and perceptions were not my intent. A case study

design is suitable for studying complex systems (Stake, 1995).

Research Question

The central research question of this study was What strategies do some health

and fitness club managers use to improve customer retention?

Interview Questions

1. Regarding retaining customers, what are some best practices for your health and

fitness company?

2. What are some of the barriers to improving customer retention for your health and

fitness company?

3. What are some of the causes of customer attrition?

4. What types of loyalty programs have been successful in improving customer

retention for your health and fitness company?

5. How might you identify customers who are most likely to discontinue their

memberships?

6. What sort of customer engagement strategies has led to improved customer

retention for your health and fitness company?

7. What causes customers to switch to a competitor of your health and fitness

company?

8. What switching costs do your customers experience when moving to a

competitor?

9. What loyalty programs have you implemented that support the retention of

customers?

10. What additional information can you provide relating to strategies your health and

fitness company uses to improve customer retention?

11. How has social media affected your ability to retain customers in your health and

fitness club?

12. How have you leveraged technology within your health and fitness club to retain

your customers?

Conceptual Framework

The conceptual framework for this doctoral study was the customer retention

management theory of Ahmad and Buttle (2002). The premise of this theory is that

organizations retain customers by providing superior service and satisfaction (Ahmad &

Buttle, 2002). Therefore, managers should consider all phases of service, industrial, and

general marketing to satisfy the customer. Ahmad and Buttle stated that from a service

market perspective, the way to retain customers is to improve perceived service quality

and satisfaction. The conceptual framework also incorporates a review of the concepts

associated with strategies for marketing professionals in the fitness industry use to

improve customer retention. The conceptual framework is a guide to align strategic

theories with the idea of improving customer retention and its effects on health and

fitness clubs.

I obtained data for this doctoral study by conducting interviews and sourcing

peer-reviewed articles that focus on customer retention strategies and customer loyalty.

The findings from this study may provide health and fitness club managers with new

strategies to increase their customer retention rates. The incorporation of customer

retention management theory into the conceptual framework may assist in the

identification and exploration of the strategies necessary to improve customer retention.

Operational Definitions

The following definitions may help the reader to understand the meanings and

applications of the terms.

Assurance: Assurance is a measure of a combination of items that assess

competence, courtesy, credibility, and security (Jagadeesan & Chinnadurai, 2015).

Assurance also involves the ability of the organization’s employees to inspire trust and

confidence in the organization through their knowledge and courtesy. In the context of

fitness clubs, this dimension has elements of physical beauty and a service delivery

approach or customer relationship management (Jagadeesan & Chinnadurai, 2015).

Customer loyalty: Customer loyalty is the customer’s intent to do repeat business

with a company (Kandampully, Zhang, & Bilgihan, 2015).

Customer perceived value: Customer perceived value is a component assessment

of consumers’ perception of the exchange of time, money, or energy compared to the

item or services received (Hapsari, Clemes, & Dean, 2016). It is the anticipated benefit

from a consumer’s perspective of a product or service.

Customer relationship management: Customer relationship management is the

method of creating and maintaining profitable customer relationships by delivering

superior customer value and satisfaction to improve business relationships with

customers (Soltani & Navimipour, 2016).

Customer satisfaction: Customer satisfaction is customers’ perceptions of

perceived performance and expected performance (Ali & Raza, 2017).

Empathy: Empathy represents a combination of items, including assessing,

communicating with, and understanding the customer; hence, it leads to personalized

attention for the customer ((Jagadeesan & Chinnadurai, 2015). Empathy also relates to

the fitness club’s service delivery style and relationship with customers (Jagadeesan &

Chinnadurai, 2015). Empathy also affects perceived service quality, fitness trainers,

instructors, and fitness staff who interact with customers (Jagadeesan & Chinnadurai,

2015).

Reliability: Reliability is the ability to deliver the promised service dependably

and consistently ((Jagadeesan & Chinnadurai, 2015). Customers in health and fitness

clubs expect clubs to provide services in a safe and active environment (Jagadeesan &

Chinnadurai, 2015).

Responsiveness: Responsiveness stands for willingness to help customers and to

provide prompt services ((Jagadeesan & Chinnadurai, 2015). Responsiveness concerns

the fitness clubs’ delivery styles and relationships with customers. Fitness clubs are more

likely to lag in responsiveness, as their primary goal is to provide attractive physical

environments (Jagadeesan & Chinnadurai, 2015).

Servicescape: Servicescape, or the service setting, is the atmosphere and physical

environment in which service occurs (K. T. Kim, Bae, Kim, Lee, & Kim, 2016).

Tangibles: Tangibles are the physical facilities and the appearance of personnel

and equipment ((Jagadeesan & Chinnadurai, 2015). In the fitness industry, this dimension

is more likely to contribute to the highest variation in service quality, because fitness

clubs provide physical beauty in staff and facilities, and they give little attention to

customer relationship management (Jagadeesan & Chinnadurai, 2015).

Assumptions, Limitations, and Delimitations

Assumptions

An assumption is any acknowledged idea that a researcher believes is factual, but

cannot verify (Patton, Hong, Patel, & Kral, 2017). In this study, I assumed that the health

and fitness club managers in the target population would offer new information regarding

improving customer retention strategies. I also assumed that this information would

include reasons for failures in customer retention strategies that would provide the

information necessary to improve customer retention. As with all research that includes

interviews, I assumed that all participants would answer honestly.

Limitations

Limitations are weaknesses or potential weaknesses of the research that are

beyond the control of the researcher (Malterud, Siersma, & Guassora, 2016). The

qualitative exploratory multiple case study was limited to six managers at five Southeast

Texas-based health and fitness clubs. Limitations included the limited time to complete

the study and the small number of available participants. Because the participant pool is

small, the research findings may not be generalizable to other populations.

Delimitations

Franzon, Englander, Axtelius, and Klinge (2018) stated that delimitations are

restriction boundaries that affect the scope of a study. This study aimed to determine the

successful customer retention strategies used by some health and fitness club managers.

A delimitation is that I used a small sample of health and fitness club owners in

Southeastern Texas, so the participants may not present an accurate picture of current

strategies to improve customer retention.

Significance of the Study

The financial success of service industries may benefit from both customer

acquisition and customer retention. The financial success and growth of health and fitness

clubs rely on their ability to retain current customers (Hurley, 2004). Hurley (2004)

indicated that there is a direct correlation between customer retention and leadership

engagement. With this study, I aimed to characterize how managers of health and fitness

clubs have improved customer retention.

Contribution to Business Practice

This study may be of value to health and fitness clubs by offering ways to

improve customer retention and to avoid lost patronage. The findings may enable

managers to avoid the limitations and effects of customer attrition. Implementing

strategies based on the findings of this study might improve customer loyalty. My goal

was to explore how implementing more effective customer retention strategies may

reduce customer attrition. The findings may contribute to the business effectiveness of

health and fitness clubs through improved customer retention (Lins, Servaes, & Tamayo,

2017).

Implications for Social Change

Characterizing and communicating the best strategies to retain customers in a

health and fitness setting has wide-ranging implications for customers, businesses, and

the larger community. For example, Saghi and Lotfabadi (2016) argued that, among the

various approaches in the field of social change, some approaches focus on the impacts of

health education and health promotion on the larger society. These authors posited that if

managers of health and fitness clubs improved their customer retention strategies,

customers might be motivated to maintain and improve their health and fitness. Improved

services that lead to enhanced health outcomes for health and fitness clubs’ customers

create positive social change. Findings and recommendations from this study may

contribute to positive social change by enhancing customer health.

A Review of the Professional and Academic Literature

Because health and fitness clubs are service-oriented organizations that prioritize

the needs of customers, one of their main challenges is retaining customers (Moreira &

Silva, 2016). However, García-Fernández, Bernal-Garcia, Fernández-Gavira, and Vélez-

Colón (2014) reviewed and analyzed existing literature relating to the fitness industry and

found a mismatch between what fitness clubs should be doing and what they are doing to

retain customers. In this literature review, I have synthesized peer-reviewed articles on

the concepts of customer retention in the fitness industry. I assessed the different

perspectives surrounding the central research question: What strategies do health and

fitness club managers use to improve customer retention? Analyzing the literature

provided an insight into how researchers, scholars, and marketing practitioners view

customer retention and the associated processes.

I began the initial search for journal articles, doctoral studies, and books written

by business and marketing experts using the Walden University Library databases about

customer retention. A primary search from Business Source Complete, ABI/INFORM

Complete, Emerald Management Journals, SAGE Premier, and PsycINFO produced a

variety of articles encompassing marketing theories and their past and current practices.

Supplementary searches using multidisciplinary databases such as Academic Search

Complete, ProQuest Central, Science Direct, and Google Scholar added sources for an

informative and comprehensive review of current customer retention practices.

I used the following terms and keywords for my preliminary search: customer

engagement, customer knowledge management, customer relationship management,

relationship marketing, word of mouth, customer relations, customer satisfaction,

customer retention, customer services, customer loyalty, consumer behavior, consumer

research, quality of service, physical fitness centers, marketing, marketing strategy,

leadership, and management.

All the articles are from peer-reviewed journals. I have based the literature review

on scholarly works and professional books. The publication dates are within 5 years of

my study. The references comprise 158 peer-reviewed articles, books, and book chapters.

I have based this literature review on 75 sources, which are all peer-reviewed journal

articles, and 67 of these sources are from 2015 or later (85%). The total number of peer-

reviewed sources from 2015 and later is 138 (89%). A further 20 (11%) of the articles are

peer-reviewed, but they date from 2014 or before.

Organization of the Literature Review

With the comprehensive searches in these research databases, I discovered a

variety of sources for this study. Peer-reviewed articles on customer retention, customer

loyalty, traditional marketing strategies, customer engagement, and quality of service

came up in my search. My exploration of sources encompassed themes such as consumer

engagement, trust, customer satisfaction, brand loyalty, relationship and knowledge

management, and social media marketing. I organized these sources and themes into

subsections that featured essential themes relating to the research question and the

conceptual framework.

I organized the literature review into subsections on related topics. The literature

review features essential themes relating to the research question and the conceptual

framework. The specific focus area is customer retention in the fitness industry. Through

the literature, I have reviewed a litany of variables that affect customer retention

strategies. Garcia Fernandez et al. (2014) reviewed and analyzed existing literature

relating to the fitness industry, and they found a mismatch between what fitness clubs

should be doing and what they are doing to retain customers. My overall objective for

this literature review was to identify variables that impact customer retention in general

and in the fitness industry. The existing literature indicated that customer loyalty, service

quality, and customer satisfaction are significant factors in customer retention for health

and fitness clubs (Garcia-Fernandez et al., 2014). Therefore, I used these themes to

organize my discussion of customer retention.

Conceptual Framework

I used the customer retention management theory of Ahmad and Buttle (2002) to

form the conceptual framework for the qualitative multiple case study presented here.

This theory posits that the retention of customers hinges on perceived superior customer

service and by high levels of customer satisfaction achieved by managing the

expectations of customers (Ahmad & Buttle, 2002). However, the connection between

customer retention and a company’s increased revenue is questionable, indicating that

managers should not focus on customer retention to improve revenue (Ahmad & Buttle,

2002).

The concept of customer retention is fully recognized as an essential variable to

consider when developing a comprehensive business plan. Customer retention is essential

to managers in inundated markets or when the number of new customers is in a constant

decline (Ahmad & Buttle, 2002). Ascarza et al. (2018) acknowledged customer retention

as a crucial objective of relationship marketing, predominantly because retaining

customers costs less than acquiring new ones. Dawkins and Reichheld (1990) noted that

when companies retained customers, the net present value of customers increased,

resulting in increased revenue (Ahmad & Buttle, 2002). Therefore, customer retention is

of significant concern to any business in which repeat consumption is an option.

There are three main perspectives on customer retention: service marketing,

industrial marketing, and general management. From a marketing perspective, companies

retain customers by forging multilevel relationships involving financial, social, and

structural bonds, and researchers have examined this aspect of customer retention by

examining customer service quality and satisfaction (Ahmad & Buttle, 2002). For

example, Alshurideh (2016) posited that customer retention is the focus of all marketing

plans and actions that seek the retention of customers by establishing, maintaining, and

maximizing the mutual long-term benefits that strengthen and extend the relationship

between two parties. The foundation of the relationship between consumer and firm is the

result of engaging in a continuous process of exchange of mutual benefit. Essentially,

customer retention suggests a long-term relationship between customer and firm

(Alshurideh, 2016).

Alshurideh (2016) posited that customer retention is the focus of all marketing

plans and actions that seek the retention of customers by establishing, maintaining, and

maximizing the mutual long-term benefits that strengthen and extend the relationship

between two parties. The foundation of the relationship between consumer and firm is the

result of engaging in a continuous process of exchange of mutual benefit. Essentially,

customer retention suggests a long-term relationship between customer and firm

(Alshurideh, 2016).

Customer retention is a mutually beneficial exchange between the customers and

business. Chuang and Tai (2016) postulated that customer retention strategies aim to

maximize economic and noneconomic benefits and to encourage more exchange

processes in the future. Companies try to affect consumer behavior by providing

perceived customer value to increase customer loyalty. Effective customer retention

benefits health and fitness operations through increased revenue generation. Relationship

benefits are essential prerequisites for relationship establishment, exchange, and

relationship continuation (Alshurideh, 2016). Chuang and Tai (2016) posited that

retaining customers in competitive environments is critical for any company’s survival.

Customer Retention

The customer is the most critical person in any form of business, and without the

customer, the business would not exist. Satisfied customers are a company’s relationship

capital. Acquiring companies will pay for the plant, equipment, and brand name, but also

the current customer base (Mandal, 2016). However, acquiring new customers is costly

because of the need to invest time, energy, and resources in developing relationships

(Mandal, 2016). Companies need to understand their customers. In service industries, the

best way to retain customers is to improve customer perceived service quality, and

consequently, customer satisfaction. Both service quality and customer relationships

directly influence customer retention (Mandal, 2016).

Some service firms with high customer attrition rates find difficulty in growing

the company’s customer base. Some of these service firms include health and fitness

clubs, hotels, and commercial airlines. Sometimes despite extensive retention efforts,

customers still leave. Kumar, Bhagwat, and Zhang (2015) agreed that in some cases,

customer attrition might benefit the firm by attracting lost loyal customers back. Some

pertinent questions remain regarding whether lost customers are worth the investment of

attracting them back and whether they will remain profitable if they return. Fitness clubs

provide a unique form of service and may yield specific answers to these questions.

Health and fitness clubs and the nature of recreational physical fitness activities

have changed since the 1960s (Stern, 2008). Private fitness centers (health and fitness

clubs) were ubiquitous features of the American landscape, and centralized ownership

characterized the field from 1970 onward. Fitness centers also emerged as social centers

where business people went to see and meet other customers (Stern, 2008). The focus on

the body and formalized exercise developed for a segment of the population, a more

significant portion of the population grew increasingly obese, creating health concerns in

all age groups. Individuals from both these groups became customers at health clubs to

actualize their concepts of health, beauty, professional success, sexuality, emphasized

athleticism, and good muscle tone (Stern, 2008). During the 1980s, the health and fitness

club industry contributed to the physical insecurities of consumers by promoting a toned,

bulked, pumped, and chemically and surgically altered body (Stern, 2008). As health and

fitness clubs evolved in response, the strategies used by managers for serving and

retaining customers also changed.

Physical activity and exercise are necessary for maintaining good health. In health

and fitness clubs, customers predominantly exercise for health benefits (Middelkamp &

Steenbergen, 2015). Exercise is planned and structured, with repetitive body movements

to improve or maintain health (Lee, Jackson, & Richardson, 2017). According to the

International Health, Racquet, and Sportsclub Association (IHRSA; 2015), about 140

million people have a paid membership to a health and fitness club. This global figure

demonstrates the understood importance of physical activity among a segment of the

population.

With the recognition of the importance of physical fitness, fitness and health clubs

are a rapidly growing business sector. Gonçalves and Diniz (2015) posited that increased

awareness of the benefits of a healthy lifestyle and physical activity has led to an increase

in customers at health and fitness clubs. Researchers have found that people join health

and fitness clubs because of the perceived value of achieving their fitness and health

goals. Therefore, managers do not typically see a shortage of new memberships.

However, the growth of health and fitness clubs depends on the challenge of successful

customer retention (Gonçalves & Diniz, 2015). Customer perception of service quality is

significant for customer retention, so managers must provide an environment that

encourages customers to reach their health and fitness goals (Gonçalves & Diniz, 2015).

Health and fitness clubs have always had challenges in maintaining membership.

Sperandei, Vieira, and Reis (2016) concluded that only about 3.7% of customers continue

their gym activities for longer than 12 consecutive months, and 50% of customers

abandon patronage within 90 days of membership. Managers can reduce customer

attrition through enhanced customer engagement. For example, managers of health and

fitness clubs can provide personal trainers instead of letting members figure out the

process on their own. They can also provide goal sheets or memory cards to record

physical goals during workouts, and not just during the signup process. Customer

retention is an essential phenomenon in a saturated market or a low-growth market with

few new customers (Ahmad & Buttle, 2002).

Customer retention is a primary objective of relationship marketing (Ahmad &

Buttle, 2002). The primary reason is that retaining customers costs less than acquiring

new customers. Therefore, managers should direct more effort toward customer retention

than new customer attraction (Lemon & Verhoef, 2016). Premkumar and Rajan (2017)

noted that two factors affect poor retention rates: declining market growth and the

complexity of customer retention. Premkumar and Rajan (2017) posited that customer

retention has a positive effect on revenue.

Fitness clubs as service industries. As the demand for a healthier life increases,

the fitness industry, with more than 30,000 health and fitness clubs globally, continues to

grow (Avourdiadou & Theodorakis, 2014; Chao, 2015). There are approximately 183,900

fitness centers worldwide, with 144.7 million customers, bringing in approximately $84

billion in revenue annually (IHRSA, 2015). The U.S. private club industry generates

more than $21 billion in annual economic activity (Maier & Prusty, 2016).

As a service industry, health and fitness clubs are unique in that they primarily

rely on retaining customers for their financial stability, especially in a competitive market

(Avourdiadou & Theodorakis, 2014). Therefore, understanding and improving customer

loyalty would help to retain existing customers in these settings (Chao, 2015). When

health and fitness club managers do not understand or make the necessary efforts to

improve customer loyalty, the results often lead to not meeting customer expectations and

reduced customer retention. When this occurs, customers do not have a sense of loyalty

toward the health and fitness club (Chao, 2015).

Recent research as demonstrated that customer turnover is a concern in the health

and fitness industry (Adebiyi, Oyatoye, & Amole, 2017). Therefore, a turnover

management strategy for the health and fitness industry that includes improved customer

retention is an essential part of retaining customers. Some managers create lists of

potential customers who represent future turnover. As a result, the turnover prediction has

received much attention in the literature on marketing and management (Adebiyi et al.,

2017).

Characterizing health club customers. Most Americans do not engage in

adequate regular physical activity despite the well-documented health benefits (Hooker et

al., 2016). One indication of physical activity engagement is fitness club membership

(Hooker et al., 2016). Even when individuals attempt to become more active by joining a

fitness center, estimates suggest that nearly half discontinue their activity within the first

three months and cancel within the first six months (Sperandei et al., 2016).

Research that has examined which customers tend to terminate their health club

memberships has helped to develop a profile of which customers to target when making

attempts to improve customer retention. Fitness club managers must focus on retaining

the customers who are least likely to renew their membership (Gonçalves, Meireles, &

Carvalho, 2016). Researchers have found that customers with poor psychological

wellness (life issues) were more likely to terminate memberships within one year of

enrollment (Hooker et al., 2016). Also, Wicker, Coates, and Breuer (2016) suggested that

time spent on other activities (work, social life, errands) instead of time in the gym can

cause lower customer retention.

Customers join, maintain, and cancel fitness memberships for multiple reasons;

some of the reasons for joining included being a role model for children, improving

health, and the brand of the company (MacIntosh & Law, 2015). Customers have

reported that they maintain their memberships because of health-related goals, service

quality, environmental culture, and values. Some primary reasons for cancellation were

cost, lack of time, interest in other physical activity classes like yoga, outdoor exercise,

and most prominently, changes to family dynamics (MacIntosh & Law, 2015).

Retaining health club customers. A fundamental question facing marketing

managers in service organizations such as health clubs is how to allocate scarce

marketing resources to retain their best customers (Tarofder, Nikhashemi, Ferdous,

Selvantharan, & Haque, 2016). Many organizations devote considerable amounts of

money and human resources to develop systems aimed at improving customer retention.

Retention of the company’s most profitable customers is an excellent way to increase

revenue and is significantly less expensive than finding new customers (Tarofder et al.,

2016). Likewise, Chattha, Naqi, and Haroon (2016) posited that pursuing new customers

requires more resources than retaining the current ones. Successful club management

requires multiple leadership skill sets and managerial capabilities including but not

limited to (a) relational marketing efforts, (b) quality service delivery, (c) asset

management and customer enrollment, and (d) customer retention activities. One notable

factor is customer retention. Improving customer retention requires heightened

engagement and improved communication with customers (Maier & Prusty, 2016).

Customer retention is a significant driver of customer lifetime value (Becker,

Spann, & Schulze, 2015). Customer loyalty is equally vital to the success of an

organization. The creation of loyal customers seems critical for the survival of health and

fitness clubs. The customer’s relationship with a club, commitment, and frequency of

attendance have a positive effect on the intention to repurchase (Ferrand et al., 2010). For

customer retention, the environment that gym managers present is critical (Wicker et al.,

2016). During enrollment, many health and fitness club customers determine that they

will make the sacrifices necessary to benefit from club membership. Club managers must

motivate members to put in the time to use club facilities. Without members attending the

club, the likelihood of perceived customer value is low. Customer engagement is

essential to loyalty (Garon, Masse, & Michaud, 2015).

Even though health club managers are aware of the value of existing customers,

most are more interested in the next customer than in retaining existing customers. Rather

than continually seeking new customers, health and fitness club managers must place

more emphasis on retaining current customers. Hurley (2004) referred to the lack of

customer retention as a case of neglect. Developing positive relationships with current

customers can improve customer retention (Hurley, 2004). Attraction, social bonding,

and identity expression are emerging factors that might affect customer retention

(Brashear-Alejandro, Kang, & Groza, 2016). Further research is needed to identify the

best strategies to retain health club customers.

Efforts to keep customers engaged and physically inside the facility may serve to

retain customers in the long term. To maintain this relationship, managers of health and

fitness clubs should offer a variety of services with a duration of an hour or more to keep

the customer inside the fitness center. Keeping customers engaged in activities such as

classes, training assessments, and programs minimize any likelihood of abandonment

(Clavel San Emeterio et al., 2016). Consumers may possess a set of expectations and

evaluations before the purchase, but they cannot experience the emotions of delight or

disgust until they purchase (Kim, Vogt, & Knutson, 2015).

Health and fitness club managers must identify and understand their members’

behavior and use that behavior to design the services they provide. Understanding this

behavior, health and fitness club managers may need to expand standardized services

such as aerobic classes, personal training programs, and fitness consultancy. Catering to

needs should be the primary concern of managers (García Fernández et al., 2018).

Companies should cultivate their customers rather than acquiring new customers, as

acquiring the new customers will cost more (Kumar et al., 2015). However, most

companies pay little or no attention to the retention of customers (Kumar et al., 2015)

Customer Loyalty

In the marketplace, having loyal customers is critical for firms. Given the

changing role of customers, managers must embrace fresh concepts, including the

cocreation of value, customers’ emotional engagement, customer communities, and

customer participation through social media. Leaders must be innovative in reaching out

to customers during pre-purchase, purchase, and post-purchase stages to promote

customer loyalty (Kandampully et al., 2015). One of the main variables that influence

customer retention in health and fitness club settings is customer loyalty.

Customer-perceived value, corporate image, and switching costs are vital

elements of loyalty and are critical to the length of the customer relationship. When a

customer uses a service organization for a short period and decides not to renew the

membership because of a perceived lack of value, this negatively affects the corporate

image and customer loyalty. In a health club setting, when customers decide to extend

their memberships, this positively affects the corporate image and customer loyalty.

Retaining customers results in a positive corporate image of customer loyalty, and failure

to incorporate contingency relationships might lead to increased turnover costs (Ascarza

et al., 2018).

Factors affecting customer loyalty. Ascarza et al. (2018) stated that corporate

image is more relevant than perceived value or turnover costs when a new customer is

deciding whether to repurchase. The corporate image remains a determining factor in

repurchase decisions, yet customer value continues to play a crucial role in influencing

loyalty. The length of the relationship and the customer’s perceived value positively

influence the barrier to switching. Managers of service organizations must focus on the

attributes necessary to enhance customer-perceived value. The relative effect of

perceived value on customer loyalty is a significant part of the long-term relationship and

repurchase decisions by customers (Ascarza et al., 2018).

Customer loyalty, customer satisfaction, customer retention, and brand loyalty are

the four most significant issues facing marketing executives. Managers recognize the

benefits of loyal customers for consistent cash flow and increased revenues. Feedback by

word of mouth, surveys, and other behavior serve as indicators of future behaviors from

customers. Feedback by word of mouth provides practical insights into how the firm

allocates resources to improve customer loyalty (Kumar, 2018).

Creating loyal customers is one focal point in business. Brand loyalty, which is

essentially the habit of customers, is also an effective means of keeping customers. Brand

loyalty relies on perceived value so that consumers keep purchasing the same products or

services from a specific brand rather than choosing another brand or company. Brand

loyalty has made the fitness industry a global billion-dollar industry, and it is, therefore,

an essential factor (Krivic & Loh, 2016).

Customer loyalty in fitness clubs. Customer loyalty is invaluable to health and

fitness clubs for membership longevity (García Fernández, Gálvez Ruíz, Fernández

Gavira, & Vélez Colón, 2016). To maximize customer lifetime value, the managers of a

company must take steps to increase customer loyalty. Attracting new customers cannot

be the only focus. Loyalty programs and customer relationship management systems can

help managers to develop tools for increasing customer loyalty (Hamilton, Rust, & Dev,

2017). Within the health and fitness industry, managers have taken a variety of

approaches to develop and maintain customer loyalty.

Four factors contribute to customer loyalty to health and fitness clubs: switching

cost, customer value, physical environment, and customer satisfaction. Switching cost

refers to the costs of leaving and joining a competing health and fitness club (Suwono &

Shambling, 2016). Health and fitness clubs must offer perceived superior customer value

to create loyalty. Customer loyalty in health and fitness clubs is on the decline because of

the influence of customer perceived value, satisfaction, and service quality (Lim, Romsa,

& Armentrout, 2016). Customer perceived value, satisfaction, and service quality

significantly influence customers’ psychological commitment and behavioral intentions

concerning membership renewal and customer referrals.

The higher the customer’s perceived value, satisfaction, and service quality, the

higher the customer loyalty will be (Lim et al., 2016). Improving customer value,

satisfaction, and service quality generate improved customer loyalty. In an increasingly

competitive environment, membership attraction and retention of loyal customers is

essential, and this is a challenge to health and fitness clubs. High customer attrition

makes revenues uncertain and results in higher marketing costs to acquire new customers.

Behavioral measures and customer commitment may determine customer loyalty based

on membership renewal intentions and positive word of mouth (Lim et al., 2016).

Managers of health and fitness clubs inferred loyalty from renewal intentions, and

they have developed strategic advertising efforts to create a connection between the

customer and company (Gürhan-Canli, Hayran, & Sarial-Abi, 2016). Loyalty has become

vital in health and fitness clubs because of increased competition. One goal of health and

fitness clubs is to create loyal customers, thereby getting them to repurchase products or

services. The phenomenon of customer loyalty has received attention in the marketing

community, as companies see value in creating customer loyalty through enhanced

customer relationships (Tanford, Shoemaker, & Dinca, 2016).

Another strategy to create and maintain brand loyalty and customer satisfaction in

health and fitness clubs is to focus on improving the atmosphere. Health and fitness club

managers must enable the staff to answer customers’ questions and to solve problems in

an accurate and timely manner. When health and fitness clubs offer promotions, benefits,

and programs not only for their long-term customers, but also for those that have joined

recently, this improves customer loyalty (Krivic & Loh, 2016).

Building trust is also imperative to maintaining customer loyalty. For example,

instead of canceling scheduled group classes because an instructor is out, fitness clubs

should have another instructor ready to prevent customer dissatisfaction. Canceling

classes and scheduled events could erode customers’ trust, affecting their loyalty.

Developing an informed management team and staff to ensure that products and services

are at their highest level creates an environment of trust (Krivic & Loh, 2016).

In efforts to retain customers, managers of health and fitness clubs should also

focus on customer loyalty programs. A loyalty program is an integrated system of

marketing actions that aim to make customers more loyal. These programs are typically

membership-based marketing programs that develop relational attitudes and behaviors

among customers by providing a range of rewards such as redeemable points, cash, and

free goods in exchange for the customer’s business. The goal of these programs is to

enhance customer relationships. These enhanced relationships lead to increases in

customers’ loyalty, causing repeat purchases, convincing other potential customers

through word of mouth, discouraging existing customers from switching, and resulting in

increased sales, total revenue, and total profit (Tanford et al., 2016). Loyalty programs

must have two objectives: to be different from competitors in a way that is meaningful to

customers and to provide relevant rewards to the individual customer (Kumar & Reinartz,

2018).

Bijmolt, Krafft, Sese, and Viswanathan (2018) stated that loyalty programs endow

customers with a status they earn through purchases or other actions. These customers

can become advocates for the company because of these loyalty programs. Loyalty

programs help the business process by identifying, maintaining, and increasing the yield

from the best customers through an interactive relationship. Loyalty programs also help

to build and preserve stronger customer relationships. Loyal customers are a valuable

source of future revenue streams and a good source for market intelligence. Loyal

customers are willing to share insights into their needs and to enable the firm to tailor

products, pricing, distribution channels, and marketing communications (Bijmolt et al.,

2018).

Loyalty programs are becoming influential in customer retention (Tanford et al.,

2016). Gaining customer loyalty is an essential goal of marketing and loyalty programs.

Loyalty programs drive purchase behavior (Bijmolt & Verhoef, 2017).

The absence of customer loyalty programs in health and fitness settings could hurt

customer trust, commitment, and loyalty (Baloglu, Zhong, & Tanford, 2017). Fitness

clubs with loyalty programs are more likely to survive in a competitive market in which

retaining customers is a challenge. Loyalty programs could play a role by rewarding

current customers for their patronage. Such programs help to promote trust by rewarding

customers for their patronage (Silalahi, Alfansi, & Wiardi, 2017).

Also, customer loyalty programs and brand loyalty can contribute to customer

loyalty. Brands can produce feelings or emotions that determine customer experience.

Customers who have a positive experience toward a brand may believe the product or

service is reliable, trustworthy, and valuable, and that the brand may be willing to give

priority to the customer’s benefit. The customer’s perception of brand trust influences

customer loyalty, and this encourages customers to repurchase services in the future and

to build up more commitment (Silalahi et al., 2017).

Service Quality

Customer loyalty is driven in part by service quality, which in turn drives

customer retention in any service-oriented business. While satisfaction is significantly

better among experienced customers, service quality is novice customers (Avourdiadou

& Theodorakis, 2014). Service quality affects satisfaction across both novices and

experienced customers, and it is a vital component for retaining customers. Customers

have an expectation of service quality based on their membership types and the clubs

they attend, and they expect their fitness clubs to provide superior service quality

(Dhurup, 2017).

Therefore, customer experience should be at the forefront of the activities of

health and fitness club managers and staff. Managers and staff must continue to assess

customers regularly to gauge service quality (Gonçalves & Diniz, 2015). Researchers

consider service quality as the primary antecedent of customer satisfaction. The

relationship between service quality and customer satisfaction is positive, and it indicates

that higher service quality may increase customer satisfaction (Ramamoorthy,

Gunasekaran, Roy, Rai, & Senthilkumar, 2018).

Results of previous research demonstrate that service quality is a

multidimensional construct, consisting of both technical and functional quality (Ismail &

Yunan, 2016). Useful service quality should have five specific dimensions: tangibility

(physical facilities, equipment, and appearance of workers), reliability (ability to perform

the promised service dependably and accurately), responsiveness (willingness to help

customers and to provide prompt service), assurance (knowledge and courtesy of workers

and their abilities to inspire trust and confidence), and empathy (caring, individualized

attention the organization provides to customers; Herstein, Gilboa, Gamliel, Bergera, &

Ali, 2018; Ismail & Yunan, 2016). Service quality acts as a critical predictor of customer

satisfaction and customer loyalty. Ismail and Yunan (2016) confirmed that the capability

of service providers to implement the five dimensions of tangibility, reliability,

responsiveness, assurance, and empathy in performing daily jobs might lead to better

customer satisfaction and customer loyalty.

Differentiation of services. Service quality is often perceived as superior if the

services are distinct from those offered by competitors. For example, Ramamoorthy et al.

(2018) related service quality to the mix of marketing techniques used by service

industries. Firms manipulate product, place, price, and promotion to differentiate the

services of their organization from those of another (Dhurup, 2017). Customer service is

a succession of activities through which the club’s management and staff interact with

customers. Customers yearn for reliable, personalized service, and they expect a

conducive facility in exchange for their patronage. For clubs to maintain a competitive

advantage, service quality must be superior (Dhurup, 2017). This type of differentiation

may translate into customer retention.

The same differentiation of services is essential in the health and fitness sector.

Service quality has become of prime importance in the competitive environment of the

fitness industry (Polyakova & Mirza, 2016). Tsitskari, Tzetzis, and Konsoulas (2017)

concluded that customers in health and fitness clubs are demanding and have high

expectations, thereby challenging health and fitness clubs to meet these expectations.

Therefore, understanding the relationship between service quality, customer satisfaction,

loyalty, and behavioral intentions is invaluable to fitness clubs seeking ways to retain

existing customers (Polyakova & Mirza, 2016).

Effects of service quality on customer loyalty. Previous research has

demonstrated a direct link between service quality and customer loyalty (Avourdiadou

&Theodorakis, 2014) Furthermore, customer satisfaction is a significant driver of the

future behavior of customers (Avourdiadou &Theodorakis, 2014). Potential customer

perception of an organization’s corporate social responsibility activities, service quality,

and transparency effect relationship quality constructs such as trust, satisfaction, and

customer loyalty. Corporate social responsibility and company reputation also have

positive relationships with customer satisfaction and trust. Customer trust continues to

have a significant positive influence on customer loyalty (Kim & Kim, 2016). The most

substantial challenge for a business is customer retention and service quality (Premkumar

& Rajan, 2017).

The health and fitness club industry is a dramatically changing market, and

service quality is key to attaining a competitive advantage. Service quality continues to

gain popularity to improve customer retention. The effects of service quality on customer

satisfaction and attitudinal or behavioral intention are crucial to create and maintain a

competitive advantage (Argan, Argan, Kose, & Soner, 2015). There are links between

service quality, customer satisfaction, and loyalty, and they have a positive influence on

shaping satisfaction and repurchase intention. Customers’ perceptions of service quality

influence their satisfaction and intention. The service quality dimensions for fitness clubs

such as personnel, tangibles, equipment, facility design, empathy, responsiveness,

accessibility, ambient conditions, and assurance are essential as fitness quality indicators

(Argan et al., 2015).

Factors affecting perceptions of service quality. Researchers have examined

factors that influence how customers perceive service quality, including labeling,

customer expectations, fitness quality, and customer satisfaction. The design and

production of labels can improve service quality. Private labels can help to differentiate

the service organization from the competition, and it enhances the perceived personality

or status of customers who purchase these services. Health and fitness clubs may see

improvements in service quality if they invest more in developing private labels and

making brands an integral part of their service. The ability to leverage service

organizations’ quality and customer satisfaction by marketing private labels is essential in

a very competitive service industry (Herstein et al., 2018). Therefore, the production of

private labels that communicate a quality product may positively influence customer

retention.

Customer perceptions of service quality can lead to an improved competitive

advantage, but perceptions of service quality can differ, as customer expectations may not

match reality. Customers compare perceived service quality with their expectations about

the service, and they act accordingly (Tan, Chew, & Hamid, 2016). Service quality is

essential in a competitive market. A business that caters to customers’ needs will gain the

loyalty of customers, and this may result in repeat business (Tan, Chew, & Hamid, 2016).

Allan (2016) contended that service quality, coupled with customer loyalty, has a

positive effect on customer retention. Customers’ perceived service quality is a precursor

to customer retention, and it enhances patronage in the market, which affects the market

performance of the organization. Customer service and service delivery are essential, as

they form the basis for ongoing service. Service quality is the result of attending to the

needs, demands, and expectations of customers through service delivery or customer care

(Allan, 2016).

In addition to labeling and customer expectations, fitness quality can also

influence how customers perceive service quality. High satisfaction levels might lead to a

substantial commitment for products such as spinning, yoga, and Zumba in fitness

centers. Customers who frequently participate in fitness services have an increased

likelihood of loyalty to the brand of the fitness center. However, customers who rarely

use fitness centers are less likely to be loyal customers. Fitness centers can measure the

success of their current services or launch new services for critical success. Health and

fitness club managers must be aware of several dimensions of fitness-related service

quality and how they relate to their facilities. Club customers also have perspectives on

fitness quality, and if they are satisfied, they may serve as potential pioneers for the

organizational leadership or innovation (Argan et al., 2015).

Customer satisfaction is a direct link to service quality. Because service quality

mainly depends on tangible dimensions of service, managers need to deliver a high level

of service to their customers by enhancing tangible dimensions and by improving the

knowledge, skills, and behavior of their staff. These characteristics are significant to

fitness club managers because the ability of their staff to inspire confidence and trust in

customers and researchers is a vital dimension of service quality. Superior service quality

has a positive influence on customer satisfaction, and it can lead to customer retention,

which may improve business performance (Allan, 2016).

Effects of fitness center attributes on perceptions of service quality. Lagrosen

and Lagrosen (2007) examined the quality management practices in the fitness industry

by exploring service quality and analyzing three dimensions: physical change, including

beauty and function; mental change, including harmony and self-realization; and

pleasure, taking the form of social pleasure or physical pleasure. These three dimensions

are the main selling points of the fitness industry. The industry offers a physical change

using fitness club facilities, products, and programs while creating a mental change due

to the positive results of physical change, which leads to pleasure. These three

dimensions or attributes are the core of what the fitness industry offers customers

(Lagrosen & Lagrosen, 2007).

Physical change is part of the fundamental role of health and fitness clubs. Many

customers use fitness centers to improve their mental status through a myriad of

programs. Along with the physical changes, health and fitness clubs offer programs such

as yoga and Pilates, which have multiple positive psychological effects such as harmony,

happiness, calmness, mental relaxation, self-realization, and enlightenment. Finally,

health and fitness clubs may offer pleasure from social interaction with other customers

and staff, as well as the physical enjoyment of the various fitness activities (Lagrosen &

Lagrosen, 2015).

Most people live a sedentary lifestyle, and health and fitness clubs have become

even more significant from a global health perspective (Lagrosen & Lagrosen, 2015).

Service quality in health and fitness clubs has proved profitable, and it is a place of social

and physical pleasure for customers (Lagrosen & Lagrosen, 2015). Health and fitness

clubs are quickly becoming preferred social places, and the practice of promoting fitness

brings countless benefits. In an increasingly competitive environment, customers are

more demanding, expect improved service quality, and are less tolerant of reduced

services. Customer complaints about service quality are one cause of customer attrition

(Moreira & Silva, 2016).

Customer service. Health club managers can predict customer retention by

measuring customer satisfaction, loyalty, or commitment (Moreira & Silva, 2016).

Fitness club owners can use complaint behavior to measure customer dissatisfaction or

customer attrition, but there is limited study in the area. Some customers do not complain

to management or staff; instead, they complain to other customers. Customers sometimes

complain by word of mouth, by third-party responses, and through complaints expressed

via external parties directly involved with the fitness center who has some influence on

current and potential customers. Customers also complain through private actions,

including canceling membership, warning friends through social media and other outlets,

or ceasing to patronize clubs (Moreira & Silva, 2016).

Customer service is a vital element in making the customer-to-business

relationship work. Company leaders who make quality customer service a priority have

emerged as strategic game changers for retaining profitable corporate customers. Service

quality is an essential factor in developing a sustainable structure for health and fitness

clubs. Customers tend to go to health and fitness clubs both for fitness, as part of a

healthy lifestyle, and for social needs. Customers must perceive the health benefits

through the service health and fitness clubs provide (Yildiz, Polat, Sonmezoglu, &

Cokpartal, 2016).

The relationship between the quality of interaction and output affects the way

customers perceive service quality. The daily interaction with managers and staff can

affect the perceived service quality and the customers’ willingness to continue their

membership. Health and fitness club managers and staff need to establish and maintain

positive relationships with their customers and to focus on customer expectations,

attitudes, and behavior changes (Yildiz et al., 2016).

Customer experience. The experience customers have at the club has a

significant influence on their perceptions of service quality. Customers who were

customers of other clubs may have higher expectations than others. The customers’

expectations may also be higher because of the equipment and physical appearance of the

facility. These higher expectations may affect customers’ perceptions of service quality.

Managers must focus on meeting or exceeding their customers’ desires for service

quality. Health and fitness club managers can meet or exceed their customers’

perceptions of service quality by establishing and maintaining innovative marketing

principles, and this can be very effective for customer retention and competitive

advantage (Yildiz et al., 2016).

Customers measure service quality in health and fitness clubs by how they view

the physical environment and their interactions with staff, and how these two enhance

their living environment. Customer perception of the physical environment is a

significant element of service quality. The ambiance, which includes lighting, music,

decors, color, and even fragrance, can affect the way customers perceive value. Also,

customers’ interactions with fitness staff have a profound effect on their perceptions of

service quality. Therefore, managers must be aware of the challenges of using

automation. The best results come through the customer fitness staff or person-to-person

interactions in the service delivery process. The purchase intention comes from

consumers’ perception of the benefits they receive from the service encounter. Fitness

clubs must provide amenities to enhance the environment and facilities to enhance the

experience of the customers (Cheung & Woo, 2016).

Servicescape. Service quality viewed through the lenses of servicescape adds a

unique perspective to the importance of service quality in customer retention.

Servicescape, or the service setting, is the atmosphere and physical environment in which

service occurs. A better understanding of the servicescape in health and fitness clubs

allows sport facility managers to increase the level of service they deliver to customers.

Servicescape focuses on the physical facilities where managers perform and deliver

service and where the customer consumes the service. There are multiple factors in the

servicescape theory for fitness centers: (a) accessibility/convenience, (b) facility layout,

and (h) social factors. These factors are essential for designing, planning, and

constructing health and fitness clubs (Kim et al., 2016).

Servicescape is a core product of health and fitness clubs with facility-driven

services that provide environments for the activities that occur therein. To a large extent,

the servicescape of health and fitness clubs is equipment dependent. Machines with the

latest technology to exercise can increase motivation. Fitness clubs can provide

interactive workouts with feedback for measuring effectiveness.

Customer Satisfaction

Health and fitness clubs are service organizations and realizing this is essential to

make their customers delighted with the service, facilities, and advice they receive. The

demand for health and fitness services has increased because of a general recognition that

fitness and exercise may improve a person’s physical and mental health, leading to a

higher quality of life. Therefore, health and fitness clubs face an increased responsibility

to satisfy customers in an increasingly competitive fitness industry market (Zopiatis,

Theocharous, Constanti, & Tjiapouras, 2017).

Factors that determine customer satisfaction. The development of customer

satisfaction is an essential component of customer retention for all service industries that

include health and fitness clubs. Suwono and Shambling (2016) posited that in health and

fitness clubs, customer satisfaction hinges on the quality of the physical environment, the

quality of the services they provide, the frequency of improvements to the facilities and

employees, customer engagement, and customers’ perceptions of their own physique.

The physical environment a customer experience has a direct result on their intentions to

repurchase (Zopiatis et al., 2017).

Previous research has demonstrated that a beautiful physical environment is

imperative for the development of customer satisfaction (Suwono & Shambling, 2016). It

is an essential factor to help health and fitness clubs to maintain their customer base. In

addition to the physical environment, health and fitness clubs need to use knowledgeable,

well-trained, customer-oriented front-line employees to offer high quality and a wide

variety of services. An appealing service environment helps to maintain and promote

customer satisfaction (Zopiatis et al., 2017).

Customer satisfaction can result in continuous improvements in meeting and

exceeding customer expectations. Customer satisfaction is an essential differentiator, and

it has become an integral part of a business strategy. Also, customer satisfaction helps to

build loyal customers, in turn, may spread the word to others, influencing others to

become customers. Positive word of mouth is highly credible, effective, and in most

cases, free. Customer satisfaction is the best indicator of the likelihood of a customer

repurchasing. However, satisfaction with a product or a service may not guarantee that a

consumer will persist with the product or the service (Tripathi, 2014).

The concept of customer engagement as a predictor of customer satisfaction is

rapidly growing in academic marketing literature. However, there is little knowledge

regarding the relationship between customer engagement and customer value. Customer

engagement enhances an organization’s performance and affects consumer behavior, as

well as brand referrals (Kumar & Pansari, 2016). Tripathi (2014) confirmed that

companies with high engagement levels yielded a return on investment of 8% above the

industry average, while companies with low engagement levels saw their profits drop

23% below the industry average. Companies that engage their customers perform better.

Customer engagement involves specific interactive experiences between consumers and

the brand. Customer satisfaction and customer engagement are both critical to retain

customers, but an engaged customer is not necessarily a satisfied one.

Customers’ perceptions of the success or failure of their membership depend on

the practices of the fitness centers, such as Gold’s Gym and World Gym. Customer

appearance and physique might play a critical role in contributing to attaining primary

benefits and satisfaction from health and fitness clubs. Customers may make social

comparisons with others, such as staff instructors or personal trainers, who may have

physiques that are closer to the idealized and socially constructed standard of beauty.

These perceptions may influence customer satisfaction and loyalty to fitness centers. The

provision of service quality at fitness centers might help customers to see the benefits of

their workouts (Smith, Murray, & Howat, 2014).

The perceived benefits of service quality, customer satisfaction, and customer

loyalty are relevant for health and fitness clubs and their sustainability. The quality of the

physical environment is not as influential as the perceptions of the customer. Both staff

interaction and perceived results are factors in customer satisfaction. In an ocular-centric

environment, health and fitness clubs play a paradoxical role in both: the site for the

improvement of physical capital and the site where one’s physical capital is on direct

comparative display with others (J. Smith et al., 2014).

The level of comfort customers has with their physiques can significantly and

negatively affect the relationship between staff service quality and the attainment of

results. Any physical discomfort from the customer may negatively mediate the

relationship between staff interaction quality and results. Consequently, managers should

consider some of the potential implications of body perceptions and how these

perceptions may influence how customers view their service (Smith et al., 2014).

Some health and fitness club staff, including fitness instructors and personal

trainers, often wear attire that emphasizes their physique. Health and fitness club

managers may consider a dress code that is still appropriate for the training context of the

role, but that may not emphasize the staff member’s physique quite as much. In contrast,

some customers might not be as confident in fitness instructors who do not have their

physiques on display (Hutson, 2016). A visible and fit physique is a confirmation of the

instructor’s ability to provide results. Fit trainers and staff provide additional motivation

to some customers to help them to achieve their goals. Some fitness centers have tried

reducing the number of mirrors at the front of the class area. However, modifying the

physical design through the reduction of mirrors could limit effective nonverbal

communication between the instructor and class customers, causing the instructor to fail

to recognize members’ needs, which may include an affirmation of their effort (Smith et

al., 2014).

Making multiple changes to address issues of customer comfort regarding

physique may inadvertently result in a negative influence on customer satisfaction.

Managers should focus on the fitness club staff and customer engagement by matching

based on gender, age, and fitness level. Customer engagement could help to encourage

customers who view their physiques more negatively to find their comfort zones. Finally,

training the staff to be aware of and empathetic toward customers’ perceptions of their

physiques and feelings about their bodies may enhance customers’ perceived service

experiences (Smith et al., 2014).

Measuring customer satisfaction. One problem regarding customer satisfaction

is paying too much attention to different approaches to attracting new customers and not

focusing on customer retention. Companies communicate with customers through social

marketing, providing members with higher levels of customer awareness and, in turn,

attracting more customers and maintaining them as loyal customers. Social marketing

uses the principles and techniques of commercial marketing to transmit beliefs, attitudes,

and behaviors in the community (Saghi & Lotfabadi, 2016).

Arefi, Tavakoli, and Heidari (2016) argued that managing customer satisfaction

measurement involves a full cycle of improvement and business excellence from the

customers’ perspective. The primary purpose is not measuring customer satisfaction but

improving the perceived health benefits for the customer. A common problem in health

and fitness clubs is that some consumers leave and then decide to return because of a

perception of better service. Service organizations that require customer membership

must monitor and evaluate consumer retention, satisfaction, and loyalty to facilitate

customer intentions. The concept of consumer services requiring paid membership spans

across industries, including health clubs, country clubs, sports organizations, retail

warehouses, museums, vacation rental organizations, and professional organizations.

Membership organizations consistently face the challenge of retaining customers, and

they struggle with consumer satisfaction. Perceived satisfaction differs between those

who continue their membership and those who let their membership lapse (Ashraf, Ilyas,

Imtiaz, & Ahmad, 2018).

Customer satisfaction in health and fitness clubs. Health and fitness clubs are

characteristically different from other service industries. At health and fitness clubs,

customers are typically in the facility and participate in the service delivery process.

Active customer participation is necessary, but it is not the only factor that contributes to

the success of the service outcomes. The participatory customer relationship is essential

to the service environment of health and fitness clubs because the relationship can lead to

increased revenue and the perception of belonging (Chiu, Shin, & Lee, 2017).

Health and fitness club managers must design the appropriate communication

channels with their customers to foster customer participation and involvement by

allowing customers to express their desires and needs as part of the organization. The

customer and club relationships start with the staff in the service environment engaging,

with highly involved customers, resulting in better employee performance and

organizational effectiveness. The customer’s positive perceived value and satisfaction

lead to a better service environment and a preference to renew his or her membership

(Chiu et al., 2017).

Customer satisfaction is uniquely approached in health and fitness clubs because

these businesses are providing a service that has multiple health benefits (Newton et al.,

2015). The transtheoretical model of behavior change helps health and fitness club

managers to understand and predict health-related behavior. Many people do not perform

enough physical exercise to appreciate the benefits of physical activity. One way to

increase or promote activities is to modify or build up health and fitness clubs but

modifying the environment alone may not encourage use (Newton et al., 2015). The

transtheoretical model of behavior change predicts that attendance behavior and exercise

behavior are indicators of retention or attrition. Knowing the reasons why customers

leave may help to improve customer retention (Carrera, Royer, Stehr, & Sydnor, 2018).

The use of the health and fitness club services has a direct effect on the health,

fitness, and wellness of the customer, creating shared value for both. Value co-creation

has a direct relationship with customer satisfaction. Customers must first understand their

personal health goals when signing up for membership. Customers are more likely to

continue if they understand these goals. Health and fitness club managers must help this

process by making sure their customers articulate the outcomes they want when they join

the club (Aggarwal & Basu, 2014).

Health and fitness club managers are instrumental in ensuring their cutomers

understand and meet their fitness goals. Health and fitness club managers should care

about the effort customers exert because it has a direct bearing on the customers’

satisfaction. Health and fitness clubs that track customers’ participation and provide

timely feedback on customer progress keep their customers engaged. An engaged

customer base can improve customer satisfaction. The quality of service encounters can

improve through educating and training the fitness staff and having regular assessment

and feedback, careful recruitment, and incentive structures in the fitness center

(Aggarwal & Basu, 2014).

Transition

The objective of Section 1 was to inform the reader about the effects of improving

customer retention in health and fitness clubs. Customer attrition has an adverse impact

on the fitness industry, communities, and the economy. The purpose of the qualitative

multiple case study is to explore business strategies to improve managerial engagement in

health and fitness clubs that may lead to improving customer retention, possibly resulting

in fitness benefits. The findings may be useful within the fitness industry to develop

strategies to improve customer retention and to create tools that managers can use in this

process. In addition to a discussion regarding the significance of the study, I noted

improvements in business practices and contributions to social change. A detailed

literature review reflects insights from scholars of the value of strategies necessary for

health and fitness club owners to succeed in the long term. Creating retention strategies

might reduce the costs of turnover and improve customer retention.

Section 2 includes the research method, clarifying the focus of the qualitative

multiple case study, and it discusses the research design, which may promote

understanding of how to improve customer retention. It also includes a review of the

research method, design, and discussion on how to research ethically. Information

surrounding the data-collection process, techniques instruments, and the analysis process

conclude in Section 2. Section 3 will provide a synopsis of the study and a presentation of

the collection of data and the findings. I will conclude Section 3 with recommendations

for future research.

Section 2: The Project

In this section, I provide information on the research method and design I have

chosen to address the problem statement. I describe the participants and the role of the

researcher. I justify the selected research method and design, and I provide information

about the population and the sampling. I also include a write up on ethical concerns, data

collection instruments, and the steps I plan to take to ensure reliability and validity. I

explore the following central research question: What strategies do some managers use to

improve customer retention? The interview questions focus on the following topics: What

strategies do managers use to improve customer retention? Describe some of the barriers

to improve customer retention? What programs have managers implemented to improve

customer retention?