Customer satisfaction at West Visalia Fitness, LLC: an evaluation study

Abstract

The service sector is an industry that has constant contact with its customers, and the customer experience is at the core of its being (Kim, Cha, Knutson & Beck, 2011). A poor customer experience leads to reduced customer satisfaction and retention (Bhattacharya, 1998). In addition, Ang and Buttle (2006) stated that as customer tenure lengthens, an increase in referrals occurs, relationship maintenance costs are reduced, and the organization obtains an overall competitive advantage. The positive and negative factors that affect customer satisfaction are not well understood, so obtaining a competitive advantage that fosters growth is difficult to attain (Bodet, 2009; Kim et al., 2011; Teik, 2015). ❧ The lack of known factors relating to customer satisfaction at West Visalia Fitness (WVF) is a problem because growth of an organization is dependent on customer satisfaction, and the exact role that fundamental service attributes play in it is not completely understood (Bodet, 2009; Wikstrom, 2008). This problem is important to address because research suggests increasing customer satisfaction directly relates to an increase in retention efforts and will foster positive organizational outcomes (Bodet, 2009). The current customer retention rate at WVF is 40%, with the goal being 80%. Therefore, there is a 40% gap between retention performance and the organizational goal. In addition, a historical look into research shows that a 5% increase in customer retention increases a company’s customer net present value by 25%-95% depending on service category (Dawkins & Reichheld, 1990).