University Dissertation: Customer Retention Impact in Fitness Industry

This dissertation investigates the impact of customer retention failure on trainer turnover within Singapore's fitness industry, exploring the unintended consequences. It examines factors affecting customer retention, employee turnover, and the relationship between them. The research employs positivism philosophy, a deductive approach, and a descriptive design, using survey research with gym members and managers. Data analysis includes gap analysis and t-tests using SPSS, revealing gaps in service quality expectations and perceptions. The study identifies strategies to improve customer retention and reduce trainer turnover, emphasizing the importance of communication, consistency, trust, and relationships. The findings suggest that failures in customer retention lead to increased trainer turnover, impacting profitability and business success. The dissertation also includes a literature review, methodology, data analysis, and a reflection section, offering valuable insights for the fitness industry and future research.

Running head: DISSERTATION
Impact of Failure in Customer Retention on Trainers’ Turnover in Singapore’s Fitness Industry
and the Unintended Consequences
Name of the Student:
Name of the University:
Author’s Note:

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Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study. I
am indebted to my supervisor ……………………. whose guidance, advice and patience have
been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local Education
Authorities, for the time and help given throughout. Without their participation, this research
would not have been possible. In this context, I am also thankful to them, whose research work
helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or completed!
Your encouragement and support have never faltered; thank you.

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Abstract
The aim of the research is to analyze the failure in customer retention on trainers’ turnover in
Singapore’s fitness industry that results in unintended consequences. Over the past decades, the
fitness industry has gained huge popularity, as the majority of the population has become health
conscious. A large portion of the fitness industry comprises of the exercise studios and gyms.
The demand has increased to 2.5 million in 2015 from a mere 1.8 million in 2010.
Positivism philosophy, deductive approach, descriptive design and survey research strategy has
been used. The researcher has selected 30 gym members and 5 managers from the fitness
industry of Singapore using random probability sampling technique. As the gym members and
the managers are the ones facing the issues in the fitness industry of Singapore to be retained,
surveying them has allowed the researcher to know the reason of increased employee turnover in
the industry and its impact on customer retention. Gap analysis and t-test analysis has been
conducted using SPSS for determining the difference between the expectation and perception of
the gym members and gym trainers for fitness industry in Singapore.
A gap score of -1.5333 indicates that the fitness organizations in Singapore to fulfill the
expectation of the gym members in terms of tangible dimensions and the t-test where the value
obtained is .000 that is less than .05. The largest gap in the Singapore fitness industry for the
gym member is for the tangible and assurance dimension that is -1.4000. However, the smallest
gap has been identified for responsiveness, that is -.6000. Regarding the t-test results, no
significant difference has been found between the perception and expectation for all the
dimensions of service quality, as the t-test values obtained are more than 0.05. Hence, the fitness

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industry of Singapore should aim towards mitigating the gap between expectation and perception
so that they can ensure effective and efficient service quality.

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Table of Contents
Chapter 1: Introduction....................................................................................................................7
1.0 Overview...........................................................................................................................7
1.1 Research aim..........................................................................................................................7
1.2 Research objectives...............................................................................................................7
1.3 Research questions.................................................................................................................8
1.4 Research hypotheses..............................................................................................................8
Chapter 2: Literature review............................................................................................................9
2.0 Overview................................................................................................................................9
2.1 Conceptual framework...........................................................................................................9
2.2 Fitness industry....................................................................................................................10
2.3 Concept of customer retention.............................................................................................10
2.4 Factors affecting customer retention...................................................................................11
2.5 Advantages of customer retention.......................................................................................12
2.6 Customer retention in fitness industry.................................................................................13
2.7 Customer retention strategies..............................................................................................14
2.8 SERVQUAL model of service quality................................................................................14
2.9 Concept of employee turnover.............................................................................................17
2.10 Factors affecting employee turnover.................................................................................17

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2.11 Causes of employee turnover in Singapore fitness industry..............................................18
2.12 Strategies for reducing employee turnover rate in Singapore...........................................19
2.13 Consequences of employee turnover in Singapore............................................................19
2.14 Impact of failure in customer retention on employee turnover.........................................20
2.15 Summary............................................................................................................................20
Research methodology...................................................................................................................22
3.0 Overview..............................................................................................................................22
3.1 Research outline...................................................................................................................22
3.2 Research philosophy............................................................................................................22
3.2.1 Reason for implementing positivism philosophy.........................................................23
3.3 Research approach...............................................................................................................23
3.3.1 Reason for implementing deductive approach.............................................................24
3.4 Research design...................................................................................................................24
3.4.1 Reason for implementing descriptive design................................................................25
3.5 Research strategy.................................................................................................................25
3.5.1 Reason for implementing survey research strategy......................................................25
3.6 Sampling technique and sample size...................................................................................26
3.6.1 Reason for implementing random probability sampling technique..............................26
3.7 Data collection process........................................................................................................27
3.7.1 Reason for implementing primary data collection process...........................................27

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3.8. Data analysis technique......................................................................................................28
3.8.1 Reason for implementing quantitative data analysis technique....................................28
3.8.2 Pilot study.........................................................................................................................29
3.9 Ethical considerations..........................................................................................................29
3.10 Accessibility issues............................................................................................................30
3.11 Summary............................................................................................................................30
Chapter 4: Data analysis................................................................................................................31
4.0 Overview..............................................................................................................................31
4.1 Descriptive analysis.............................................................................................................31
4.2 Inferential analysis...............................................................................................................35
4.3 Summary..............................................................................................................................42
Reflection section..........................................................................................................................44
References......................................................................................................................................49
Appendix 1.....................................................................................................................................60
Research Questionnaires for Gym Members.............................................................................60
Research Questionnaires for Managers.....................................................................................64

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Chapter 1: Introduction
1.0 Overview
The title of the research “Impact of failure in customer retention on trainers’ turnover in
Singapore’s fitness industry and the unintended consequences” was selected from Peter Senge
System Archetypes which is "Fixes that fail —A solution is rapidly implemented to address the
symptoms of an urgent problem." Failure in retaining the customers has resulted in minimized
profit that needs to be overcome by keeping low cost by letting go staff through turnover, more
staff turnover will make the organization lose the revenue through personal training. The quick
fixes intend to mitigate the unintended consequences that are difficult to understand in the
beginning but results in the symptoms of customer retention failure (Bernal-Garcia et al. 2014).
1.1 Research aim
The aim of the research is to analyze the failure in customer retention on trainers’
turnover in Singapore’s fitness industry that results in unintended consequences.
1.2 Research objectives
The objectives of the research are:
 To investigate ways the failure in customer retention has resulted in trainers’ turnover in
Singapore’s fitness industry
 To examine the various factors that has led to low customer loyalty in the various
organizations in Singapore’s fitness industry

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 To find out the unintended consequences those are faced by organizations in Singapore’s
fitness industry as a result of the repeated cycle of failure to retain client and trainers’
turnover
 To establish the various strategies that can be adopted by the fitness industry in Singapore
to control the failure to retain customers and maintain customer loyalty
1.3 Research questions
The research questions are:
 What is customer retention and what role does it play in fitness organizations?
 What factors lead to low rates of customer retention in the fitness industry in Singapore?
 What are the unintended consequences of the repeated cycle of failure to retain client and
trainers turnover?
 What strategies can be applied in the fitness industry to enhance customer loyalty and
hence promote customer retention?
1.4 Research hypotheses
The research hypotheses are:
H0: failure in customer retention results in an increase in the rates of trainer’s turnover in
Singapore’s fitness industry.
H1: low rates of customer retention in Singapore’s fitness industry arise from failure to exceed
customer expectations, failing loyalty programs, and lack of any unique relevance.
H2: repeated cycle of failure to retain client and trainers turnover result in the unintended
consequences of low profitability and business failure.

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Customer retention
Communication
Consistency
Trust
Relationship
Good values
Sincere
Employee turnover
Chapter 2: Literature review
2.0 Overview
The literature review chapter is the basis of the overall study, as this chapter sheds light
on the concepts, factors, advantages and challenges for both the independent and the dependent
variable. Based on the identified variables, the overall literature review is structured and
conducted. For this study, the customer retention is identified as the independent variable and
employee turnover is the dependent variable. Based on the research aim and objectives, failing in
ensuring effective customer retention has resulted in increased in turnover rate of the trainers in
the fitness industry in Singapore by conducting extensive research on the impact of failure of
customer retention on employee turnover rate.
2.1 Conceptual framework

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Figure 1: Conceptual framework
(Source: Created by Author)
2.2 Fitness industry
Maintaining wellness and health by performing and conducting wide range of physical
and mental exercises comprises of the fitness industry. Over the past decades, the fitness industry
has gained huge popularity, as the majority of the population has become health conscious. A
large portion of the fitness industry comprises of the exercise studios and gyms. In addition to,
other franchises of the fitness industry includes personalized and specialized fitness lesson
(Bernal-Garcia et al. 2014). Being healthy is now trending because this lifestyle is much
appreciated for both personal and professional lifestyle. In a developing country like Singapore,
fitness and wellness is highly demanded due to the current trend of living a healthy lifestyle.
However, gap in terms of lesser number of fitness trainers is noticed in Singapore thereby,
resulting in increased demand of fitness gym in the country. For example, the demand has
increased to 2.5 million in 2015 from a mere 1.8 million in 2010 (Harvey, Vachhani and
Williams 2014). However, the fitness organizations are unable to retain the trainers that have
increased the employee turnover rate thereby, affecting the profitability of the business
organizations.
2.3 Concept of customer retention
Customer retention is the key aspect that determines the success of the business
organizations, as the companies can count the return of investment by considering the retained
customers. Effective customer retention is a bigger advantage and strategy of ensuring success
that attracting new customers. As commented by Degbey (2015), customer retention is defined
as the range of actions and activities undertaken by the business organizations to decrease the