INFLUENCE OF USAGE AND CONTRACTUAL BINDS ON CUSTOMER RETENTION IN CONTINUALLY DELIVERED SERVICES: EVIDENCE FROM THE PHYSICAL FITNESS BUSINESS

Abstract

Attempts to preserve the bond with customers and to create means to increase firms captured value is a persistent management concern and subject of extensive academic research. From the service-dominant logic perspective, no value is created until the beneficiary of the service, often the customer, uses the products or services of a firm in its particular context. Therefore, the purpose of this paper is to show that there is a direct relationship between member usage and customer retention in continually delivered services. Data were extracted in the context of physical fitness business. The proposed model included price and membership length to evaluate membership renewal. Using logistic regression and unidirectional ANOVA, the results show that frequency of use was the most relevant variable related to customer retention. Surprisingly, price and membership length showed no impact on retention. We discuss these findings in the perspective of value creation.