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A Study of Visitors’ Recreational Experience Types in Relationship to
Customer Retention in Leisure Farm
Ping-Tsan Ho, Lecturer, Department of Leisure, Recreation and Tourism Management, TaTung Institute of Commerce and Technology, Taiwan Hsin-Yu Tsai, Assistant Professor, Department of Leisure, Recreation and Tourism Management, National Kaohsiung University of Hospitality and Tourism
ABSTRACT
The objective of this study is to explore the effects of four realms of experience proposed by Pine and Gilmore (1999) on customer retention. Sontenkan Leisure Farm was selected for the research site. Two hundred and forty valid questionnaires were collected and descriptive statistics, factor analysis and regression analysis were used to analyze the data. The results indicated that: Among four realms of experience proposed by Pine and Gilmore(1999), visitors obtained highest satisfaction with aesthetic experiences, followed by escapist experiences, entertainment experiences and educational experiences. Escapist and aesthetic experiences had a positive effect on revisit intention and entertainment, educational and aesthetic experiences have a positive effect on customer loyalty. Keywords: Leisure farm, Recreational experiences, Customer retention
INTRODUCTION
The rural area has been a space for agricultural production and it is also a part of farmer’s living space. With a rapid industrialization of Taiwan, quality of life is getting worse from vigorous city development. “Return to nature” has become one of recreation activities that people are pursuing in recent years. Rural area with abundant natural and cultural resources therefore has been promoted as optimal space for relaxation and holiday making for city residents. At the same time, the traditional agriculture has been threatened from a liberalized market of international agricultural trading after Taiwan joined the World Trade Organization (WTO) in 2002. To achieve agricultural sustainable, the traditional agriculture is transformed into leisure agriculture, which brings the opportunities of additional values. A model for leisure agriculture is then developed that combines the concept of farmland culture/lifestyle, agriculture production and natural ecology (Department of Agriculture Extension of Taiwan University, 1996). This provides an opportunity for Taiwanese to spend their leisure time in experiencing agricultural life. Pine and Gilmore (1999) proposed that Service Economy based on delivering services has shifted to an Experience Economy based on staging experiences. Some Taiwanese researchers also observe this progression of economic value in leisure farm industry (Tuan, 2000; Lin, 2001). They suggested that leisure farms with rich and diversified natural resources provide a platform for creating memorable events for their visitors and that memory itself becomes the product - the “experience.” Leisure agricultural life not only meets visitors’ (consumers) need for returning farmland lifestyle, but also provides diversified life experiences. With increasing numbers of leisure farms in recent years, consumers have more choices and bargaining power in decision making. Operators of leisure farms now face sales threats from competitors. Under such circumstances, satisfaction of leisure farm experience in relationship to customer retention has become important management issue. This paper explores the effects of four realms of an experience- entertainment, education, escapist and estheticism proposed by Pine and Gilmore (1999) in relationship to customer retention and provides operational suggestions for leisure farm operators.
LITERATURE REVIEW
Experience Economy Pine and Gilmore (1999) observed that the experience component of the economy is growing rapidly, outstripping the service sector. They further explained the difference between service and experience as following: When a person buys a service, he purchases a set of intangible activities carried out on his behalf. But when he buys an experience, he pays to spend time enjoying a series of memorable events that a company stages-as in a theatrical play-to engage him in a personal way (p.2). Experience-type transactions occur when a company uses services as the stage and goods as props to engage customers in a memorable event. Boswijk, Thijssen and Peelen (2007) defined experience as “an immediate, relatively isolated occurrence with a complex of emotions that make an impression and represent a certain value for the individual within the context of a specific situation.” More than being memorable as Pine and Gilmore explained, experience must be emotionally meaningful for individuals. Grant (2000) proposed 12 rules for building successful brands in the 21st Century and differentiation of experience is one of the rules. In addition, Yelkur(2000) suggested that the customer's experience of the service, the feelings and perceptions, have a pervasive influence on attracting new customers and retaining existing customers. Pine and Gilmore (1999) have identified four types of experience, including (1) entertainment, (2) education, (3) escapist and (4) estheticism. Figure 1 shows the realms of an experience in terms of two conceptual dimensions: (1) The extent of participation by the customer/guest (which may vary from active to passive) and (2) extent of involvement in the experience (which varies from immersion to absorption). The coupling of these two dimensions defines the four realms of an experience. They are mutually compatible and intermingle to form unique personal experience. A rich of mix four realms is known as a “sweet spot” in the middle of the framework. Pine and Gilmore suggested that using the experiential framework as a guide to help service providers creatively explore the aspects of each realm that might enhance the particular experience they wish to stage.
Figure 1: The experience realms
Customer Retention Customer retention is not only a cost effective and profitable strategy, but in today's highly competitive business environment it is necessary. This is especially true when 80% of sales come from top 20% of customers. According to the findings of Reichheld and Sasser (1990), a 5% increase in customer retention translated into a 25% to 125% increase in the profitability of nine selected service firms. Customer retention is concerned with maintaining the
Validity and Reliability of Visitor Satisfaction and Customer Retention Scales Item analysis and Cronach’s α were applied to examine validity and reliability of visitor satisfaction and customer retention scales. The item-to-total correlation describes the correlation between a single indicator (=item) and the sum of all indicators (=total) that are supposed to represent one factor (Wu and Tu, 2005). The result showed that visitor satisfaction scale’s 23 item-to-total correlations ranged from 0.52 to 0.74, indicating high convergent validity of the item under scrutiny. Customer retention scale’s 9 item-to-total correlations ranged from 0.75 to 0.81, also representing high convergent validity of the item. In terms of critical ratio (CR), the satisfaction scale’s values range from 8.66 to 15.85 (p<0.01) and customer retention scale’s value range from 12.01 to 20.40 (p<0.01). Both scale showed good discrimination ability among evaluated items. Last, Cronach’s α was used to assess the reliability of scales. According to Nunnally (1978), Cronbach's α value should be at least greater than or equal to 0.70 so to be considered acceptable. In this study, Cronach’s α of the overall satisfaction scale was 0.946 and four realms of an experience- entertainment (0.862), education (0.866), escapist (0.904) and estheticism (0.816). Cronach’s α of the customer retention scale was 0.921. In summary, both visitor satisfaction and customer retention scales had acceptable internal consistency reliability and validity.
RESULTS
Visitors’ Profile There are 143 female (59.6%) and 97 male (40.4%). The age group of 18 to 30 years old accounted the largest group with 140 people (59.1%), followed by 31 to 40 (19.8%) , 51 to 60 (7.6%) and more than 61 years old (3.0%). On the educational level, majority of respondents were college/university graduates (59.2%) and high school graduates (29.0%). As for visitors’ occupation, service industry accounted the largest sample (25.9%), followed by manufacturing/industrial industry (14.6%), freelance (12.3%) and others (4.2%). Regarding income distribution, forty- five percent of respondents had monthly incomes under NT$20,000. Twenty-four percent of respondents had monthly incomes between NT$20,000 and NT$30,000. Respondents with more than NT$80,000 monthly income accounted the smallest group (3.4%).
Visitor Satisfaction with Four Realms of Experience Within four realms of experience (Table 1), visitor satisfaction of esthetic experience obtained the highest score (m=3.49), followed by escapist experience (m=3.46), entertainment experience (m=3.19) and educational experience had the lowest satisfaction score (m=2.92). In terms of individual evaluative item, “The opportunity to relax” ranked the highest satisfaction (m=3.71). Next, “The cleanliness of leisure farm environment” (m=3.65), “To recuperate physical strength and mind” (m=3.63), “The quality of footpath, close to nature” (m=3.48), “The primitive farm view” (m=3.41) and “To provide abundant animals and plant ecology” (m=3.41). On the other hand, visitors were not satisfied with items related to educational purpose, such as “To perform farm production process such as growing vegetables/crops” (m=2.78), “Exhibition for farm production and farm lifestyle” (m=2.67), “To perform dairy/agricultural production process and method” (m=2.65) and “To perform livestock breeding such as oxen, bulls, and cows, horses, cattle, sheep, or hogs” (m=2.60). According to above findings, Sontenkan Leisure Farm showed competence to satisfy visitors’ needs of esthetic and escapist experience. Because the design of Sontenkan Leisure Farm does not emphasize much on livestock breeding or farm production, visitors’ experience on farming education is relatively low. Therefore, the findings reflected dissatisfaction toward educational experience.
Table 1: Descriptive Statistics of Visitor Satisfaction with Four Realms of Experience Visitor Satisfaction Items^1 Mean S.D.^2 Rank Educational Experience 2.92 4
- The content of the interpretive board for wild plants is informative 3.40 1.05 7
- To provide professional interpretation and guiding services of animals and plants 3.38 .93 9
- Exhibition for farm production and farm lifestyle 2.67 .87 21
- To perform farm production process such as growing vegetables/crops 2.78 .98 20
- Measuring visitor satisfaction at 5-point scale. 5: very satisfied, 1: very dissatisfied
- S.D.= Standard Deviation
The Main Factors of Customer Retention Exploratory factor analysis was adopted to explore dimensions of customer retention in order to examine the relationship with four realms of experience proposed by Pine and Gilmore (1999). The result showed that Bartlett’s test of sphericity was 1561.67 and the Kaiser-Meyer-Olkin was 0.889 with p=0.000, implying that the adequacy of their correlation matrices for factor analysis. Principal Component factor analysis with Varimax Rotation was computed to calculate variation and loading factors. Table 1 presents the result of an exploratory factor analysis and revealed that the presence of two distinct factors that accounted for 75.932% of total variation. As seen in Table 2, five items with high loading were included in the first factor accounting for 39.60% of the explained variance. Because those items related to psychological intention to extend relationship with Sontenkan Leisure Farm, the first factor was named “revisit intention.” The second factor included four items accounting for 36.33% of the explained variance and was related to the behavior of choosing the same leisure farm no matter what. As a result, the second factor was named “customer loyalty.”
Table 2: Exploratory Factor Analysis of Customer Retention
Customer Retention
Revisit Intention
Customer Loyalty Communalities Factor 1 Factor 2 I will recommend this leisure farm to friends and relatives. 0.863 0.254 0. I would like to know more about promotional deal of this leisure farm. 0.860 0.178 0. I am willing to revisit this leisure farm. 0.856 0.217 0. I am willing to revisit this leisure farm because of its promotional deal. 0.719 0.374 0. I am willing to purchase other paid service (e.g. DIY or rides) 0.621 0.539 0. Although consumption in this leisure farm is more expensive, I am willing to visit and make a purchase.
Compared with other leisure farms, I revisit this leisure farm more than others.
Compared with other leisure farms, I spend more in this leisure farm. 0.253 0.864 0. Compared with similar types of leisure farm, I am more than willing to visit this leisure farm.
- To perform dairy/agricultural production process and method 2.65 .92 22
- To experience agricultural culture 2.98 .92 17
- To perform livestock breeding such as oxen, bulls, and cows, horses, cattle, sheep, or hogs 2.60 .90 23 Entertainment Experience 3.19 3
- To provide a variety of recreational activities 3.26 .93 16
- Recreational activities are easily operated 3.32 .99 13
- To provide unique recreational activities 2.92 .92 19
- To experience and recall childhood recreational activities 2.95 .92 18
- To provide Children's play equipment facility 3.30 1.07 15
- To provide a variety of package tour 3.37 .87 11 Esthetic Experience 3.49 1
- The quality of footpath, close to nature 3.48 .81 4
- The primitive farm view 3.41 .86 5
- The cleanliness of leisure farm environment 3.65 .87 2
- To provide abundant animals and plant ecology 3.41 .86 6 Escapist Experience (^) 3.46 2
- The opportunity to relax 3.71 .90 1
- Feeling isolated, feeling far away from human habitation 3.37 .94 10
- To experience rural life 3.31 .95 14
- To enjoy comfortable accommodation service 3.40 .94 8
- To recuperate physical strength and mind 3.63 .90 3
- To enjoy special local food 3.36 1.01 12
(Gerpott, Rams and Schindler, 2001) and willingness to extend long-term relationship (Ranaweera and Prabhu, 2003). Pine and Gilmore (1999) suggested that “sweet spot” occurs when four realms of an experience are mutually compatible and intermingle. However, this study did not show a holistic view of experience that comprises entertainment, education, escapist and estheticism experience in current Sontenkan Leisure Farm’s operation. Two or three experience among four realms of experience proposed by Pine and Gilmore were emerged in this study. For example, satisfaction of escapist and estheticism experience has a positive relationship with revisit intention. Concerning customer loyalty, satisfaction of entertainment, education and estheticism experience has a predictive power. In conclusion, Sontenkan Leisure Farm has not reached a point that creating a large group of “sweet spot” visitors. This finding will become a new management issue for the practitioner to consider. It is suggested the Sontenkan Leisure Farm should improve services related to education and entertainment experience so visitors have a greater chance to immerse in “sweet spot.”
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