What accounts for students' loyalty? Some field study evidence

Abstract

Purpose: Public funding of institutions offering higher education is becoming scarcer, more complex, and to an ever‐increasing extent performance‐based. Concerning the teaching area the financing is partly based on student credits and professional degrees. Thus student loyalty has become an important strategic theme. The purpose is to study relationships between student satisfaction, students' perceptions of the reputation of an educational institution and student loyalty; hypothesizing positive relationships between satisfaction and loyalty, reputation and loyalty, and between satisfaction and reputation. Antecedents of student satisfaction and reputation are also included in the study. Design/methodology/approach: The data source is a survey among students at the bachelor level of a university college in Norway, analyzed by a structural equation modeling approach. Findings: The findings strongly support the three hypotheses. The university college may be looked upon as being satisfaction‐driven. Still reputation management is of great importance. Significant antecedents are identified and discussed. Research limitations/implications: This research has been applied to a specific university college. The research should be expanded to other institutions offering higher education. Practical implications: Based on a theoretical framework the study gives practical insight concerning drivers of student loyalty so that key success factors for the coming period of time can be identified. Originality/value: When determining the most appropriate management strategy, such insight is becoming even more important than earlier. By allocating resources to activities that are important for the students, the managers may increase the value offered so that student retention may be obtained, thus ensuring governmental funds in future.