Abstract

The higher education sector is increasingly facing competition from tertiary providers at both a domestic and international level. This has led to a range of ever more complex challenges with regard to the attraction, maintenance and retention of the student base. There is an important need therefore to understand the factors which contribute to positive perceptions of tertiary services and the way in which these affect the student experience and drive student retention. The improvement of retention rates through the formation of meaningful and long-term relationships with students is subsequently of high importance. This research explores students’ perceptions of the relationship that they enter into with their chosen tertiary institution and the effect that this has on the development of student loyalty. In particular this research examines the salience of relationship appeal, satisfaction, affective commitment and trust on student loyalty. A structural equation modelling approach was adopted using a sample of 426 first year undergraduate students of a large Australian metropolitan university. Importantly, next to satisfaction, relationship appeal was found to be the second strongest determinant of student loyalty. This was then followed by affective commitment. Interestingly trust did not influence relationship development. Conclusions, implications and opportunities for future research are presented. From a managerial perspective, it is expected that uncovering first year students’ perceptions of the student-institution relationship will enable higher education institutions to develop more targeted relationship marketing programs and increase student retention.

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