Building Relationship between Education Institutions and Students: Student Loyalty in Self-Financed Tertiary Education

This study attempts to test the applicability of relationship marketing concepts within the self-financed tertiary education (SFTE) industry. Building on the well-established relationship marketing concepts, a conceptual model is proposed in this study to investigate the casual relationship between relationship commitment and student loyalty, and the key determinants of relationship commitment (relationship benefits, relationship termination costs, shared values, and trust). To achieve the above objectives, an in-depth study was conducted in a leading SFTE institution in Hong Kong. Structured questionnaires were used to collect data. Structural equation modeling approach was used to evaluate the explanatory power and casual links of the model. The results indicate that relationship commitment is a strong driver of student loyalty. Second, relationship benefits, relationship termination costs, and shared values are found to have positive influence on relationship commitment. Among these three determinants, the construct of relationship benefits is found to be the most important factor affecting relationship commitment. Third, trust is found to have no significant impact on relationship commitment in SFTE environment. The research findings provide new and useful insights to the management of SFTE in building relationship with students and resources allocation. The study discusses the implications of these findings and suggests areas for future research.