Customer Satisfaction and Loyalty in Higher Education
A Case Study over a Five-Year Academic Experience
Petr Svoboda
1
and Jan Cerny
2
1
Department of Management, Faculty of Management, University of Economics, Prague, Czech Republic
2
Department of Exact Methods, Faculty of Management, University of Economics, Prague, Czech Republic
Keywords: Higher Education, Customer Loyalty, Customer Satisfaction, Students’ Behaviour, Knowledge-based
Modelling.
Abstract: Customer satisfaction and customer loyalty are widely accepted as critical factors in the long-term success
of any business that aims at positive word of mouth by customers and attracting them back for further
business relationships. This paper deals with student satisfaction and student loyalty in higher education
(HE). More specifically, this preliminary study aims at identifying the drivers which have the greatest
influence not only on student attraction, but also on student retention and it also evaluates the relationships
between satisfaction and loyalty in the course of time. Research data were obtained from 150 undergraduate
business students from Prague’s University of Economics’ Faculty of Management, Czech Republic. The
outcome of the further research will be a knowledge-based model describing the behaviour of students when
changing the individual parameters adjustable by the HE institution’s management. The study will help HE
institutions’ managers to better understand the wants and needs of their customers in order to meet their
expectations.
1 INTRODUCTION
Universities put ever more emphasis on customer
satisfaction as they realize that they belong to
a service industry facing many competitive
pressures. Customer satisfaction has been connected
with increased profitability by generating repeated
sales, a positive word of mouth feedback and
customer loyalty. According to Martensen et al.
(2000), customers in HE can be divided into the
following groups; students, employees, the public
sector and the government, and industry and the
general public. In this paper, students are viewed as
the main customers. However, in the context of a HE
institution, defining the customer concept is not
a trivial undertaking. Students are considered as
primary customers – as without students to teach –
there is no business for HE institutions or services to
provide (Wallace, 1999).
Student satisfaction has been related to
recruitment and retention of students and also to
academic success, which has led HE institutions to
focus on such factors that help them attract students
more effectively and create a supportive learning
environment for them (Athiyaman, 1997). HE
institutions have also realized that understanding the
needs and wants of students as their customers and
meeting their expectations are very important to
develop environments in which students can study
effectively (Seymour, 1993). Furthermore, according
to psychologists, student satisfaction helps to build
self-confidence, which helps students acquire
knowledge, develop useful skills, and become more
confident.
For HE institutions, student loyalty is also
becoming an increasingly important strategic theme
due to several factors, such as increased
performance-based public funding, increased student
mobility, and increased global competition
(Helgesen and Nesset, 2007). This applies also in the
countries, where the majority of local universities
are financed from public resources as there still
remains a reasonable space where HE institutions
heavily compete against each other for their students
(Svoboda et al., 2012). Retaining students is
perceived as being as important as attracting and
enrolling them. By developing insights into student
loyalty, HE institutions can achieve great benefits
(Kotler and Fox, 1995), as the most important
consequence of loyalty is the positive connection to
431
Svoboda P. and Cerny J..
Customer Satisfaction and Loyalty in Higher Education - A Case Study over a Five-Year Academic Experience.
DOI: 10.5220/0004621704310436
In Proceedings of the International Conference on Knowledge Discovery and Information Retrieval and the International Conference on Knowledge
Management and Information Sharing (KMIS-2013), pages 431-436
ISBN: 978-989-8565-75-4
Copyright
c
2013 SCITEPRESS (Science and Technology Publications, Lda.)
business performance (Zeithaml, 2000).
Despite the growing importance of these
strategic topics, there are not many books or papers
related to knowledge-based research on student
satisfaction and loyalty. On the other hand, the
knowledge-based models of customer satisfaction
and related constructs (e.g. quality drivers and
loyalty) for a variety of goods and service sectors
have been developed in recent years (Zeithaml et al.,
2006).
The purpose of the research is to create
a knowledge-based model, which will best reflect
the reality of HE institution and its components. This
will be reached by adopting the insights and
experiences of the stakeholder groups, beginning
with students – through the knowledge management
approach. The main goal of the analysis is to
identify processes and activities to increase student
satisfaction, student loyalty and the performance of
the HE institution. The purpose is not only of
academic interest, but it should also have important
practical interest for the management of institutions
offering higher education.
The structure of the presented paper is as
follows: the next section presents a review of the
related literature. Subsequently, the context, data,
and research methodology are briefly discussed,
followed by a presentation of the acquired results.
The last chapter is dedicated to the discussion of
findings and their implications for managers. It also
presents some limitations and recommendations for
a further research, and winds up with a conclusion.
2 LITERATURE REVIEW
Student satisfaction and student loyalty are ideas that
are very simple to grasp at first sight. However,
concepts that are seemingly clear to everyone are
suddenly more difficult to define. There is a lot of
literature attempting to clarify these issues, to
determine their impact on each other and to develop
measures to quantify them.
2.1 Customer Satisfaction
Hunt (1977, p. 49) defines satisfaction as “the
favourableness of the individual’s subjective
evaluation of the various outcomes and experiences
associated with buying or using the product”.
Student satisfaction, in context of education, refers
to the favourability of a student’s subjective
evaluations of the education outcomes and
experiences (Oliver and DeSarbo, 1989).
Satisfaction is constantly being influenced by overall
experiences, since it is based on experience (Oliver,
1980).
A rather different concept of satisfaction is
related to Herzberg’s two-factor theory of
motivation (Herzberg et al., 1967). This theory is
based on the assumption that factors influencing
positive satisfaction (satisfiers or motivators) are
different from other factors that cause dissatisfaction
(dissatisfiers of hygiene factors). Satisfiers are
generally considered as factors that are part of the
job and under the control of self, while dissatisfiers
are part of the environment and greatly under the
control of someone else than the student.
2.2 Customer Loyalty
Customer loyalty is also defined in different ways by
various researchers. Oliver (1997) sees customer
loyalty as “a deeply held commitment to rebuy or
repatronize a preferred product or service
consistently in the future, despite the fact that
situational influences and marketing efforts having
the potential to cause switching behaviour” (p. 392).
Lam et al., (2004) define customer loyalty in
a different way, as “a buyer’s overall attachment or
deep commitment to a product, service, brand, or
organization” (p. 294).
The definition of students as loyal customers has
a significant contextual aspect as HE institutions
benefit from having loyal students, not only when
students are formal attendees. HE institutions and
their success also depend upon the loyalty of their
former students. Therefore, as stated by Henning-
Thurau et al. (2001), student loyalty relates to
loyalty both during and after students’ academic
period at a HE institution.
2.3 Measuring Student Satisfaction and
Student Loyalty
A number of research papers on student satisfaction
and student loyalty are based on specific instruments
and models developed by the authors themselves.
Additionally, many HE institutions prefer to develop
their own instruments and models to evaluate
student satisfaction and student loyalty. As it is
generally known, customized instruments have a
great advantage of framing many of the question
items involving the mission of the institution and the
particularities of their offerings and student
populations. The disadvantage of this approach
could be the fact that the data cannot be easily
compared. On the other hand, this results in a variety
KMIS2013-InternationalConferenceonKnowledgeManagementandInformationSharing
432
and richness of perspectives on student satisfaction
and student loyalty.
Probably one of the most important models to
measure customer satisfaction is the ServQual
model, which has been proposed by Parasuraman et
al., (1985). According to this model, customers are
asked to evaluate their satisfaction with a number of
factors using a scale measuring their expectations
and then filling in another scale measuring perceived
performance. The model has been extended to
include another scale that inquires about the
importance of each factor to the customer, in what is
known as the weighted ServQual model. Commonly,
however, only two scales are included: one with
question items framed with a 5- or 7-point scale
ranging usually from “much better than expected” to
“much worse than expected” ratings, and another
scale with ratings of the importance of each factor to
the respondent.
Student satisfaction and student loyalty have
been modelled in many ways to relate the factors
with their antecedents as well as explain the impact
of satisfaction and loyalty on other variable factors.
In expert literature, models vary mainly in terms of
methodologies used to quantify the significance and
strength of the relationships among the variables,
which also differ. Different underlying conceptions
of the nature of customer satisfaction and customer
loyalty have been revealed by different approaches
to their modelling.
3 RESEARCH METHODOLOGY
The presented paper mainly evaluates the
satisfaction and loyalty from the students’ point of
view. The research community at large does not
agree on how to evaluate these concepts. A number
of researchers recommend different approaches.
In this study, the chosen approach to measure
student satisfaction with the HE institution is as
recommended by Ryan et al., (1995). This approach
is based on three questions related to (i) summary
judgement, (ii) comparison with expectations and
(iii) comparison with the optimal situation,
respectively. These three questions can rather be
categorized into a cumulative experience level than a
transaction specific level. Such cumulative
evaluations are likely to be better predictors of
loyalty than evaluations at the transaction specific
level (Olsen and Johnson, 2003).
Student loyalty is measured by asking questions
about behavioural intentions, more specifically
about the following three items: the probability of
recommending the faculty to acquaintances, the
probability of attending the same faculty if starting
anew, and the probability of attending further
education at the faculty. The data analysis uses three
items to measure student satisfaction and three items
to measure student loyalty. All indicators use a five-
point Likert scale where 1 = the most favourable
response alternative and -1 = the least favourable
response alternative. Arguably, this scale has the
advantage of being more specific in the area of the
HE sector. To better understand student concerns,
the research questionnaire allowed textual answers
in addition to ratings.
3.1 Data Collection
A structured questionnaire survey was adopted for
this study to evaluate the students’ perception of the
entire HE institution’s environment. This design
helped describe the nature of perception that
students have in terms of the various factors
affecting their perception of the HE institution. The
questionnaire was distributed among students of
Prague’s University of Economics’ Faculty of
Management, based in a small South-Bohemian
town of Jindrichuv Hradec. The University of
Economics is the largest economic educational
institution in the Czech Republic, even though the
Faculty of Management is its smallest faculty with
a total of 977 registered students in a three-year
bachelor and a two-year master-study programmes.
The faculty also has a doctoral study programme,
but this one is not covered in the presented study.
To collect data from a sample, a survey method
using self-completion questionnaires was used. The
questionnaire was distributed among current
undergraduate students of the faculty. The
questionnaire was distributed among students from
all five academic years to provide a spherical point-
of-view about the particular HE institution and the
opportunity to point out the differences among
students of different years of their studies. Students’
participation was voluntary and completely
anonymous. The sample has been differentiated only
by gender, the type of study and the year of study.
The instrument of the survey was a self-
explanatory questionnaire that could be filled in by
respondents themselves. The questions asked were
short, clear and easy to understand. The
questionnaire contained brief written instructions to
assist students in answering the questions and
a statement of the study’s purpose. A pre-testing of
the questionnaire was performed with several
students of the faculty, which helped check for any
CustomerSatisfactionandLoyaltyinHigherEducation-ACaseStudyoveraFive-YearAcademicExperience
433
perceived ambiguities, errors or omissions.
3.2 Data Sample
The data have been collected in a survey (Spring
2013) among bachelor and master-level students of
Prague’s University of Economics’ Faculty of
Management. The sample consisted of 150
respondents, representing about 15% of the
population of the faculty’s students. 51% of the
respondents are at the bachelor-level, the rest at the
master-level. 79% of the respondents are full-time
students and 30% of them are male. The year
distribution is 13% first-year, 19% second-year,
19% third-year, 17% fourth-year, and 32% fifth-year
students. A comparison of this sample to the number
of students in each field of studies suggests that the
sample is not non-representative. The data were
collected by means of a questionnaire.
4 RESEARCH RESULTS
The partial research results concerning student
loyalty are very interesting. While student
satisfaction over the five years is relatively at the
same level (Figure 1), student loyalty is increasing
year by year. This can be seen in Figure 3, which
represents the responses to the question whether
students would recommend the faculty to their
friends. This result could be supported by Figure 2,
where bachelor students’ responses to the question
of their study continuation in the faculty’s master
study programme can be seen. However, the results
are from different student bodies and further
examination on the same student body would be
needed. Although both loyalty questions are quite
different, the results are indicating a strengthening
positive bond of students to the particular faculty. In
the next paragraphs, the reasons and possible
explanations will be discussed in more detail.
In the first academic year, some students already
praise the friendly milieu of the town and especially
the family atmosphere of the small faculty and
related helpfulness of both the academic and the
administrative staffs. On the other hand, relatively
high percentage of students is dissatisfied with the
faculty location and the necessity of commuting.
This corresponds to relatively balanced answers
about the loyalty (Figures 2, 3). Student satisfaction
at this stage of studies is already relatively high
(Figure 1), which is a positive finding, while there
are only few signs of student loyalty. It has to be
noted that the study was conducted during the end of
the academic year. If the survey were done in the
first half of the academic year, the results would
probably be different, especially in this category.
Figure 1: Student satisfaction by the respective years of
studies.
In the second academic year, students seem to be
much less confused. Student satisfaction is nearly at
the same level as in the first academic year (Figure
1), while student loyalty has increased (Figures 2, 3).
Besides the staff helpfulness and family atmosphere
of the faculty, students of the second academic year
emphasize the quality of particular facilities, such as
Student Affairs’ Department or comfortable study
and reading rooms, and also the quality of the whole
institution and its staff. With the rising experience
and the possibility of comparison of the second-year
students, also many more negative features have
occurred. Most students are complaining mainly
about the European modularization system, which
was introduced at the university one year ago. This
new modular system implies significant changes in
the education system, which results in an
information chaos.
The last academic year of the bachelor study
programme also brings about certain specific
features. Almost all students are highlighting the
previously mentioned advantages. On the contrary,
students’ complains quite vary. Some students
complain about the insufficient dotation of the
particular subjects, others about the lack of practice
or poor information flows between the management
of the Faculty and them. Nevertheless, the positive
influences prevail and results in the growth of
student loyalty, which is represented by Figures 2
0%
10%
20%
30%
40%
50%
60%
70%
80%
1. 2. 3. 4. 5.
Percentageofrespondents
Numbersofstudentsintherespectiveyearsof
theirstudies
Absolutelydissatisfied Ratherdissatisfied
Neutralattitude Rathersatisfied
Absolutelysatisfied
KMIS2013-InternationalConferenceonKnowledgeManagementandInformationSharing
434
and 3.
Figure 2: Students were given the following question to
answer: “Do you plan to attend further education (master-
study programme) at the faculty you are studying at?”
Figure 3: Students were given the following question to
answer: “Would you recommend the faculty you are
studying at to your acquaintances?”
As to the master-study programme, trends of
both student satisfaction and student loyalty from the
bachelor-study programme have continued. Students
appreciate mainly the kindness of both the academic
and the administrative staffs together with a family
approach. In addition, students’ perception of the
teachers’ practical knowledge and experience has
also increased. They are pleased with the
involvement of experts from practice in the teaching
process and are calling for a closer interconnection
of education with practice. Another interesting topic
is students’ perception of the university’s image.
Some students appreciate the excellent image of the
institution’s brand, other students criticize the
decreasing demands and easier passibility through
their studies. Students of the master-study
programme also appreciate positive relationships
among themselves. On the contrary, many of them
are strongly dissatisfied with a low hour dotation in
foreign language education at the above-mentioned
institution. However, their willingness to
recommend the institution to their friends is still
growing year by year (Figure 3).
5 CONCLUSIONS
Following the detailed analysis of the conducted
survey, recommendations can be made based on the
students’ perceptions. These could be taken into
consideration by HE institutions’ managers in order
to improve their knowledge management systems.
During the research, many significant connections
between student satisfaction, student loyalty and
other factors have been found. Student satisfaction is
positively correlated with student loyalty
(correlation coefficient is 0.7). Student satisfaction
does not change over the years, while student loyalty
is increasing year by year from the beginning to the
end of the five-year studies (both bachelor and
master-study programmes). The quality of the HE
institution seems to be a clear antecedent of both
student satisfaction and student loyalty. The quality
of education appears to be the most important, but
the quality of facilities could also have a strong
impact on these factors. It may also be very
interesting to further investigate the influence of the
quality of information and communication channels,
frequently mentioned by the students, on these
factors.
HE institutions have begun to be much more
interested in student satisfaction and student loyalty
due to the increasingly performance-based nature of
public funding. The performance-based funding will
most probably become even more important in the
future. Consequently, managers of HE institutions
are very interested in knowing the drivers which
have the greatest influence not only on student
attraction, but also on student retention. Such
knowledge and insight can help managers make
decisions concerning the allocation of scarce
resources. Additionally, managers can identify
0%
10%
20%
30%
40%
50%
60%
70%
1. 2. 3.
Percentageofrespondents
Numbersofstudentsintherespectiveyearsof
theirstudies
No Probablynot
Idonotknow Probablyyes
Yes
0%
10%
20%
30%
40%
50%
60%
70%
1. 2. 3. 4. 5.
Percentageofrespondents
Numbersofstudentsintherespectiveyearsof
theirstudies
No Probablynot
Idonotknow Probablyyes
Yes
CustomerSatisfactionandLoyaltyinHigherEducation-ACaseStudyoveraFive-YearAcademicExperience
435
processes and activities that will increase student
satisfaction and student loyalty. This could be done
by conducting and thoroughly analysing student
surveys. In this way, HE institution can enhance the
quality of education offered to students, thus
increasing both student satisfaction and student
loyalty. These steps will finally be reflected in the
increased financial performance of a HE institution.
This study deals with a small faculty located in
a relatively small town, therefore, more studies from
a higher education sector are highly recommended.
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