THE SIGNIFICANCE OF SATISFACTION IN LOYALTY AND WORD OF MOUTH OF INDONESIA PRIVATE HIGHER EDUCATION CUSTOMER

Higher education institutions, especially private universities or private colleges, which are now regarded as service providers in education industry must find creative ways to survive. There are many ways they can perform to maintain the loyalty of their customers and to spread up positive information about them. One of those can be done by increasing customer satisfaction. This study aims at analyzing how customer satisfaction influence customer loyalty and word of mouth in private higher education in Indonesia. This study takes primary data. The data gathered using questionnaire, distributed to 200 undergraduate students of private colleges in Jakarta. The data data processed using statistical calculations Structural Equation Modeling (SEM) with the help of computer program Analysis of Moment Structure (AMOS). The result of construction confirmatory test shows that the coefficient of direct influence between customer satisfaction and customer loyalty has positive and significant value, that is 2.667. Moreover, customer satisfaction has positive significant influence on word of mouth, with the coefficient of 3.025. Thus, increasing student satisfaction will impact on their loyalty and word of mouth activities. Therefore, the effort to increase student satisfaction must be improved in order to increase loyalty and word of mouth.