The context of this study centres on Higher Education in South Africa, the role that this sector plays in terms of economic development and the implications that face Institutional management in retaining students in the Higher Education system. Central to this study is the notion that student development theory can be used as a basis towards understanding the customers of Higher Education, how to better serve the customers needs and finally, retain students in the system through more effective management practices. The education sector is growing at an increasingly rapid rate as a result of strategic goals of countries and organisations such as the United Nations promoting the notion of education for all people (Altbach, Reisberg & Rumbley, 2009). The aim of the strategic goals adopted by developing countries in particular is to enhance the human capital or skills and knowledge of its people since education is a known contributor towards economic, social and political development. Higher Education in particular is known to contribute towards the human capital and economic development of a country. The Higher Education sector in South Africa for instance contributes approximately 1.5 percent to the country‟s gross domestic product (GDP), significantly higher than other industry sectors (apart from gold and agriculture) in the country (van Heerden, Bohlmann, Giesecke, Makochekanwa, & Roos, 2007). Figure 1.1 provides a context of the relevant importance of the higher education sector towards economic growth.