Purpose Higher education institutions, particularly in the case of public universities, face the challenge of creating more value in an environment of increasing requirements and limitations. The purpose of this paper is to explore the relation of internal marketing (IM) with employees’ attitudinal outcomes, which aim to stimulate and retain motivated and customer-conscious contact employees. Design/methodology/approach Survey data of 94 customer-contact employees in a public higher education institution were analysed using partial least squares path modelling to explore and predict key target constructs. Findings The results demonstrate the relationship between customer-contact employees’ service empathy (SE), institutional IM initiatives and employees’ attitudinal outcomes in the public sector, specifically higher education institutions. Research limitations/implications The current study relies on self-reported data and a small sample of customer-contact employees working only on enrolment-related areas. Further studies should be designed for theory confirmation and generalizability of the results. Practical implications Top managers in public higher education institutions must encourage organizational identification through IM initiatives, such as well-established internal communication procedures. Academic management should continuously train and retain customer-contact employees that have developed SE and a sense of belonging to the organization. SE must be incorporated in the job descriptions and training of customer-contact employees. Originality/value The study contributes to the limited literature on the use of IM and SE in the public sector, specifically higher education institutions.