The role of psychological ownership on satisfaction and loyalty: The moderating effect of group identity

Abstract

Private clubs are organizations where people go to enjoy social and recreational activities with other people of similar interests and backgrounds. Customers, commonly called “members” pay a fee to frequent the club and membership is often associated with luxury service and elevated social class. While an understanding of club member behavior is critical to financial health however the subject has not been studied as thoroughly as it has in other hospitality industries. Given the need for research on member behaviors, the purpose of this study was to investigate how club members’ psychological ownership and group identity influence their satisfaction and loyalty by employing the egocentric categorization theory and social identity theory. This study particularly examined (1) how psychological ownership impacts satisfaction and loyalty, (2) if satisfaction mediates the relationship between psychological ownership and loyalty, and (3) how group identity as a moderator interacts with psychological ownership to influence satisfaction and loyalty. This study measured psychological ownership at two levels (i.e., individual and collective) and group identity at three levels (i.e., solidarity, satisfaction, and centrality). Quantitative questionnaires were emailed to 4993 members from six clubs in the United State and a total of 511 responses were ultimately deemed usable. Structural equation modeling examined the impact of individual and collective psychological ownership on satisfaction and loyalty. The findings revealed that individual psychological ownership directly impacts satisfaction and indirectly impacts loyalty through satisfaction as a mediator whereas both individual and collective psychological ownership directly impact loyalty. Furthermore, latent moderated structural equation analysis explored the moderating effects of the group identity dimensions: solidarity, satisfaction, and centrality on the relationships between psychological ownership, satisfaction, and loyalty. The findings showed that the group identity dimensions of solidarity and centrality moderated the relationships of individual and collective psychological ownership on satisfaction. Group identity becomes a more prominent predictor of satisfaction in instances of low psychological ownership. In addition, identity centrality as a moderator strengthened the relationship between collective psychological ownership and loyalty. This paper makes a valuable contribution to the literature on club member behavior by examining club members themselves. The findings imply that psychological ownership impacts satisfaction and loyalty in different ways. Specifically, satisfaction is felt primarily through the individual psychological ownership however loyalty is felt through both individual and collective aspects. Furthermore, by integrating egocentric categorization theory and group identity theory in the same model, this study enhanced the predictive power for both satisfaction and loyalty and offered a more thorough understanding of club members’ loyalty. Overall, the findings provide the club industry with an important evidence to describe how psychological ownership and group identity play critical roles in developing satisfaction and loyalty. Therefore, findings will help the club business to develop a more effective loyalty program and strategy that considers psychological ownership and group identity as important predictors of satisfaction and loyalty.