GameStop: Building the Customer Loyalty Scheme

How did you think about building the loyalty scheme for Game Stop?

It’s interesting. I think that we recognized that it was really important to have a loyalty program. We wound up with 55 million members, something like that. The thought about it is, I think there are two different schools of thought, one is you’re a loyalty member and you get perks when you buy. The other is, the benefit is you’re a loyalty member and I get all of your data of what you want to buy. I think the benefits are the latter. I don’t think anybody goes to a store and goes, “I can get a loyalty perk if I buy Call of Duty.” I just don’t believe that. I do think that knowing all of your Nintendo customers and you launch a new Nintendo product, like the Nintendo Switch, knowing who those customers are and being able to market to them, that’s the real benefit of the loyalty program.

It’s actually more about information rather than just perks.

I think so. I don’t think on British Airways or American Airlines, you take a flight just to get some more points. I don’t think people do that. I think it’s the ability for them to market and send me an email that says, you can go to Jamaica for 100 bucks is much more powerful.

Which could then feed through into making you book to gain points and it’s like a feedback loop into the loyalty for the retailer.

Yes.

What was your biggest challenging launching the loyalty scheme?

I think the biggest challenge was to get the stores to be focused without forgetting about everything else. Video game retail is actually pretty complicated. I know it wouldn’t seem so from the outside, but there are a ton of things that you want your store to focus on, whether it’s getting praise, or selling used, or getting warranties on the hardware. You throw a new thing like loyalty into the mix, you want to make sure that that’s top of mind, but at the same time, you don’t want to take away from those other areas of focus. If you quit emphasizing it, loyalty signups will go down. If you emphasized it, loyalty signs would go up, but then warranties go down. Trying to get that as an area of focus and still maintain all of the other areas has always been a challenge.