How GameStop’s recently launched PowerUp Rewards powered up to 6 million members in just a few months
by Jenn McMillen and Mike Hogan
You’ve seen the media reports of the excitement generated when a sequel to a hot video game is released. Lines of avid players waiting for the newest Medal of Honor, the latest Halo, the introduction of Fallout New Vegas—some dressed in costumes inspired by the games themselves. At GameStop, we’re accustomed to this kind of behavior, but we were shocked by one fan lineup we encountered when we opened up one of our stores in September of last year. The avid fans weren’t there for the latest role-playing game, the hottest first-person shooter, or a long-awaited real-time strategy game.
They’d come for our-brand new loyalty program.
The size of the lines of customers waiting to be the first to sign up for our September launch of PowerUp Rewards (without any advance advertising) was astounding, and the continuing response has significantly exceeded our expectations—and our expectations were fairly aggressive. By the beginning of 2011, after the launch had rolled out to all our stores by mid-October, we exceeded six million members, many of whom have chosen a more benefits-packed $14.99 annual membership called PowerUp Rewards Pro. We’re also getting quite a bit of positive qualitative feedback from customers and our field teams, another key metric for evaluating our program’s success.
PowerUp Rewards in some senses employs the same game design principles as the games we sell. Player actions lead to a succession of rewards, perks, and bragging rights. Players track their progress, and work toward victory. It’s not a competition, per se, but it combines the passion of achievement with fun.
Achieving this level of success, of course, is never as easy as it looks. GameStop has grown from a regional specialty player to the number-one national brand in our space. Like all companies, we have faced a number of challenges—and the new rewards program was a key element in our strategy for overcoming them. Among our goals:
- Increase our share of wallet by increasing purchase frequency and by shifting purchase behavior to higher-margin products. In a nutshell, our goal was simple: If we could shift just one title per year away from our competition in just one of our consumer segments, we would add a big number to the top line. We also wanted to increase frequency of trade-ins. We’re fortunate to have a robust used-game model, in which we take games in trade for cash or for store credit that then can be spent on new games. We call it the “Circle of Life.”
- Collect data on our customers and then use it effectively. Like many retailers, we hadn’t done enough to get to know our customers and offer relevant communications. Though our customers love coming to our stores, we lacked the systems to gather meaningful information about those customers—who they are and what games they like to play—so we could talk to them specifically about those elements in-store and through other channels.
- Increase customer focus. We simply weren’t as customer-centric as we needed to be, which was particularly frustrating because our audience is very, very vocal. They want to be asked their opinion. In our space, if you don’t engage your customers—and engage them through a channel you maintain—they will post on other sites and blogs, and you may not like what you hear.
Original document from Colloquy.