That’s not hard math for a consumer to understand, nor an associate to communicate. If you maxed out your welcome gift, you essentially received a $55 free game for a $15 investment. It was very easy to see how you, the customer, would make your investment back very quickly and that it would almost surely pay for itself over the year. When we built the Pro tier on paper, we looked at the most profitable behaviors we wanted to reward and built the program to capitalize on that. It wasn’t like other paid programs in the space where, essentially, you’re funding your own discounts. McMillen: The great thing about Pro is that there was inherent value from the moment you signed up. Why do you think the PRO program has resonated so well, and how has it complemented GameStop’s non-premium loyalty offering? We came out of the gate sprinting! From a metrics perspective, we saw a jump in average ticket with more items in a single transaction, quicker return visits which we attributed to smart marketing, and a consolidation of share. Many programs go through a crawl/walk/run phase. So we started down the 1:1 path within 60 days. In the gaming world, Nintendo and PlayStation/Xbox are like the Sharks and the Jets … they shouldn’t cross paths. We also quickly started using the data to personalize communications and make them highly relevant. We finally had something to offer both the gamer community and the moms who bought games for their kids, a value proposition that was very evident. McMillen: The impact of PowerUp Rewards on our customer base and our employees, many of whom were some of our best customers, was felt immediately. How did the PowerUp Rewards program impact customer behavior and help transform some customers into brand advocates? Depending on who you talk to internally, some days I was a hero. With $150+mm in subscription revenue, I was not only funding my own program, but also offsetting the points liability as well. Our first year we had 10+ million customers say yes to the Pro version. McMillen: A paid version was attractive because it meant a constant revenue stream. What was attractive about offering the option for a premium loyalty program membership? Additionally, we offered a welcome gift that could well cover the cost of the $14.99 fee-a buy 2, get 1 free coupon for pre-owned games that was worth up to $55. The paid version had significantly more benefits in it, naturally, including point bonuses, trade-in bonuses, a standing 10% discount on pre-owned games and accessories, and a subscription to the print version of Game Informer. When we launched PowerUp Rewards nationally in 2010, we had both a free version and a paid version called PowerUp Rewards Pro-a nod to the gaming world-which was $14.99 annually. To go that big, we knew we’d want a free version, but we also knew a premium option with more benefits would have good reception too. Our marketing goal was to start collecting data on our customers that we could use to create personal and relevant communications, so we knew we wanted to get as many folks into our program as possible. When I started working on program concepts, I knew that we’d need to incorporate the pre-owned GWP into the final design since pre-owned product was the biggest source of margin. Pre-loyalty program, GameStop had a pre-owned game discount card that was offered which also included a subscription to Game Informer magazine, so essentially a GWP (Gift With Purchase). But with the video game space becoming more fragmented, the senior team felt that the time for a loyalty program had arrived. Many executives felt it wasn’t needed up to that point because the company had grown very successfully through acquisition and through sheer volume of sales. McMillen: GameStop started working on creating a loyalty program in early 2009. Here is our intriguing Q&A with McMillen:Ĭan you talk about the thought process behind GameStop launching its PowerUp Rewards loyalty program, when it launched, and including a premium loyalty aspect in it? We caught up with McMillen, who has since started her own company called Incendio, and talked to her about the creation of PowerUp Rewards, which currently has more than 50 million global members. The PowerUp Rewards program is a critical piece of GameStop’s overall customer-centric focus and helps create an “instant culture” for the company’s best and most loyal customers. With this goal in mind, GameStop officials hired Jenn McMillen, who not only became Division Vice President Loyalty and Customer Relationship Management, but also the Architect of the PowerUp Rewards premium loyalty program. In 2009 officials at GameStop, the world’s largest specialty retailer of primarily new and used video games, realized they needed to improve their use of customer data and decided to build a best-in-class loyalty program.
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