About a year ago, a few hundred GameStop managers were surprised to receive calls from a man identifying himself as the video game retailer's new COO inviting them to a get-acquainted meeting. Paul Raines wanted to introduce himself and start establishing lines of communication with them, but the response to his calls wasn't entirely what he expected. "A couple of guys hung up and said 'very funny,'" Raines recalls.
They didn't believe the person in charge of operations for an international corporation with more than 6,200 stores worldwide would take the time to call them personally. But the personal contact and subsequent meeting were a success nonetheless.
"The customer is and always will be the driver of your business."
Building relationships all the way from the corporate office down to customers has been critical for GameStop, which claims to be the world's largest video game and entertainment software retailer. GameStop posted revenue of $8.8 billion in 2008, up from $7.1 billion the previous year. Customer ideas and feedback are considered extremely valuable, helping inform the company's strategy and drive its success. And customer service is the distinction between GameStop's stores and the big-box retailers, Raines says. Otherwise, if the shopping experience were going to be the same, he says, "I should buy my video games where I buy my groceries."
Instead, GameStop places a high priority on hiring knowledgeable sales associates and providing them with extensive training so they can engage with customers to determine their gaming likes and dislikes. For instance, even if you only have a partial description of a game, like "the one with Mario," a GameStop associate will be able to locate the game for you. Before you make the purchase, the associate will also help make sure you'll enjoy the game because he or she has played it.
GameStop's success is built on the concept of specialty boutiques, each of them roughly 1,500 square feet, selling both new and used games and allowing customers to trade in used games for credit toward new ones. Each store is treated individually, with promotions and advertising tailored for each store's unique customer base. Some stores may have more people shopping for games to play with their families, some may have more seeking fitness games, and some may have more gamers seeking action-adventure games.
In addition to its stores in the United States and more than a dozen other countries, GameStop also operates a Web site where customers can pre-order games, as well as the Game Informer publication offering tips and game reviews to more than 2 million paid subscribers.
Providing excellent customer service starts with making smart hiring decisions. "One of the most important decisions you make is who you actually bring into the business," Raines says. "Do they have the interest? Do they have the skills? Do they have long-range potential?"
Extensive training is geared not only toward providing the best service for customers, but also to helping employees reach their potential with the company.With more than 1,000 stores opening under the GameStop name last year and 400 scheduled to open this year, there's plenty of room for advancement. Hundreds of associates have worked their way up to district manager positions, officials say.
Raines says empowering and engaging employees is one of the most important keys to success. Even if you have a limited budget for advertising, for instance, he recommends spending it on your employees. "Give away a T-shirt in a sales contest or take an employee to lunch once a month for a job well done."
In addition to gathering feedback from the store level, Raines says it's important to provide information to store managers, such as the strength of sales for individual game titles, so they can exercise their own entrepreneurial skills and be most effective in running their stores. "This helps associates understand their customers' purchasing habits, but also allows store managers to see the fruits of their success around the promotions that they help execute in their own stores," he says.
GameStop's efforts to ensure a great customer experience don't stop in the store. The company seeks to make sure used game quality is as important as new game quality. Games and consoles undergo thorough testing and are repaired if needed.
"The fundamental truth is that the customer is, and always will be, the driver of your business," Raines says. "Lots of businesses go astray when they lose sight of the customer."
Raines learned his lessons in business management early on. His father, a district manager for 7-Eleven, would come home from conferences talking glowingly about the company's leaders, he recalls. His mother, who was from modest means in Costa Rica, taught him to be grateful for what they had, and that everyone has dignity and a role to play—lessons Raines later exercised in his work, treating customers and employees with respect and valuing their opinions.
In his own career, working at companies including L.L. Bean and later Home Depot, where he ultimately served as executive vice president for U.S. stores, Raines learned how customers can develop an emotional connection to a brand. From Home Depot co-founder Bernie Marcus, he learned, "You can change one employee and one store at a time. You can build trust in a corporation."
Indeed, Raines studies everything and everyone to better understand the customer, including his own children, who are customers. He plays games with his son and takes tips from his teenage daughter on music and other teenage girls' interests, too.
While GameStop's roots trace back decades before Paul Raines joined the team, he feels his role is to continue to build upon the entrepreneurial legacy. Every new store is built not by taking on debt, but out of operating cash flow.
He doesn't want to be judged solely on growth and profitability, but also by his stewardship to all team members. He thinks in terms of where GameStop will be in the next 10 years and how he can inspire trust from the employees who keep GameStop thriving through the loyalty they build with customers.
"People within your organization focus on what you do and say," he says. "Executives are incredible role models, visionaries."



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