Insights From GameStop’s Growth Story

When you stop seeing transactions and start seeing customers, organizational transformation that leads to business growth happens.

This has been the case for GameStop, according to Mike Hogan, GameStop’s CMO, who discussed how GameStop has used consumer insights to drive growth at the recent Corporate Researcher Conference in Dallas organized by the Marketing Research Association.

According to Hogan, GameStop knew about its customers in statistical terms based on the number of hours they spent playing games, missing important segments based on variables such as dollar amounts spent on games. Like many organizations, GameStop was not investing in customer insights.

It is easy for organizations to adopt certain key performance metrics based on readily available transactional data, but it requires an appreciation for customer insights to question the underlying assumptions and explore new metrics that may end up being more relevant. GameStop assumed that customers who played the most hours also spent the most money on games, which turned out to be wrong.

No single source of data gives a complete picture of your customers. Transactional data tell us what customers do, but it is not always clear why they do what they do. Data from primary research can provide insights into the whys, but sometimes can be inaccurate regarding behavior since many situational factors influence purchase decisions in ways that can’t always be captured with traditional research methods. Companies will benefit from combining different data sources.

By questioning assumptions and analyzing customer data from different angles, you can see customers in a new light, find what motivates them, understand how they can be segmented in ways you haven’t thought about, and ultimately develop products and services that meet their needs, resulting in growth for your company.

In 2000, GameStop was a regional player with fewer than 1,000 stores and less than $1 billion dollars in revenue. Today it is the world’s largest retailer of new and pre-owned video games with more than 6,000 stores worldwide and more than $10 billion in revenue. As you can see, it pays off to invest in customer insights, so get in the game.

As published on October 26, 2012 by the Dallas Business Journal