From the Corner Office: GameStop Nation

UPDATED: August 31, 2009
PUBLISHED: August 31, 2009

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

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

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."