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Gardner Gurney Interview

continued from page 22

of all the costs, including the underlying

costs of retraining sales representatives

and retailers to sell a new product.

For example, moving from a 4-week

cycle to a 6-week cycle for our Instants was

a huge decision because it required our re-

tailers to adjust to a whole new schedule.

Changes like this are undertaken with full

awareness of the costs involved, both hard

costs and opportunity costs. The NY Lot-

tery is not a small enterprise. Even small

changes can involve a significant alloca-

tion of time and resources. We

do run pilots and tests to make

sure we have a clear picture of

how people will respond, and

hopefully avoid surprises—well

at least bad surprises!

With the record-setting jackpot,

and the residual downstream ben-

efit of that—what did you do to

try to leverage the publicity and

the excitement and add value to

your overall brand and the other

products in the portfolio?

G. Gurney:

We saw some lift

in basically all products during

the Powerball roll-up. There’s no

doubt that much of that lift is di-

rectly attributable to the record

Powerball jackpot in January of

this year. Of course, we wish we had been

more prepared to take even more advantage

of the increased brand awareness that the

record jackpot generated. We are working

on lots of exciting things right now, includ-

ing broadening our second chance offers

into all product lines. I sort of kick myself

on a daily basis for not having that in place

last January for the jackpot run. That re-

cord run brought in entirely new consumer

groups who had never played the lottery

before. We didn’t have the mechanisms to

follow up and reinforce the positive impact

of that exciting event, at least not as much

as we would have liked. We still enjoyed

fabulous residual impact from it, but wish

it could have been leveraged to even extend

the interaction with new players and addi-

tional brand-building benefit.

About the sustainability of the jackpot games

… How do we overcome rising consumer

expectations and leverage the positive public-

ity that only comes intermittently with a big

jackpot, into a longer-term strategy of main-

taining positive growth in the jackpot-driven

draw games?

G. Gurney:

We need to take full ad-

vantage of the media and promotional op-

portunities to hold on to new players and

reinforce the positive impact on existing

players that the big jackpots provide. We

need to capture that new player info in the

form of player registrations so that we can

develop a relationship and communicate

with them going forward.

Included in much of our communica-

tions is the support the NY Lottery gives

to public school education. Whenever we

have the attention of our audience, we like

to reinforce the true mission of the lottery

and hopefully impart to them the positive

feeling of being a part of a worthy cause.

The media is always highly focused on

sales during the big jackpot roll. But we

also like to reinforce the role that Lottery

has in generating support and commis-

sions to small businesses, and the residual

sales that accrue to Lottery retailers from

consumers buying other CPG’s along with

their lottery tickets.

Also, we need to recognize that the vast

majority of people who were introduced to

the game did not win cash despite having

the experience of anticipation and dream-

ing for a few days. We need to provide

them a second chance to play and find ways

to help them have fun and feel good about

playing the lottery. It is also a chance to in-

troduce them to other games that give the

player a much higher chance of winning a

small amount. That’s a very important part

of our promotional agenda. The Lottery is

not just about the jackpot game.

Even though you do not sell lottery

products online except in subscrip-

tions, the NY Lottery has had tre-

mendous success with its Mobile app.

G. Gurney:

We had over

98,000 active unique users of

our Mobile app here in New

York over a five week period. And

recently, we had over 560,000

sessions where people took a

moment to check their winning

numbers app, and see what we

were up to and whether they had

a winning ticket. That is a seri-

ously large number of contacts

with players. Visitors are with us

an average of a minute and a half.

The most solid stat is that over

50% of visitors are coming just to look at

the winning numbers to see if they have a

winner. With our Keno game QuickDraw,

players are using it to check winning num-

bers and watch the current drawing. Clear-

ly, many of our Quick Draw players are

watching the drawing on their smartphone

rather than the monitor, perhaps because

they bought their ticket and then left the

POS before the draw took place.

We just introduced a digital newsletter

that delivered to over 400,000 emails in

one day. We had a very strong open rate

of those emails and one of the things that

we touted was the fact that we have web-

based subscriptions. No discount offer, just

a “Hey! Did you happen to know that we

have this subscription site?” We saw very

substantial increases in web-based purchas-

Decisions about how to evolve

the portfolio of products

rarely focus on the

performance of a single

product, or even a single group

of products. In fact,

the discussions typically

involve a diverse range of

opinions because they almost

always involve an element of

strategic planning.