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Loyalty Limelight: My Lotto Rewards

Loyalty Limelight (light)-01The initiative: The Ohio Lottery’s My Lotto Rewards

In a nutshell: The Ohio Lottery is celebrating its 40th anniversary with the launch of a loyalty program, joining several other states – not to mention casinos – in offering consumers a chance to win points along with their jackpots. The program, My Lotto Rewards, is scheduled to launch Aug. 27. It joins at least a half-dozen other state lottery programs, including Michigan Lottery’s Player’s Club as well as programs in Kentucky, Arkansas, Missouri, North Carolina, Kentucky and Tennessee, according to a story in the Cleveland Plain Dealer. The Ohio Lottery, which sold its first games in August 1974, is the ninth-largest lottery program in the United States, offering instant and online games at 8,800 merchants.

Features: Customers can register for My Lotto Rewards online and earn points at registration, for purchases of both online and instant tickets, and on special events such as birthdays. Customers can redeem their points for prizes, sweepstakes entries, instant win games and other rewards including lottery-branded merchandise and personal electronics. In time, the Ohio Lottery hopes to offer gifts cards and possibly tickets to sporting events. The Ohio Lottery has set aside $3 million to bankroll reward prizes in its first year, according to the Plain Dealer coverage. It has earmarked a reported $700,000 to build and launch the program, which will include a mobile app.

The Takeaways: Lottery loyalty is an interesting, but challenging, proposition. At first blush, a marketer might not think lottery ticket buyers need an incentive other than the chance to win a large windfall. But there are lots of other options vying for those lottery dollars today, notably the casinos that have been spreading across the state of Ohio and the country. The incentives offered by My Lotto Rewards appear to be designed to keep consumers, particularly next-generation consumers, from straying to those other gambling sites. As such, the program’s operators will need to gain an up-close understanding of their customers across the state’s 88 counties. In that respect, the Ohio Lottery has some advantages:

• The lottery already manages a large online database of customers, according to the Plain Dealer story. The Ohio Lottery reported that as of August 2013, 135,000 people had signed up to participate in its contests and events. In addition, it said it attracts about 3,000 new users a month.

• About 30,000 people registered for e-mail messages from the Ohio Lottery and 4.3 million receive text messages. The loyalty program, with its app, should help to increase those numbers and enrich the data pool.

• Having relationships with almost 9,000 retailers, Ohio Lottery has the potential to create merchant partnerships, particularly with statewide chains that have the scale to align on the awards portfolio (points toward fuel, for example).

• Similarly, if the lottery forms partnerships with major sports teams, as it hopes to, it can gain added insights into consumer behavior in other areas, such as the concession stand. This knowledge can be used to create more tailored reward options to specific consumers. (“Congratulations! You’ve earned two hot dogs and a large soft drink at Progressive Field.”) In this way, The Ohio Lottery would be borrowing from the playbook of Caesars Entertainment, which launched its Total Rewards program as a way to track its gambling customers, but soon identified value opportunities among non-gamblers.

For the consumer, My Lotto Rewards offers some compensation when the big jackpot does not come through, since members will still be earning points toward future prizes. This sense of “cash back” offsets the investment in tickets and is well aligned with the aspirational quality of a sweepstakes game, at least for hard-core lottery players.

For those who are occasional players, the rewards will need to come fairly easily and with some regularity. They do not have to be big rewards – a free ticket for every 10 purchases might do it. It just has to be enough to keep the buyer motivated. I’d think a gamification feature, one that rewarded for social media interactions and word-of-mouth, would be a natural progression.

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