Extending the Value of Core Brands

Lotteries are always improving their instant ticket strategies to meet new customer demands and increase returns to good causes. In fiscal 2018, after tweaking their own approach to the category, the Atlantic Lottery Corporation (ALC) saw a year-over-year increase of 14.3% in instant sales, which resulted in a record year.

The success of the past year is first attributed to maintaining good fundamentals and learning from past mistakes. “We have a good cadence in the organization. We are launching monthly and are not launching too many tickets. It allows us to have a good variety of play styles and price points,” Merrill Fullerton, Marketing Manager, Instant Games, ALC, said.

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One of the larger drivers of growth came from extending core and key brands into higher price points. For example, one of the most popular brands, Set for Life, an annuity style game, had been particularly successful at the $4 price point. So ALC released a $20 version of the ticket along with WCLC. “I think there is a new segment of players that really like high price point tickets. But I also think our Set for Life players and draw players were attracted to that top prize,” Fullerton said.

While the $4 players might have been attracted to the larger prize, the new strategy didn’t cannibalize the $4 staple game. “It has performed above our expectations. We also saw our $4 Set for Life grow.”

ALC frequently supports Set for Life with advertising, which explains in part its popularity. Advertising has been particularly effective for this brand. “Set for Life has been growing exponentially. Six years ago, it was $15 million in sales and now it’s over $30 million in sales,” Fullerton said.

There were other concerns of cannibalization horizontally at the $20 price point. The Canadian lottery market is well known for its multi-jurisdiction initiatives. ALC has three to four Interprovincial Lottery Corporation (ILC) tickets on the market that range between $10 to $30. “We were concerned about cannibalization of the $20 spotlight games. Those are huge drivers for ALC sales as well. But it didn’t cannibalize. I think it is due to the difference in the nature of the prize,” Fullerton said.

ALC’s large increase in instant sales was certainly the result of other factors as well. ALC also released a $30 Crossword price point that has been very successful. Another factor was a prize payout increase, which targeted lower price point games. The blended payout increased from 64.5% to 67%. But this change occurred midway through the fiscal year so it is difficult to know exactly how big of an effect this had on sales.

“We were trying to better align the value to the price point. I felt like we weren’t rewarding (new players) enough with that payout to make the decision to enter our category,” Fullerton said.

The continuation of effective strategies implemented in previous years also played a large role in the record year. ALC has created instant tickets of their national draw games 6/49 and Lotto Max, both of which excelled at the $5 price point. The Lotto Max ticket was the second best $5 ticket ever.

For ALC, copying the successes of FY18 will be the foundation for hopefully another strong year in FY19. However, for another record year, it is imperative that new strategies are explored. “We are launching our first-ever $50 price point in October 2018. This game, called Classic Celebration, combines seven traditional $10 format games into one package, delivering $70 in play value. It has both high payout and strong odds of winning. Insights gleaned from recent player research were used in the design of Classic Celebration and the product is also great for gifting. We’re expecting it to deliver on several purchase opportunities and will be a major driver behind our projected sales growth this year,” Fullerton ended.