One size doesn’t fit all

I have written this text for http://www.lotterydaily.com, and Conor Porter has partly edited it.

I’m sure you know the t-shirts sold in tourist stores, the size of which is stated as “one size fits all”? I’ve always wondered how stupid people are when they buy shirts that don’t look good on anyone. Similar examples of selling the same product can be seen in all industries. The selling company focuses on lowering the cost level and seeks large economies of scale by keeping production in one or a few products. However, such a business strategy can only produce bulk products that are not of great importance to customers.

I have written several times in my previous columns about how important it is to understand customer needs. With the data collected from customers, companies can offer even better products and services which, in turn, increase business profits. When successful, customized products are an actual win-win situation where the company receives more revenue, but at the same time, customer satisfaction increases.

Lotteries, especially in the field of lottery games, sell their products to such a large number of customers that, at least in theory, one product fits all thinking might even work. Such a product suitable for everyone should be developed with the average customer in mind. If the customer base is large enough, then the average product may be of interest to a sufficiently large customer group. A lotto game focusing on the jackpot could be such a product, for example. The smaller and more heterogeneous the customer base, the more difficult it is to develop a single product that suits everyone.

However, the actual topic of this column is not the products and services that lotteries offer to their customers. Instead, I would like to highlight the challenges of action between gaming technology suppliers and gambling operators. Based on my previous experience with lotteries and now through additional information obtained through consulting, I argue that some kind of “interpreters” would be needed between operators and technology companies to understand each other better. It may be that there should be similar “interpreters” within gambling companies between business and technology people.

I admit that I see the situation perhaps too much through the eyes of the lottery. In any case, it seems that a large percentage of gaming technology companies are looking to sell the same product and the same technology solutions to all gambling operators. Like in the B2C business, customers are different in the B2B business; clients are different and have specific businesses. The understanding seems to be enough for casino companies, betting companies, and lotteries to belong to different series. Instead, it seems surprisingly difficult to understand that lotteries are a completely heterogeneous group of companies. Sure, some lotteries resemble each other more than others, but a business-oriented, stock-listed lottery needs something other than a lottery like a state office.

I’ve talked a lot about the need for lotteries to develop their digital business and, on the other hand, the need to add new product verticals. As such, an excellent digital platform may be too complicated for a company starting a digital gambling business, while the same solution may be far too simple for a lottery that has been running digital operations for years. Technology companies should understand the levels at which different gambling operators are in different areas. Based on this understanding, it could be easier to tailor individual solutions to companies. The situation is thus quite similar to B2C, where the aim is to offer players personalized products and services. In reality, those products are not made individually for each customer, but the goal is to create a feeling for the customer that this is just for me.

Take, for example, the product area of betting. A technology supplier seeking to sell its betting solution to lotteries must understand at least the legal situation in that target country, the current state and strategic importance of sports games in the entire operation of the lottery, and the technology architecture of the gambling company. The legislation affects many issues and may impose specific requirements that make basic solutions impossible in that country. The needs of sports games are different for start-up companies than for a company operating in this product area for a long time. It is also possible that some lotteries just want to offer sports games to serve their customers, while other lotteries strive to make the maximum profit out of sports games as well.

For a lottery that wants to add betting to its product portfolio but still intends to focus on running lottery games, the full-service solution is perfect. The technology must meet the requirements of the country’s legislation, but it does not have to have any specific business specialties. The reliability of technology is a crucial element. In addition to the basic technology, there is also a need for ready-made odds, usually obtained from large companies focused on them through a revenue share agreement. Selling such a total ready-made package to large lottery companies running sports games, on the other hand, is entirely pointless. Many lotteries operate in sports games in the license-based market, where they compete openly against other operators. In a situation like this, you can only succeed by doing things differently, better than your competitors. That requires tailored services and also, at least in some sports, different odds from other companies.

Understanding IT architecture is an exciting area. Traditionally, lotteries have purchased their technology solutions from a single supplier. Lottery technology solutions have been based on a model where the central gaming system has been at the heart of it all. However, the situation has changed, at least for more advanced lotteries. The companies source the best solutions for different areas from different technology suppliers. Therefore, system integrability is of great importance to such companies. Instead, traditionally operating lotteries still want to buy all the technology from one supplier. It goes without saying that it is not worth trying to sell the same solutions to such lotteries.

As more and more lottery companies have switched to a multi-vendor model, technology companies have also changed their operating methods. However, I believe that suppliers still have a lot of opportunities to improve their service if they better understand the situation and needs of their customers. As I said above, the result of such action is, at best, a win-win situation where the technology company gets more sales, and the lottery is even more satisfied. In fact, there is still a third win in this model, as lottery players are also likely to be happier than they are today with better products.

Personalization makes everyone happy

I have written this text for the Lottery Daily, and Conor Porter has partly modified it.

Personalization is a rising trend in the digital business. The first personalized services were built up already some 20 years ago, and a breakthrough was a matter of time. It took much more time than expected, but finally, personalization did it. The importance of personalization is here to stay, and it’s increasing rapidly in all businesses for the moment.

As competition between companies gets tougher, personalization provides an opportunity to stand out from the rest. In most businesses, those companies that stand out somehow from the others succeed. In the gambling and lottery business, personalization is the perfect tool to do things differently than other companies.

Although the first attempts with personalization were made a couple of decades ago, those were not successful. The number of contents and services was not at the level where a real personalized customer experience could be offered. There were maybe just a few possible outcomes, and that didn’t fulfill the needs of customers.

During the last 20 years, the amount of content and different possible services has exploded, and a real personalized customer experience can be offered. The critical point to make it happen has been the rapid development of AI solutions.

Using AI makes it possible to find the best-estimated contents and offerings to known customers. AI is an excellent tool because it can learn from its own mistakes and improve the given customer experience step by step.

Many lotteries and gambling companies have written their strategies to offer the best customer experience in the market. If this means that every customer has the same services offered in the same way for all, the result can’t be the best customer experience in the market. The same thing can’t work with different kinds of customers.

To offer the markets’ best customer experience, the lottery has to personalize its services to customers and create a unique feeling for the customers. Personalization means something that makes the difference between bulk and luxurious customer experiences.

While the lottery’s basic products are very bulk overall, the offering should not be like that at all. There can be a massive difference in how you offer products and what additional features and services are available. You do not have to sell the same product to all customers.

Personalization is an essential part of an excellent customer experience. The lottery must have a 360 degrees view of its customers to serve them as well as possible.

One way to do it is continuous experience throughout the customer journey. A useful 5A model has been developed to describe customer journey in practice: Awareness, Acquisition, Adoption, Assimilation,and Advocacy.

In every step, customer experience must be good enough to take the next step. There are no better customers in modern business than those who recommend using the company’s product and services to friends. This kind of customer is reachable only after a successful customer journey.

The first step of the customer journey is Awareness. In this phase, a person is identified as a potential customer for the company. Most people search for as much information as possible about available products and services. That information should be available and present to the prospect in the way the customer wants to get it.

The second step is the Acquisition. The prospective customer has become closer to the company and actively considers starting to buy products or services. The company is responsible for supporting the prospect’s thinking and turning him to make the first buy.

The third step is Adoption. The customer has started to buy products or services and gains immediate success and value. At this stage, there are plenty of opportunities for the company to make the patron’s experience so unique that they will continue their journey to the next level.

The fourth step is Assimilation. The customer starts to buy products and services frequently. They may add several products and services to their repertory and begin to feel that the use of products and services is like his second nature. The consumer doesn’t even think to stop using the company’s products and services anymore.

The last step is Advocacy. In this phase, the customer is so committed to the company that they recommend it to friends and followers on social media.

The best lotteries are already doing personalization, and the results have been good. Personalization depends pretty much on the data available. Unsurprisingly, in a data-driven business, excellent companies have also made the best use of personalization and enabled a reasonable customer journey into deeper customer relationships.

However, lotteries can’t focus only on the very business-oriented 5A model described above due to their specific business. Lotteries must take into account the maintenance and promotion of responsible gaming. At its best, responsibility creates a framework within which lotteries can then offer their customers personalized service.

In theory, companies can offer a fully personalized service to each of their customers. However, I’m not entirely convinced that this is worth doing in the lottery business, where the number of patrons is enormous.

Instead, lotteries should initially focus on identifying different customer groups within which the motives for gambling and interests are sufficiently similar. These customer groups can then be offered a differentiated service to increase sales. Clear, measurable targets need to be set for customer groups monitored based on continually accumulating data. Procedures and content must be continuously changed based on available sales and customer data.

It is also important to understand that people move between different customer groups. Policies must therefore be flexible, adaptable, and cost-effective. At its best, personalization brings joy to both the lottery and its consumers in particular.

Lotteries must concentrate on customer experience management

I have written this text for www.LotteryDaily.com and it is partly modified by Conor Porter.

Customer experience management has been an increasing trend among companies in the consumer business. Modern business companies focus on producing and developing the customer experience. The lottery business needs to recognize itself as a part of the gambling and even entertainment business, where they face heavy competition despite the nominal monopoly.

Excellent customer experience should help lottery to stand out from its competitors. I think there are still lotteries that do not feel involved in a competitive market. These companies certainly do not improve the customer experience, at least not to achieve a better business result. However, managing the customer experience also helps increase operational responsibility, which all lotteries should strive for.

Customers are different. That is why we shouldn’t show everyone the same content.

Personal content requires automation. Improving the transaction experience requires responding to an individual customer’s need: digital store and messaging should strive to show the customer the content he is likely to be looking for. Manually targeting customer-specific content (product, service, or benefit) is impossible. It is ineffective by human-made rules and quickly becomes uncontrollably complex. We should target content with learning automation.

Companies need a different kind of information and understanding about customers at strategy and operational levels. In the past, companies used the same socio-economic customer data at all levels, and therefore the results were not particularly good. Of course, that model proved better than working without any customer information.

Anyhow, now the situation is much better. Tools like segmentation, customer lifetime value, and RFM-models are used to improve customer experience, or at least to measure results from actions targeted to improve customer experience.

We have identified three key things that need to be in good shape to improve the customer experience. Lotteries need to know their customers, have the capability to measure results from actions, and test a lot of different ideas. Those ideas with positive impact should continue, and you could throw the rest away.

The key is to understand that the customer experience depends on many different things and improvement is only possible step by step. Progress is made by making better solutions for customers one thing at a time.

The digital sale of advanced lotteries includes at least analytically driven digital marketing, customer communication, game and service targeting, and service design. The model focuses on creating an efficient and measurable approach to develop overall customer relationships through shared data, personalization, and automation.

Machine learning guides what should be offered to the customer next. It would help if you used a learning algorithm that organizes digital channels’ search functions to find the customer’s most interesting content. When a customer finds content that interests him, the customer experience improves, and loyalty increases. The web pages and mobile applications layouts are based on a modular structure, supporting continuous content optimization for a single customer.

Digital marketing is a modern way to do marketing, but you should have marketing permission in some areas. The push message is suitable for gambling through applications, which has a fast response time and serves as a ‘last-minute’ reminder when the content needs to be specific and short.

Automated triggers and manual marketing campaigns, based on marketing permissions, are useful tools. Customer communication is targeted based on customer’s gambling behavior: e.g. games played, games last played, channel, responsible gaming aspects/risk players, and geographical elements. The other methods are permission and order-based communication. Order based service messages are messages which customers can decide to receive.

A broad and competitive product range is the lifeblood of success because it cannot differ significantly from what the other operators have. Customer experience is, thus, the most important means of differentiation.

The level of ambition of the digital transaction experience should contain world-class usability in online and mobile service, the cross-channel and innovative game and service offering, the most personalized data-driven holistic transaction experience, and the best gaming management tools.

The loyalty program is an essential part of the lottery’s business strategy. It can be used to emphasize the importance of customer relationships and improve customer engagement with the lottery. Loyalty programs could also increase responsible identified playing. It should be available for the points of sale network too. Typical ways to use it are website or by mobile phone and tablet device and also physical card.

Lotteries should offer a good customer experience and high consumer protection. Restrictions and tools proposed must not compromise the customer experience. Restrictions, blocking, and management services should be a natural and easy part of gambling.

Restrictions should not lead to a customer experience where the customer feels that he is facing too much patronage, but to a situation where the customer is facing excellent and caring customer service. The customer must be informed of the game restrictions so clearly that he understands what he is restricting and what conditions he will face.

Critics think that lotteries should not use customer information and tools to improve the customer experience and, thus, business performance. They believe that such activity will cause gambling problems automatically.

However, I think a lottery’s role is to channel customer’s gaming into their offerings. Society should impose general restrictions on the operation of lotteries, within which companies can then strive to provide a safe and optimal customer experience. Seeking business results should not automatically mean increasing gambling problems.

Customer experience will be one of the most developing areas in the future. Lotteries need to understand that customers want a personal customer experience that follows them no matter what sales channels they use. Of course, understanding alone is not enough; lotteries need to provide players with such a customer experience.