Today, UK National Lottery Operator Camelot have announced that they are doubling the price of a lottery ticket from £1 to £2 in order to ” “rejuvenate and re-energise” the Lotto game and increase the amount it contributes to good causes.”
This is a good causes fail, a brand fail, a PR fail and a marketing fail – and I predict that the National Lottery is going to fail completely within twenty four months.
At the moment, the National Lottery gives 28% of income to good causes and, apparently, this is set to continue under the new, doubled, ticket price and thus double the money to be given away.
So one could reasonably expect £3.32billion to be given to these local charities up and down the country.
Or can we?
I’d argue no.
As an occasional lottery player, I don’t mind splurging a quid on a ticket. You have to be in it to win it, right? Rarely I’ll have a flutter on the £2 EuroMillions. Just because I can.
But at a doubled ticket price for the UK National Lottery, I’m not going to be bothering so much.
I bet that I’m not alone.
I predict that casual users – not the hardcore devotees who wait with bated breath for the wrong numbers to be drawn every week – will back off, thus reducing the income that Camelot (the operator) receives.
So as income reduces, the value of that 28% tumbles as well and less – not more – money goes to those ‘good causes’ than you’d expect.
This move damages the Lottery brand as well.
I’m going to leave aside the argument that Richard Branson originally wanted to run the National Lottery as non-profit making, but the contract was given to Camelot instead (who make profit, thus can be taxed… You get the drift)
I can’t see that Camelot are doubling their infrastructure prices. How many more Lottery kiosks can they have in retail outlets up and down the land?
Are they going to be supplying gold plated tickets to the paying punters?
Of course not, that’ll be stupid.
Essentially, what Camelot are doing is doubling their income over their fixed (and probably unchanging) expenditure costs.
If we assume that this Guardian story from 2009 holds true today and that the percentages haven’t changed, the Government will make double the amount of money that it does currently in lottery tax and Camelot still stands to make double the money it does at the moment in profit – these are regardless of the financial value given to the aforementioned good causes.
OK so the bottom prize will go from £10 to £25, but the other prizes for matching more balls will be slashed, apparently (presumably to keep the prize fund percentage the same).
This sounds like a great money-making machine for the Coalition and for Camelot… But bad for the brand’s perception – especially if it keeps on yapping about raising ticket prices to increase the amount of money going to good causes.
This is a massive PR fail as well.
The Camelot Spokeswoman (notice – no real name; that’s a bad PR move for a start) said:
“Lotto has been in a state of steady decline at the moment and the overall contribution it makes to good causes is going down… We want to fix that and deliver significant extra money to good causes.” (SOURCE: ThirdSector.co.uk)
Yet, their Managing Director, Andy Duncan, said:
“Our players still love Lotto, but after 18 years they say they want more from it.” (SOURCE: Yahoo News)
So which is it, Camelot? Either your players still love Lotto, or they are abandoning it, leaving you in a steady state of decline.
Make your mind up – then brief your (named) PR rep appropriately.
This kind of conflicting information doesn’t do anything for your PR credibility.
And finally, the marketing fail.
According to the spokeswoman, the Lotto is in decline.
That means that something needs to be done to perk it up.
Given the current recession, I can’t see how doubling the entry price is going to do it.
The chance that you’ll even get the lowest price isn’t going to change (it’s 56:1 if you were wondering).
So you, the player – the paying customer – will be asked to pay double for something that you don’t have twice as much chance of winning.
It doesn’t stack up, at least in my view.
There is no actual added value. Unless you get three numbers (the upper tiers are reducing, so there’s no added value there, is there?). Which is quite unlikely really.
What Camelot SHOULD have done is work out what added value they could bring to their games, and get a real understanding of why the Lotto is in decline.
Only then would they have been able to provide a more appropriate sticking plaster over the wound…
I give them 24 months before we see the model failing… Maybe Richard Branson will be back in the game by then and run it as a genuine fundraiser for good causes, and not the corporate pocket…
Neil Hopkins is a Marketing and Branding Theorist at heart, and a Marketing Communications Manager by day. His blog – interacter – is the primary location he shares insight and information relating to marketing, branding and advertising strategy.
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