Overview of FY Business Plan. Presentation to California State Lottery Commission April 25, 2013

Transcription

1 Overview of FY Business Plan Presentation to California State Lottery Commission April 25, 2013

2 Overall Goal for FY Deliver record profits to public education Surpassing last year s all-time high of $1.32 billion Will be 14 th consecutive year of providing more than $1B

3 Key Initiatives in FY Plan Supporting the Four Themes from the Strategic Directions that will drive sales and profits: Products Players Retailers Infrastructure Tactical elements around the 10 Goals

4 Products: Continue Improvements in Scratchers Category Greater variety and More Facings for $5 & $10 Games to meet Player Demand

5 Products: Launch $20 Scratchers Game Follows Industry Best Practices Just 4 of 43 jurisdictions don t have a $20 game: CA, LA, OK and SC Sales Analysis of Large States launching $20 Game grew Instant Ticket Category by 12% After 2 quarters of $20 game introduction Incremental sales in CA estimated at $175 million for the partial year in FY Consumer Research conducted to test Concepts

6 Products: Optimize Draw Game Portfolio MEGA Millions likely in need of refinements Powerball modified to $2 game in early 2012 Florida begins selling in May 15, 2013 Working with consortium of MM States Super LOTTO Plus Enhancements also needed Despite sales declines, SLP still strong in Industry Understand player perceptions; test enhancements then possible implementation by June, 2014 R & D for Other Game Modifications and/or New Draw Games

7 Players: Goal of Growing Playership Playership levels have been stable recently but are lower than it was ten years ago. In FY , programs to ensure player retention and lay foundation to bring back lapsed players and generate trial among non-players

8 Player Loyalty Programs for FY For existing players but also to gain re-trial among former players Enhancements to 2 nd Chance Program Improvements in the User-experience Add Super LOTTO Plus 2 nd Chance element Begin development of a Player Rewards Program Currently in Procurement Process

9 Address Perceptions Impacting Play About one-third of Californians hold neutral opinions about the Lottery Consumers identified some areas to be addressed: Uncertainty about where the profits go Not knowing anyone or hearing about people who won Perception of types of stores where tickets are sold and type of people who buy tickets - particularly Scratchers In FY , developing tactics to generate better awareness and improve perceptions

10 Advertising Support Continue support of Scratchers and Big Jackpots through most efficient media vehicles Also need to support new Powerball game Build a strong and unique Brand Image Increase media dollars to Digital Advertising Based on Econometric Model results Begin developing an overarching message for the Lottery

11 Responsible Gaming With planned initiatives, there is a corresponding need to further promote Responsible Gaming Enhanced Training: Retailers & Lottery employees Additional internal programs to make it part of everyday operations and to demonstrate continuous improvement Seek World Lottery Association (WLA) Level 4 Certification Become the only state to achieve this level

12 Retailers: Expand Network For FY , expand number and broaden the mix of retailers: 1200 Retailers for Scratchers & Draw Games 450 Social Venue Retailers for Hot Spot Need new types of retail locations even for selling Traditional products Or, find new ways of selling tickets in traditional retailers

13 Optimize Support Provided to Retailers To handle growing network, need to make servicing current locations more efficient. More effective Supply Chain to get needed ticket inventory to retailers Complete rollout of new Ticket Return Process Other enhancements throughout the year Retailer Risk Management Monitor financial risk over entire retailer life cycle Would help minimize loss of existing locations

14 Optimize Support Provided to Retailers (Continued) Sales Call and Visitation of Accounts Checklist for a call based on sales volume Begin development of a new Customer Relationship Management (CRM) Tool for use by sales force Formation of Route Sales Unit How to Service Lower volume accounts Monthly New Product Information sent w/ Tickets Expand Scratchers Inventory Mgmt. Center (SIMC) Determine new functionality to enhance Retailer Website Develop Menu of Retail Promotions

15 Retailer Incentive to Gain More Visibility for Scratchers Games Tickets seen through the glass only when you are at counter Can t see Scratchers while in line Tickets more impactful; Now, visible while shopping in store

16 Infrastructure: Build Capacity and Create Efficiencies Enterprise Resource Planning (ERP) Manual processes mean less timely information Begin ERP Feasibility Study after Epicor Upgrade completed and time to understand new functionality Interim steps w/ Expense Claims and some HR functions Complete Contact Center Enhancements Develop Plan to replace Legacy systems Assess how we can comply w/ WLA Security Control Standards Goal to be first in U.S. to gain certification

17 Infrastructure: Developing Long-Term, Shared Vision Instill Collaboration as part of Lottery culture Cross-training of staff Enterprise Project Portfolio Management Software Enterprise-wide Risk Management Program Develop IT Strategic Plan Develop Facilities Master Plan

18 Next Steps FY Business Plan will be on the agenda at the May Commission Meeting along with the Strategic Directions For further discussion and a Vote Overview of FY Budget to be presented in May and on the agenda for a vote at the June Commission meeting