Category Archives: Increase Revenue

What’s on the horizon for Raffles/Lotteries?

Excerpt from the December 2015/January 2016 Fundraising & Philanthropy Magazine

RAFFLES/LOTTERIES

Steven Banks
Managing Director
Aspire Non Profit Consulting

How has the area of raffle/lottery fundraising performed over the last 12-18 months? 

Prize-led fundraising has continued to be a resilient avenue of unfettered funds, with some programs achieving 10%-30% increases in active data. Programs that adequately cover fixed costs, including prizes, are able to regulate the level of investment in reactivating and acquiring supporters. We find that programs can then be fine-tuned for either growth or maintenance.

Typically the larger Art Unions in Australia are optimising their long-term returns by systematically investing in acquisition and importantly converting their irregular supporters to monthly contributors.

Programs that traditionally rely on one sales channel, e.g. telemarketing or mail, are finding the market tougher, especially with the tactic of asking supporters to on-sell books of tickets.

Premium lotteries ($100 ticket – multiple major prizes) have continued their foothold in the southern and western states. These media-driven programs are expanding the range of games on offer and evolving into large database-marketing lotteries.

In summary, larger multi-channel programs appear to be growing whilst a number of smaller to mid-size programs are reviewing their game and marketing strategies.

How do you think the area of raffle/lottery fundraising will perform over the coming 12-18 months? 

I expect overall revenues will continue to grow nationwide, with more advances in multi state and territory activity (despite regulatory hurdles) and broadening of sales channels to suit supporter preferences and acquisition.

New entrants will continue to look for market niches, in terms of offer, frequency and loyalty incentives. Existing programs that lack investment or reinvestment of funds may decline, due to a combination of declining supporter numbers and increasing numbers of well-organised competitors.

Telemarketing will continue to be a strong performer, particularly with a KPI focus on quality conversations and sales closing ability.

Attention to backend systems and processes will be critical to maximising returns, particularly with 1) a range of payment options via call centre, field sales, website and mail room, 2) complaints and enquiry handling and 3) data hygiene.

What is your ‘bold prediction’ for raffle/lottery fundraising in 2016?

I would like to see some charities merge their efforts and build partnerships in prize-led fundraising (to provide scale and efficiencies). However, my bold prediction is that more fundraising leaders will seek to broaden their fundraising mix – by implementing prize-led approaches to existing databases and to acquire new supporters.

Lottery databases can be a significant source of regular givers, mid-size contributors and bequestors.


How not for profit organisations can win with lotteries

Category : Increase Revenue

Lotteries, raffles, art unions – whatever name you give them, they are all games of chance. Applying these programs to a not for profit organisation creates incentivised giving, which can become a very powerful tool to acquire and retain supporters.

The not for profit sector in Australia is a crowded and competitive marketplace. Pro bono Australia recorded over 600,000 organisations that make up the sector (www.probonoaustralia.com.au, 2014). And, with a current population of 23,343,640 (www.abs.gov.au, January 2014) – that means there is one NFP organisation to every 38 people in Australia.

When key not for profit executives were asked what they perceived as the greatest challenge for their organisation, the number one issue identified was ‘finding new sources of sustainable funding’(McLean Delmo, February 2012).

Demand for the charity dollar is high. The global financial crisis, or threat of it, has meant the majority of consumers are much more aware of where their money is going. Local charity, International crisis, natural disasters, the list of legitimate causes is large and competitive. So, how can a lottery program help your organisation win?

A well-executed lottery or raffle program will provide three key benefits:

  1. Diversity
  2. Sustainability
  3. Revenue

A lottery is an incredibly diverse vehicle, which can be adapted to all channels within the marketing mix.

Promotion of the lottery through direct mail is the most common channel to a warm supporter base. Telemarketing has been used effectively for years by charities of all sizes, however, can be costly for acquisition if an incorrect strategy is adopted. To avoid blowing the budget on acquisition, promote regular buying of lottery tickets by automatic payment so conversions have a higher response value.

The flexible lottery program can be promoted at events of any size or calibre and of course digital channels are ripe with opportunity through a website (with ticket purchase function), emails, social media, search marketing etc.

The lottery may also provide a valuable PR tool through promoting the prize (if it is newsworthy) the draw and the winner/s.

There is a growing demand for transparency of fundraising activities, which leads to a challenge for charities to find creative ways to raise untied funds. Lottery offers the solution through its incentivised giving nature.

Supporters of the lottery are instantly rewarded with the chance to win. This makes lottery a valuable acquisition tool, and exposes the opportunity to acquire donors that would not necessarily support your organisation. The chance to win creates a tempting buzz of excitement and taps into the ‘what if’ optimist that exists within all of us.

Of course, once lottery supporters have purchased and are added to your database, they can be approached to support the organisation in other appeals. The key with cross selling from raffle is to segment and test, test, test! You don’t want to lose the repeat lottery supporter by bombarding them with other messages if they are not interested.

If a lottery program is executed correctly, with a carefully measured balance of warm and cold contacts, a strategic marketing strategy and a smart prize mix, it will return positive financial results and increased brand awareness.

There is no doubt that not for profit organisations in Australia need to adopt long-term strategies to remain competitive. With its diversity and mathematical predictability, Lottery can deliver a winning formula.