Petra von Strombeck about the pioneering spirit and innovative will of Lotto24 AG
BY CARMELA MELONE
(Published in The Produktkulturmagazin issue 4 2018)
Absolutely incredible: the overwhelming majority of lottery players still purchase lottery tickets at kiosks or convenience stores. And this despite the fact that the market potential for online lottery sales runs into the billions and the willingness among players to switch to online offerings is steadily growing. We talk to the Chair of the Board of Lotto24 AG, Petra von Strombeck, about this virtually untouched market, the pioneering role that the company is assuming and the blessings of money in general.
Ms von Strombeck, please describe the Lotto24 business model to us and explain why the company is also attractive to investors.
Our business model is very simple: Lotto24 is the internet-based lotto kiosk. As in all forms of kiosks and convenience stores, customers can buy lottery tickets from us – but only online or using their mobile devices. We forward these purchases to the respective lottery company and receive a commission in return. Here, it is important that we do not actually host the lotteries ourselves, focusing instead on selling the lottery companies’ products online. And providing the customer with a fantastically comfortable service in the process. Lotto24 is exciting for investors because we have positioned ourselves as the leader within a rapidly expanding market and are constantly extending our market share. So, we have many dynamic years ahead of us and lots of plans for the future.
If we think about the lottery, we are instantly reminded of lottery tickets – how have lottery players in Germany received the online offering, and how do you assess the potential?
Even though this might sound unbelievable: only ten per cent of lottery sales are currently made online. In other words, 90 per cent of players continue to purchase their lottery tickets at the store, where they voluntarily wait in line. And this in a world in which people do virtually everything online and comparable industries, such as banking and travel, conduct between 40 and 50 per cent of their business online. But the tables are turning. Our current annual survey carried out among around 1,000 internet users interested in the lottery confirms the huge market potential within the online lottery segment: 83 per cent of surveyed internet users could imagine playing lotto online, with 76 per cent actually concretely planning to do so. Translated to our market of around 7 billion euro, this corresponds to potential total online lotto sales of 5.4 billion euro. Personally, I predict an online share of around 50 per cent in the medium to long term. That is already the case in the lottery sectors of other European countries.
In addition to the online offering, you also have a smartphone app. What are the differences between the two offerings and the respective target audiences?
Both offerings are virtually identical, as each presents the same products and services. But there are minor differences: the app features the ‘Save lucky dip’ function more prominently and comprehensively, for example. Furthermore, the app is a little more user-friendly, as the extensively native programming feels somewhat more fluid. With regards to the target groups, the ratio of male users is higher in the case of the Lotto24 app; in addition to this, app users are also considerably younger.
You are advertising the app with hilarious short TV and online ads. Where did the idea for these come from, and how are such campaigns planned and developed?
The idea was developed in several joint brainstorming sessions with our creative agency ‘heimat’. Needless to say, you always ask yourself how you can garner the attention of consumers in a world in which our senses are so overloaded while simultaneously effectively explaining the product benefits. At the beginning, we tested our idea in the form of concepts with the target group and included the results in the final storyboards. In parallel to the production of the ads, we designed a media plan for the first campaign month – above all defining a measurement strategy for assessing the success of the campaign in the process. Then it was a matter of booking, placing, measuring and optimising.
You have once again received an award for ‘family friendliness’ this year. Why is reconciling family and career while simultaneously creating a positive working environment in general so important to you?
For me personally, it is important to have a working environment that is fun. I want to set off for work in the morning with a smile on my face – and I do – and look forward to the day ahead. This ensures that I am at my most productive and creative and that I accomplish the most. Our employees appear to feel the same way. Many companies still fail to see that being able to balance the plannable and non-plannable events in family life with work should today be matter-of-fact. That is precisely what we make possible. This results in very satisfied and motivated employees with a low turnover and many people applying to work for us. And this in turn contributes to our success.
If a player wins a large amount of money, you call them personally to inform them of their win. What is it like making these phone calls, and what special telephone moments have been particularly memorable?
Sometimes, I have to first convince the customer that they have actually won and that I really am the Chair of the Board of Lotto24. The similarity between the names Strombeck and Stromberg is not always helpful here. Otherwise, I generally advise them to be level-headed and discrete – and to not completely turn their lives upside-down and quit their jobs. I tell them to let it sink in for a while and take time to consider what they want to do with the money. If somebody lives in a small village, I advise them to open a bank account in the next larger town to transfer the money to. The most wonderful telephone call I had was with a winner who had just recovered from a serious operation and then won the lottery. I guess I was his lucky charm.
Not all lotteries are equal – what betting options do you offer players, and how are mobile devices and voice assistants influencing your offering?
We actually offer all relevant German lottery market products: Lotto 6aus49, Spiel 77, Super 6, EuroJackpot, DuoLotto, GlücksSpirale, Keno, Plus 5, lottery syndicates, the Deutsche Fernsehlotterie and currently also the Deutsche Weihnachtslotterie (the German Christmas lottery). Our customers benefit from a simple and convincing playing experience, which is supplemented by numerous service functions such as multi-draw, jackpot hunter, win notifications, quick tips, etc. Furthermore, wins with Lotto24 – as the official partner of the German pools and lottery umbrella organisation – are guaranteed by the state. Mobile devices have been the most frequently used channel for some time now. For this reason, we are trying to develop all consumer processes primarily for mobile devices. Here, focusing on the essential is always the top priority. We have already unveiled a voice assistant for requesting the lottery number and jackpot amounts live on the Amazon platform. Unfortunately, Amazon does not yet allow the sale of lottery tickets.
What can Lotto24 players look forward to in future?
We will of course continually further develop the so-called ‘mobile customer experience’ and consistently check whether there are also any other digital sales channels that are relevant for our customers. In addition to this, we want to extend our product portfolio in the near future – with scratch cards, for example. Here, Lower Saxony has been enjoying the Lotto24 scratch cards since September of this year. Further federal states and tickets will follow. We are also developing new service ideas – although I do not wish to disclose any details at this point in time.
What are the most frequent wishes that potential millionaires want to fulfil, and what would you yourself do if you won millions?
Many customers equate the dream of winning lots of money with freedom. Winning the lottery allows them to decide what to do with their lives. This independence brings happiness. Many of our winners first pay off loans or buy their children a house. This is of course a relief for them and takes away certain worries. Personally, I would maybe install a swimming pool in the garden for my kids. Furthermore, I would like to try to purchase further Lotto24 shares. Otherwise, I would not change much; I love my job and my everyday life.
PETRA VON STROMBECK
Business administration graduate Petra von Strombeck has been Chair of the Board of LOTTO24 AG – the leading German provider of state lotteries on the internet – since May 2012. Petra studied international business administration at the École des Affaires de Paris (now ESCP Europe) in Paris, Oxford and Berlin.
Picture credit © Marc Hohner