You have created a solution that helps to organize consumer sweepstakes. How exactly does it work and what is the Brand Activation Balance methodology that you write about on your website?
Brand Activation Balance is a method for designing consumer and B2B activations. It allows us to find players (buyers) at higher stages of sales funnels and significantly increase the number of customer transactions during the campaign period. In BAB we focus on the players, not just the winners.
An example of Brand Activation Balance application is a lottery with a game for fun (Freemium) and with a purchase (Premium), which we implemented for brands such as Piątnica, Wafle Familijne. As a result, we achieved higher results. The use of the promotion budget is more effective. This is manifested in a higher number of acquired lottery users and a longer time of use of the lottery application.
How did it all start that you decided to open such a startup and devote yourself to lotteries?
We have been dealing with promotional lotteries and contests for many years. Thanks to our numerous contacts abroad we have a comparison with the methods of promotion used in more mature markets. We noticed that in Poland the lottery usually looks the same: buy, send the data and wait for the drawing. We knew that we have tools that can increase the effectiveness of promotional budgets. All we need to do is to focus on the experience of the promotion participant.
Example: we have 100,000 entries and 100 prizes in a sweepstakes. So only 1 per cent of the games will end with a positive “You won” message. This means that 99,900 consumers experienced a loss. That’s why we decided to focus on the losers – we developed the BAB method, which results in return, repeat purchase and better budget utilization.
So we had to turn the thinking about lotteries upside down. We needed technology. We decided to tie up with a professional software company that would bring our every mechanism to the smartphone screen. We invested the money raised from the sale of shares in certified drawing equipment and in developing new promotional modules.
Today, it is no longer enough to promise a valuable main prize and hope that people will fall for it “because it is on the poster”. Poles are becoming more and more aware, educated, and gamers! Our goal is for each campaign to draw participants in, not so much with the prizes themselves (gambling), but with the fun, the course, the interaction with the brand, the opportunity to build relationships and have an impact on the likelihood of winning.
In case of any contests, sweepstakes, etc., the legal aspect is quite important. How did you take care of it in your solution?
Permission, bank guarantee, authorities – marketers don’t like to deal with administration. We are here to take on the role of the formal organizer and obligated entity so that the client does not have any paperwork on his side. This is our core!
We have also taken care of multi-million limits for bank guarantees required for obtaining lottery licenses, certified drawing equipment and IT tools for database management. These tools allow us to handle all of our legal services in a specialized manner.
When we were exchanging emails with each other, it caught my eye that in your footer you have posted a guide titled “Lottery Permitting. How do I get a permit?” – do I actually have to get any permits before I undertake creating a raffle and is it somehow particularly difficult?
“Fantasy lotteries, fantasy bingo games and promotional lotteries may be organized, on the basis of a permit granted, by natural persons, legal persons or organizational units without legal personality.” (Art. 7 of the Gambling Act)
The permit must be obtained from the appropriate Tax Administration Chamber. Two months after submitting the application, you can start the lottery. This is a very detailed process. I encourage readers to contact me to, for example, arrange a meeting where I will explain it step by step or send a guide.
However, at this point I would like to mention another innovation of our startup. The solution is called LosoFUN.pl and was created for companies that don’t want to wait for permission but want to draw prizes immediately. All they need to do is to rent LosoFun.pl and in this way, quickly (7 days, instead of 2 months) run a draw for their customers. It opens the door for companies to test different promotional mechanisms. I especially recommend LosoFun.pl to e-commerce and socialmedia agencies.
Why do you actually run these sweepstakes? What do they give my brand?
I will quote a summary of the year 2021 in Nofsza, which will show a lot. Participants of about 30 of our campaigns (sweepstakes and contests) entered with a purchase 4,187,139 times. If we multiply this by a purchase condition (e.g. buy products for x PLN) it gave us a total of 268 526 776 PLN as transaction value. The total amount of prize pools in all projects was 5 505 378 PLN, which means that from one PLN invested in prizes, the customers achieved about 50 PLN of turnover. And this is a fraction of all transactions in a given period. We are talking only about the reported ones. Does it show that it is worth it?
What’s more – lottery campaigns have strong influence on the increase of the brand awareness. In freemium games (for fun) we had a total of 6 786 511 entries. This is first of all time for brand managers, which they can use for communication, but also a way to draw the undecided into the game with a purchase and increase the sales effect. For chains and malls, giving out free rewards builds footfall at the point of sale. The range of impacts is huge, you just need to know how to get people involved.
Lottery tickets can be allocated for an infinite number of things to build other sales tools: signing up for a newsletter, completing a survey, registering for a loyalty program, buying a subscription, voting in a poll, and so on. Recently, our lottery services have even been used by the Fairtrade Foundation to increase engagement in their education programs.
What surprised me is that your customers include both private companies and… local governments. You could say that you have created both a B2B and a B2G solution. How did your cooperation look like in the case of the latter?
Local governments in larger cities recognize the value of lottery tickets. By launching one action with a closed budget, they can extend it to anyone interested in, for example, filing a PIT return where they live. As a result, municipalities generate more revenue. The implementation of these lotteries comes from public funds, so each such project comes to us by winning a tender.
I can admit that we have specialized in handling such lotteries, we have a structure improving their implementation. We have already worked or are working for Gdańsk, Pruszcz Gdański, Rzeszów, Tarnowskie Góry.
I would also like to return to B2B clients who very often use our services to, among other things, gamify their work environment, strengthen business relationships and reward their partners. We have already managed to implement such projects for Interrisk, distributor of Kropelka adhesives, Purmo, S’ouvre, Neuca, Sinclair.
In March Eura7 invested in you. They financed you with PLN 116 thousand and took a 48.7% stake. What will you use the money for and how is the first month of cooperation with the Cracow Group going?
Eura7 Group has over 20 years of experience in developing web technologies and this is something we were most interested in. The cooperation is going great. We will, of course, use the funds to develop our gamification modules and tools such as LosoFUN.pl or eRODO.
