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#440: Leaders in Customer Loyalty Brand Story: Virginia Lottery Bets Big on Customer Loyalty with Purpose-Driven Personalization · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:02
  Speaker 1: Good afternoon and good morning.
• 0:03
  Speaker 1: This is Ethan Perry, director of Content at Loyalty360, welcoming you to another episode of the Loyalty360 Leaders and Customer Loyalty Brand Stories series.
• 0:14
  Speaker 1: Here we talk to brand leaders about what they're seeing and hearing on the front lines of customer channel and brand loyalty.
• 0:21
  Speaker 1: Today we have the pleasure of speaking with Prudence Milligan, who is the Senior Customer Strategy Manager for the Virginia Lottery.
• 0:28
  Speaker 1: Thanks for taking the time to talk to us, prudence.
• 0:31
  Speaker 2: Thanks for having me.
• 0:33
  Speaker 1: For those who may not be familiar can you please give us a short introduction to Virginia Lottery and your role with the company and your experience in customer loyalty?
• 0:43
  Speaker 2: Sure.
• 0:43
  Speaker 2: So we are a state-run lottery organization whose mission is to support K-12 education in Virginia and, just as a little bit of a bragging, last year we generated more than $934 million in profit for K-12, which is pretty exciting, and I'm pretty proud to be a part of that and be able to talk about those accomplishments, so that's kind of a cool thing for the state of Virginia.
• 1:14
  Speaker 2: I am, as you mentioned, the senior customer strategy manager here at the lottery within the marketing department and oversee a team of 11 people that specialize in CRM, loyalty, consumer research, digital analytics and digital product owners of both the website and the app, and specifically my role is, in addition to managing the team, is to develop an overarching strategy for our CRM and loyalty programs, as well as lead agency-wide initiatives to enhance our player experience, such as, you know, personalization, customer journey mapping to identify pain points and areas of opportunity, et cetera.
• 1:59
  Speaker 2: My kind of general experience, I guess, in customer loyalty started when I was working more as a consultant and I got to work with some big brands such as Kellogg's with their loyalty program to optimize their existing program at the time.
• 2:25
  Speaker 2: Additionally, I worked with McDonald's in the APAC region to launch their respective.
• 2:32
  Speaker 2: They have McDelivery service in APAC, so developed those programs in Hong Kong, singapore and Australia, those CRM programs which was kind of their first step right in establishing loyalty.
• 2:48
  Speaker 2: And then, of course, my most recent experience is I was the lead in designing and launching the first ever loyalty program for the lottery and overseeing it from a strategic standpoint.
• 3:00
  Speaker 1: Amazing.
• 3:01
  Speaker 1: So you mentioned that you know you just launched your first true loyalty program with any lottery in the US.
• 3:28
  Speaker 2: So all a majority of the lotteries, including us at the time, we had what we called like second chance programs right, so people could take their non winning tickets and enter them in for drawings and extra chances to win additional prizes.
• 3:45
  Speaker 2: But that was it, that was, and it was only typically around one product, which is our scratch product.
• 3:50
  Speaker 2: So when, prior to going out for our RFP to look for a vendor to help us, you know, build this loyalty program, my first step was really to develop a comprehensive strategy and vision of what the program should be.
• 4:05
  Speaker 2: So when we were evaluating the RFPs, we could have something to measure the submissions against.
• 4:11
  Speaker 2: And, being that it was brand new for the lottery industry, I wanted to have kind of like a clear I guess you could say like roadmap right of our wish list and see, you know, how we could achieve that or not.
• 4:25
  Speaker 2: So I did a lot of research on what other lotteries were doing and, as I mentioned, none were really doing anything that was a true loyalty program.
• 4:33
  Speaker 2: And then, you know, just taking a look inward at our business, it's very different from, you know, a QSR or a more traditional consumer brand.
• 4:45
  Speaker 2: You know people obviously are dreaming of the possibilities.
• 4:51
  Speaker 2: They take their lottery game play, at least in Virginia, like it's very kind of private, but they also want to hear about other people who are winning right, but not necessarily promote themselves playing all the time, um, and really they want those, those opportunities to have another possibility to win.
• 5:15
  Speaker 2: So that was really the the emphasis, um, the reason for doing a points-based system because I wanted to make sure that we were giving players back what a chance to have additional free play and or to be able to enter those points into more engagement activities, such as additional prizes and drawings that are either utilitarian or experiential.
• 5:40
  Speaker 2: So I didn't want it to be one where it was you, you know, a lot of tchotchke or giving away stuff that wasn't relevant to our players.
• 5:50
  Speaker 2: Because at the end of the day, if you ask any of our players, you say what do you want, and they'll be like money, of course, right, because they're playing the lottery.
• 5:57
  Speaker 2: So you know the doing the points based system.
• 6:02
  Speaker 2: We wanted to make sure that it was simple, because lottery play gameplay can be a little complicated when you're first getting into it, so we didn't want to steer people away.
• 6:12
  Speaker 2: So making it very simple, very fun and achievable, and then also for players to see oh, I can use my points that I've earned, you know, for free play and or these draw entries into drawings.
• 6:25
  Speaker 2: So really, that was kind of the impetus about doing the points based system and we really just wanted this program being that it was like the first for lotteries to really emulate a true kind of consumer loyalty program.
• 6:41
  Speaker 2: So, you know, that's, that's how's how we started and I think we have achieved the first phase in doing so and we're continuously optimizing and growing and we've mapped it out in phases so it's not throwing everything at the player all at once.
• 6:57
  Speaker 2: And I do think we have a formidable program right now and, as we continue to roll out our next phases, I think we'll be right there.
• 7:06
  Speaker 2: So I'm excited.
• 7:07
  Speaker 1: Amazing.
• 7:08
  Speaker 1: So one of the things I heard you touch on there a little bit was the idea of engagement, and that's something that we continue to hear brands discuss that you know they're looking to solve the challenge of creating and sustaining engagement, particularly through the use of their loyalty program.
• 7:24
  Speaker 1: Is that something that you know is one of your aims, and how do you think that this new loyalty program and the points-based rewards program helps you sustain engagement?
• 7:35
  Speaker 2: It definitely is.
• 7:36
  Speaker 2: I mean, we're coming up to a full year of being in market with the loyalty program, so I am starting to see sorry, a little bit of a decline in engagement, but we're still above sort of the industry benchmarks, right.
• 7:49
  Speaker 2: So I think potentially it's us leveling out right, not being as new as we were, so these are probably going to start to be our more normal numbers, if you will, but I'm not ignoring that.
• 8:09
  Speaker 2: And really, um, with lottery, our state is, um, not unlike a lot of other states.
• 8:12
  Speaker 2: So we have the lottery and we've had it for years, and now we're starting to get competition that we've never had before.
• 8:16
  Speaker 2: Um, so, like our general assembly has passed the ability now for us to have um sports betting, so that's you know.
• 8:24
  Speaker 2: So that's a huge share of wallet that we never had to compete against before.
• 8:28
  Speaker 2: We also have physical casinos now, which isn't a direct competition, but when those casinos start to move to online and that gets passed, I mean that's going to be yet another share of wallet that we're going to have to compete for.
• 8:44
  Speaker 2: So engagement is really kind of top of mind for us and we really are looking at delving into.
• 8:52
  Speaker 2: Now that we have the loyalty program, we're able to get more personalized data on our players, specifically our retail players, because those are essentially anonymous without the loyalty program.
• 9:02
  Speaker 2: So now that we are collecting additional data, we're able to start developing some really, I think you know, getting down to one to few and ideally one to one personalization in terms of not only our communications but also our offers, our promotions, and we're, you know, working on updating our app and website to have recommendation engine around player behavior so that we can you know it'll be an AI machine learning base that'll say hey, you played this, you should now try this.
• 9:39
  Speaker 2: So we really are working on keeping engagement top of mind, and we're also working with our loyalty partner, marigold, and using some of their new kind of features, functions that they have for increasing engagement as well.
• 9:58
  Speaker 2: So we're actually getting ready to launch that one of their tools here at the beginning of May, so I'm excited.
• 10:07
  Speaker 1: I can't wait to see how that works out for you.
• 10:08
  Speaker 1: We'll have to have you back on the podcast again after a little while to talk about it.
• 10:12
  Speaker 1: Yeah, so one thing that we're going to be discussing at our upcoming 2025 Loyalty Expo in May is the challenge of engaging with younger audiences in particular.
• 10:26
  Speaker 1: We find that brands think or predict that younger customers are interested in one thing, but then their behavior is completely the opposite.
• 10:34
  Speaker 1: Have you experienced any challenges in engaging the younger demographics, and how are you addressing that?
• 10:43
  Speaker 2: I mean, when I saw this question, I kind of giggled inside, because it's a struggle if you speak with anybody in the lottery industry, right, trying to attract that younger player, because the lottery is kind of like you think about who plays.
• 10:56
  Speaker 2: It's typically you know, your grandparents, you know, and they've introduced it to maybe your parents or what have you, and so, yes, attracting the younger audience is one of our biggest things and, you know, with us only, like I said, with the loyalty program only being almost a year old, you know, we're still learning some insights and learning some new behaviors, but we are seeing, definitely because we offer online lottery play as well, so our online audience is definitely skewing younger, and not that this is surprising, right, like our retail business is more of our older players.
• 11:42
  Speaker 2: But we are definitely working with some new acquisition tactics and engagement strategies to really try to hone in on that younger player and, as I mentioned before, trying to kind of go after that sports better right, because we know that the sports better players are definitely of that younger audience.
• 12:01
  Speaker 2: So how can we attract those players over to the lottery as well?
• 12:06
  Speaker 2: Can we attract those players over to the lottery as well?
• 12:11
  Speaker 2: Some of the things that we have planned, that we're rolling out, that we're hoping will help to kind of engage.
• 12:15
  Speaker 2: That younger audience is deploying, you know, some badgeification strategies and also really trying to no-transcript.
• 12:53
  Speaker 2: I want to break that habit and again create kind of like that FOMO feeling so people are engaging more often with us.
• 13:01
  Speaker 2: But yes, I mean the younger audience.
• 13:03
  Speaker 2: We haven't cracked the code yet, but we're starting to chip away at it a little bit and it's definitely top of mind for sure.
• 13:11
  Speaker 1: Well, so one tactic that we hear about people using to bolster their loyalty programs is personalization.
• 13:17
  Speaker 1: We hear about that from our members all the time.
• 13:20
  Speaker 1: What does personalization look like for Virginia Lottery, and how are you leveraging data and insights to help bolster those personalization efforts?
• 13:31
  Speaker 2: Yeah, so we do have a I mean we have a ton of data and so really kind of culling through that and we're able to really now get down into the weeds of, I think, a pretty accurate segmentation.
• 13:46
  Speaker 2: So we're using that to drive our personalization.
• 13:49
  Speaker 2: So, and knowing that they're they're separate right, segmentation is very different from personalization, but using that to influence the messaging and the offers and and whatnot.
• 14:01
  Speaker 2: But really personalization has become kind of one of our key focal points and I think I'd mentioned this before.
• 14:08
  Speaker 2: But we have plans to build a recommendation engine, you know, based on player behavior, that'll recommend new products for people to try and whatnot.
• 14:18
  Speaker 2: And then we also are using a similar based program to personalize our communications deeper and our offers deeper as well, using that machine learning and really again like enhancing that player experience.
• 14:36
  Speaker 2: So we've got some plans.
• 14:38
  Speaker 2: I developed a personalization strategy for the entire agency so I've got it kind of based on platform right.
• 14:46
  Speaker 2: So we've got strategies and tactics for the web, strategies and tactics for the app, because they're not always the same.
• 14:52
  Speaker 2: And then also, what can we do at retail as well?
• 14:56
  Speaker 2: I mean that's a little bit more challenging to quote, unquote personalize at the retail level.
• 15:00
  Speaker 2: But again we want to meet the player where they are and really start tapping into machine learning to drive that personalization across our CRM and loyalty platforms.
• 15:14
  Speaker 1: That's awesome, very cool.
• 15:15
  Speaker 1: So along with personalization and collecting all that data comes the issue of privacy and data security, another thing that we continue to hear about.
• 15:25
  Speaker 1: How do you keep up with those ever changing regulations and the challenges of adapting?
• 15:30
  Speaker 2: Well, I think that we have maybe a little bit of an advantage being in the lottery industry, because it's the nature of our business.
• 15:37
  Speaker 2: You know, security has always been at the forefront.
• 15:40
  Speaker 2: So, you know, because we have an age requirement, you know we always do age verification we have, you know, fraud is kind of high in the lottery industry, so we have a lot of fraud checks in the background when people register.
• 15:58
  Speaker 2: So really, we do keep those security measures in place and are pretty much at the forefront of it.
• 16:06
  Speaker 2: But most recently, what we have done is, in addition to deploying, like 2FA for, you know, signing on, because, again, you're accessing when somebody plays online, you're accessing their banking information, their online player wallet, all that, so we have to be really locked down.
• 16:25
  Speaker 2: So we've we've, you know, thrown out some additional tools for our players where it's SMS, 2fa versus an email and, again, like, we have age verification, fraud detection and identity verification that are put in place.
• 16:40
  Speaker 2: So really we're also, I think, maybe a little bit more conservative, if you will, in terms of sharing data right with our various vendor partners.
• 16:54
  Speaker 2: Just because of that right, like we have the high PII, we've got a lot of sensitive data.
• 17:00
  Speaker 2: So, for instance, like with Marigold.
• 17:02
  Speaker 2: Like you know, ideally, when I was building the program, it would be great to have all of that financial information right to really dig deep.
• 17:09
  Speaker 2: But then I was like, well you know, do we really need to have all of that financial information right to really dig deep?
• 17:11
  Speaker 2: But then I was like, well you know, do we really need to have that risk of vulnerability?
• 17:16
  Speaker 2: No, it ended up being more of a nice to have.
• 17:18
  Speaker 2: So that's you know where we kind of draw the line, and if it's a nice to have, we're going to keep it on lockdown.
• 17:24
  Speaker 2: If it's definitely something that we see will, you know, have a huge impact, then we'll have to give some consideration and put in some additional security measures to ensure the safety of our player data.
• 17:37
  Speaker 1: Right, that makes sense.
• 17:40
  Speaker 1: So during our recent advisory board discussions and in some of our recent brand surveys, we've noticed that there's a recurring challenge with understanding and keeping up with technology.
• 17:50
  Speaker 1: You know, brands are often picking platforms that don't deliver as promised or they cause integration challenges with legacy systems.
• 17:58
  Speaker 1: Have you seen some of these things and, if so, how are you handling it?
• 18:02
  Speaker 1: And you know what kind of results have you noticed in navigating new technologies?
• 18:08
  Speaker 2: Yeah, actually, when we, when I kind of hinted this when we went out for the RFP and then we selected our vendor it, the, I would say that this is probably been the hardest integration I've ever worked on in terms of a program, because again, we've got the loyalty or we've got our sorry, our lottery, um player account management right for our online players.
• 18:34
  Speaker 2: So that whole system.
• 18:36
  Speaker 2: And then we have the retail system.
• 18:39
  Speaker 2: That's and it's not it's not tailored to each individual retailer right, it's just a, it's a system that goes across all the retailers.
• 18:48
  Speaker 2: So we've got got our point of sale information, we've got our online information, we've got our internal integrations with our APIs around the web and the app, and now and then we have our CRM stack and then we brought in the loyalty.
• 19:03
  Speaker 2: So we had five different integration points that we needed to do.
• 19:08
  Speaker 2: It was it was very challenging and we did.
• 19:12
  Speaker 2: To your point about the, the um, you know limitations, you know I had this vision of I want everything to be real time for our players.
• 19:21
  Speaker 2: You know points accumulating real time etc.
• 19:23
  Speaker 2: But when we got down into it, because the nature of our online play is so rapid, so somebody could, if you think about a slot machine, right, like you can press that button super fast, like every second.
• 19:36
  Speaker 2: Well, that's how our online play is.
• 19:39
  Speaker 2: So those that frequency of transactions going in at a millisecond was too much for anybody to be able to process, so we couldn't do those, the online play as real time points.
• 19:53
  Speaker 2: We had to end up batching it, but that was a solution that we were okay with because we hadn't launched the program yet and so players didn't know any different right, and they didn't.
• 20:04
  Speaker 2: And I was worried because they would get their retail scans instantaneously but then would have to wait, you know, two hours to get their online plate.
• 20:14
  Speaker 2: But they don't seem to mind.
• 20:15
  Speaker 2: So again, I think it's a, it's a managing of expectations, right with your consumer base.
• 20:21
  Speaker 2: But also we got to this point with all five vendors, or all five partners, you know, coming to this solution.
• 20:30
  Speaker 2: So for us, you know, it's not just something that we would sit into a room and be like, oh my God, we can't do this, our vendor can't do this, you know it's.
• 20:39
  Speaker 2: It's like hey, we selected these people as our partner, let's bring them to the table and let's figure out how we can make this work, and to the best possible way for both what our needs are and our consumers' needs.
• 20:50
  Speaker 2: So that's kind of how we've been navigating it and it's been very beneficial and we're able to find some really good workarounds.
• 20:59
  Speaker 2: That, you know, might have seemed a bit Herculean if we hadn't involved all of our different partners, because everybody's got different ideas.
• 21:09
  Speaker 2: Involved all of our different partners, because everybody's got different ideas.
• 21:16
  Speaker 1: So you talked a bit about some of the things that are coming up and what you're looking at in the near future, but what is the next big thing for customer loyalty and customer experience that Virginia Lottery is focused on right now?
• 21:24
  Speaker 2: Yeah, and I think that this I was thinking about that a lot and I think some people listening might think that this is counterintuitive, but I really I really feel pretty good about this.
• 21:33
  Speaker 2: I think it's really getting back to basics, right.
• 21:35
  Speaker 2: So I think we collectively, as marketers, have maybe gone a bit too far with a lot of like some gimmicks, and you know ways to get people's attention and engagement.
• 21:46
  Speaker 2: I mean, I, you know, as I'm a consumer as well as a marketer, so I get some stuff and I'm like, hmm, that's kind of interesting and I just think we need to maybe just take a step back and get down to the basics and be like you know people who are engaging with our brand, we know what they want.
• 22:03
  Speaker 2: Let's give them what they want, right?
• 22:06
  Speaker 2: We don't need to do all these crazy bells and whistles.
• 22:08
  Speaker 2: I want to make it fun.
• 22:10
  Speaker 2: I still want to keep their level of interest up, but I think really kind of focusing in on like that core is is sort of where we are, and so, as I talked about before, like personalization is key.
• 22:22
  Speaker 2: That will indirectly and directly enhance a player experience and will separate us, you know, more from a competition standpoint in terms of share of wallet.
• 22:31
  Speaker 2: So again, separate us.
• 22:31
  Speaker 2: You know more from a competition standpoint in terms of share of wallet.
• 22:33
  Speaker 2: So again, I think you know, kind of getting back to basics and honing in on personalization is where we're focused for right now.
• 22:43
  Speaker 1: Awesome.
• 22:43
  Speaker 1: Well, that brings us now to our world famous quickfire questions.
• 22:48
  Speaker 1: We like to try and keep these to a one word or short phrase.
• 22:54
  Speaker 1: Okay, so I'm going to jump right in.
• 22:57
  Speaker 1: Here we go.
• 22:58
  Speaker 1: What do you do better?
• 23:00
  Speaker 1: Managing up or managing down?
• 23:02
  Speaker 2: Depends on the situation.
• 23:04
  Speaker 1: What is the most challenging project you've ever been a part of?
• 23:07
  Speaker 1: What's the most?
• 23:08
  Speaker 2: challenging project.
• 23:09
  Speaker 2: You've ever been a part of the Virginia.
• 23:10
  Speaker 1: Lottery loyalty program.
• 23:18
  Speaker 2: Are you a just-in-time kind of person or more of a strategic planner?
• 23:21
  Speaker 2: Probably.
• 23:23
  Speaker 1: I think it depends on the situation, but probably more of a strategic planner.
• 23:28
  Speaker 2: What is your favorite type of music?
• 23:29
  Speaker 2: Again, it vacillates, I think right now I've been into a little bit of hip hop and dance.
• 23:34
  Speaker 1: Who is your favorite artist of all time?
• 23:35
  Speaker 1: Jackson Pollock.
• 23:39
  Speaker 1: What is most important in your life Balance.
• 23:45
  Speaker 1: What were you most proud of growing up?
• 23:51
  Speaker 2: Being the first in my family to go to college and then graduate school and what was your degree in school?
• 23:55
  Speaker 2: Undergrad marketing graduate was strategic planning for advertising.
• 24:02
  Speaker 1: And how did it prepare you for the workforce?
• 24:07
  Speaker 2: I think it gave me a good, a good foundation to to get out there and and get some, get some stuff done.
• 24:14
  Speaker 1: Awesome.
• 24:15
  Speaker 1: Well, prudence, thank you so much for taking the time to speak with us today.
• 24:18
  Speaker 1: It's always a pleasure speaking with you and getting an update on the world of loyalty at the Virginia lottery.
• 24:23
  Speaker 1: We really appreciate it and we look forward to hearing more about it and your rewards program later in 2025.
• 24:29
  Speaker 1: Thank you, everyone else, for listening and make sure you come back every Thursday for the next episodes of Leaders in Customer Loyalty Brand Stories.
• 24:38
  Speaker 1: We'll see you then.
• 24:40
  Speaker 2: Thank you.