Felix Group: Andy Egan
"Everyone's a winner", not least of all the founder of this business
Too good to be true’ offers and ‘free’ prizes bombard our inboxes and mobile phones, jump from our TV sets and radios and are tucked inside every newspaper and magazine.
Most of us are immune to such promotions, knowing the small print inevitably involves calling a premium rate number, revealing our bank details or sitting through a lifetime of sales presentations.
From timeshare apartments to the widows of Nigerian billionaires, we’ve learnt to ignore it all. So, it’s fair to assume then that a new medium-straddling game titled Everyone’s A Winner, which promises to reward every player to twice the value of the £1, £2, £5 or £50 they pay to play, is just another clever marketing illusion. But it’s not.
There is no small print get-out. There is no clause. The game, which will primarily appear in the format of a pub machine, will really award every player with a prize – a free haircut, cocktail jug, round of golf at the Belfry, widescreen TV, Toyota car, to name a few of the prizes on offer – worth a minimum of twice the value of the playing fee.
Just to clarify, that’s a no-strings round of golf at the Belfry and a voucher to walk into Dixons and collect your TV, not a free round of ‘pitch and putt’ on Christmas Day providing you bring along both great grandparents or a free 14″ telly when you buy a DVD recorder and iPod too. What it says you get, you get – and if you don’t like what you’ve won you can press the ‘swap’ button for an equivalent value prize.
You’re right to be cynical, though. And Andy Egan, the man behind the AIM-listed Felix Group, which will be rolling out 10,000 machines across the UK throughout the rest of the year, expects it early on. “I realise people will think it’s complete folly and a con and that’s our biggest challenge,” he acknowledges. “But once they see people winning and play one and realise it is actually true, we’ll have something that’s a very powerful call to action and a new concept for the marketing world.”
And that’s how Egan plans to make Everyone’s A Winner work. Behind what superficially appears a quirky innovation, there were five years of painstaking R&D, partner building and trials before the idea was ready to IPO in March 2004, raising enough to fund its roll-out, which began last month.
The result is a game exempt from gambling regulations and therefore any age restrictions and an impressive network of high street partners and brands who provide prizes to the Felix Group at a massively discounted rate on the understanding they’ll be marketing to a critical mass.
“It’s about utilising retailers’ advertising budgets,” says Egan. “They give us the prizes for next to nothing, but we virtually guarantee for every discounted product they give away they’ll get a customer coming through their doors. For example, to play a round of golf at the Belfry costs something like £130, but we can buy it for £3 and give it away as a £10 prize. We make double what we’ve paid and the Belfry knows that the person who has won the prize, while they’re under obligation to do so, will probably take a friend or three with them. And they’ll more than likely have a bite to eat before or after. It’s the same with the cinema. We get the tickets for free but they know they’ll make their money back from drinks and popcorn.”
Power to the people
Egan points to persuading Dixons to sign up as the group’s first partner as the point of take-off and uses it to emphasise the strength of the format as a marketing tool and his business model. “We could just give away TVs and post them out to the winners, but why spend money doing that when it’s better for us and Dixons to send people into the stores with a voucher?” he says. “Yes, Dixons will try and sell you an extended warranty but that’s up to you to turn down and no different to buying anything for yourself. Also, as Dixons is responsible for the after-sale care our brand is always protected even if something goes wrong with the TV.”
The ‘redemption vending’ machine format and its ability to be placed in stations and supermarkets as well as pubs offers the obvious advantage of high street presence without any of the overheads of premises or high staff numbers. Egan confirms it’s a format tried and tested by Coffee Nation, a company which has challenged high street giants by offering premium coffee from a vending machine in locations such as WH Smith and Tesco. While he can’t estimate turnover, Egan says he anticipates overheads of £150,000 for 10,000 machines offering huge potential for profit.
As well as being available to play by mobile phone and the internet, Egan has ambitions to take the game to TV and has plans for a channel where viewers can play interactively and brands can have their own shows. “You could have a programme from 8pm to 9pm where you play exclusively for B&Q prizes and for every text you’re guaranteed a certain discount – it’d be very powerful,” says Egan. He’s also in talks with Sky and ITV1 about how the format could be used to further incentivise text voters by guaranteeing a prize double the value of the text charge.
The initial priority, however, is roll-out and reaffirming the value to partners of the game’s marketing power. “It offers the exact solution the big retailers are looking for,” enthuses Egan. “Say, for instance, a supermarket gives away £1m worth of £10 vouchers they know the average spend of a basket is £55 so they’re guaranteed to make money, while the player stills gets something for nothing. Everyone’s a winner!”