Learning from LEGO: 4 Pillars to Resilient Brands

Learning from LEGO: 4 Pillars to Resilient Brands

Stories of Failures & Triumphs
After decades of success, LEGO was in deep crisis during the early and mid-naughties. Ten years later, the family-owned company topped the Brand Finance Index of the world’s most powerful brands in 2015, before being knocked to number 2 by Walt Disney in 2016.  How did LEGO manage to rise out of a financial cesspit and into marketing olymp? And what are the lessons for Marketers?

(Image source: https://www.lego.com/)

LEGO bricks have been around since 1949. A staple in children’s rooms for decades, the seemingly “old-fashioned” toy lost ground to video consoles and computer games. LEGO reacted by more and more diversification into lifestyle products, leisure parks, shops and many more. Until, in 2004, the family-owned business from Denmark was stuck in a deep crisis, with a take-over by competitor Mattel looming. That was when the newly appointed CEO Jørgen Vig Knudstorp launched a new strategy, including four defining decisions.

  1. Back to the core

LEGO bricks are creative, durable and endlessly extendable. They allow us to build our own world. A simple but ingenious brand essence, which was diluted over years by uncontrolled diversification. The new strategy radically outsourced or completely cut out products and projects which were not true to LEGO’s brand essence.
Lesson: the brand’s essence should always be the base on which products and services are built.

  1. Using the customer’s creative mind

“Everyone” knows LEGO, and the brand is dear to both to the young and the young-at-heart. This loyal fanbase became a rich source of new product ideas for the company using a crowdsourcing approach: Once a suggestion achieves 10,000 online votes, it goes into production. Whoever submitted the winning suggestion, will receive 1% of the generated profit for their idea.
Lesson: Customers who love your brand often are full of creative ideas. Listen to them.

  1. Creative co-operation and synergies

Instead of throwing money at attempts to create new trends themselves, LEGO co-operates with powerful partners to expand their target groups and create synergies. Recent examples are the smash hit LEGO Movie (2nd movie planned for 2018), as well as the co-operations with LucasFilm (Star Wars) and 20th Century Fox (The Simpsons).
Lesson: Co-operate with partners to utilize (brand relevant) synergies.

  1. A product for life

LEGO is making the most out of the loyalty of their now-grown customers from past decades. From complex building sets to collector’s editions of sweet childhood memories (such as VW Beetle, Mini Cooper), they offer a lot to a target group that was sadly neglected in past years. Which makes the LEGO brand a product for life – for the whole family.
Lesson: Nurture the emotional bond between the customer and your brand – and keep in touch.

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