Over recent years, Lego has not been short of success, with a turnaround strategy seeing it top the Brand Finance Most Powerful Brands list, break the box office and, most recently, commit to moving away from being “just a toy manufacturer”.
You’ve said the brand wants to be a “small giant” rather than a “great dinosaur”. What does that mean and how do you plan to achieve that?
You have choices as a brand. We are in construction toys, which is a sub segment of the toy business, so we could go into other category of that, such as vehicles or baby toys or things like that.
We’re not interested in that. We’re just interested in being very good at that category we’re in. We try not to spread out our efforts to be experts in everything, but be much more focused and very good at the particular thing we do.
What is Lego’s target consumer now and how has that changed over the last 10 years?
It’s kind of now age 4 to 11 and includes pre-school boys and girls. We went very narrow on the boys in the turnaround and then we broadened it out again to girls.
Lego wants to become a “master of 360 marketing”. What does that strategy involve and how will it play out moving forward?
When we talk about 360 marketing, we talk about when we plan our communication strategy making sure that it covers all the instances where you might meet the brand. It’s on Lego.com, brand stores, Legoland, content, TV series, print media, TVCs, etc. They’re all the touch points we have for the brand and all the media we have, and we orchestrate that so it’s one story.
It doesn’t mean that we repeat everything in the same way, but you can say we treat the product lines as a brand and make sure that they have aligned expression and there is a seamless consumer journey from one touch point to the other. As a kid you know, “I can play with a toy, I can also play with a video game – the same characters are in there but it’s a different experience. I can go to Legoland and there may be a ride that links up to it. I can buy the book.”
We don’t say to the kid you need to do this, this and that – the kids can find their parts of the story or their part of the characters and how they would like to engage.
It’s not just a traditional campaign, it’s also experiences that the kids can actually engage with and be part of and tell the stories. They can engage on various levels with these franchises.
You’ve talked about how the “System in Play” structure is rooted in what you do. What does that refer to?
System in Play means that you can build the bricks together. If you buy one box of Lego, it will fit with another Lego. If I bring my Lego that I got as a child and I drop it on the floor in the living room, it will work with the Lego that I buy today. It’s all in a system.
It means that we have a number of bricks and we don’t just continue to develop new bricks and new bricks and new bricks. We have I think 7,000 different bricks today, but you could just continue to develop new bricks and new bricks and new bricks and then the system would disappear because there would be special bricks. It’s about making sure that as a consumer, you know that if you buy this today, it will work with this tomorrow.
So does that system fit into your goal of being a “small giant” – focusing on what you’re good at rather than expanding too far?
Yes. It sets the frames of where we should go innovation wise so we don’t just do everything and then the system underneath cannot hold up to that. That’s the key to our success, that system. It also means that whenever we bring out new boxes of Lego, consumers can understand it, they can recognize it. It’s not different from what they know.
Lego has been vocal about the importance of co-creating. How do you get your employees, marketers and designers on board with that type of strategy?
We have a little department that have become experts in it over the years. By not making it part of a big core machine where it becomes kind of a side show, but actually having it as a separate capability, it has worked because this group has then been able to demonstrate the value of the community by bringing them in and saying: “Here’s some train enthusiasts, they would like to work with you train designers in Lego.” Then you make a project and develop something together. By doing experiments and trying things out over the years, it has been built as an internal competence which is now being embraced by the whole company.
I think for anybody to start out doing this, don’t do it as somebody’s responsibility at the top. Make sure that it has a life and there are people focusing on that agenda and they can try out things and demonstrate the value.
You involved co-creation in the Lego movie last year. Is that something that will continue in the future films?
We would like to do it. We don’t know what the form should be, but it worked really well for everyone so there’s a great openness towards it, but we don’t know specifically how we will do it.
On The Lego Movie, how big was marketing’s role in its overall success?
It was a combined effort between Warner Bros, who are experts in movie launches, and then our marketing team collaborating with them. Both teams worked together on an optimal marketing and communications plan for it.
The newsworthiness of the first film was obviously big. It was a great partnership, and there’s a lot to be said for marketers who make partnerships with other types of companies that have other expertise. The synergy of that becomes much stronger than anything you could ever do on your own.
As a consumer-focused company, you’ve said that Lego must hear and act on bad news as well as the good. Does that mean being proactive to prevent crises or having a procedure in place for when they occur? How do you monitor bad news?
It’s more crisis, it’s day-to-day. We ask the question over time: “Would you recommend Lego to a friend or family?” And then we get scores, but we also get answers constantly from consumers on most of the things we do. From that and from our real-time media centre we listen to the voice of the consumer a lot. We also have a contact centre where our consumers call in and complain. We have our ears to the ground, both in the sense of a potential crisis but also day-to-day and wanting to be proactive.
The motto of our founder was: “Only the best is good enough”, and that runs in what we want to do. We want to constantly improve, so that’s the spirit of company. If you are constantly working on improving what you do, then you can avoid many big disasters, because you build up loyalty and its transparent to people how what the company says, they do. If you over time constantly try to live up to that, if something goes wrong your audience will be more forgiving because they will realize not everything can go right. Then you just have to act on it quickly.
You can see it as putting money in the bank, being responsible on a daily basis, and then hopefully when you hit a crisis you will be able to, with that mindset, quickly turn it around.