Why we won’t let go of Lego

Lego provides a great case study of how word of mouth can rejuvenate a struggling brand. In January 2004 the iconic Danish toymakers reported a deficit of Dkr1.4bn (£144m) and debts of more than Dkr5bn. However, last month they announced 2008 net profits had soared 32% to DKr1.35bn, with sales up 18.7%. What happened in between was that the company rediscovered the power of listening to their customers and invested in nurturing the advocacy and co-creation already brewing in social media.

By the 90s, company spokeswoman Charlotte Simsonsen says, “we’d got into movies, clothes, software games, own-brand stores, theme parks from Windsor to California [...] We’d moved far, far away from what we did well”. But Lego’s success was always rooted in simple, consumer-led creativity, so the brand pared things back down, gave their blocks renewed digital life with factory.lego.com, and added that essential social element with a series of Lego games created by Brit designer Cephas Howard.

However, their real coup lies in how their customers themselves have driven the revival. From the vogue for Lego reconstructions to testimonials from fervent fans who have formed passion groups online, Lego has really been resuscitated by peer to peer word of mouth. It’s something Lego have recognised in their social media strategy, which was discussed in Paris’ Marketing 2.0 conference yesterday and aims to build on and inspire that independent advocacy. They’ve also ensured that the company is internally aligned with a social, conversational way of thinking – you can see Jake McGee explaining the work he did for the company here.

Read more from the company’s viewpoint in Jon Hedley’s excellent Guardian piece.

Brought into the world on Wednesday, April 1st, 2009 and filed under Uncategorized.