LEGO Marketing Strategy (Most Powerful Brand In The WORLD)

[00:00:00] Speaker 1: LEGO is one of the most loved and popular brands in the world. What started in 1932 from a small carpenter's workshop in Denmark has grown and evolved into the world's biggest, most adored, and probably most played with toy of all times. LEGO was even named Toy of the Century twice. And with over 400 billion LEGO pieces out there in the world, or around 62 LEGO bricks for every single person on the planet, well, pretty much everyone around the world has seen and built and played with LEGO at some point in their lives. LEGO certainly played an important part in my childhood, and that love and passion for those tiny, colorful little bricks has been passed down to my kids, whose favorite toy to play with today is LEGO. So it's hard to imagine just how close we came as a society to losing LEGO forever. And not just once either, but many times over the past 80 years as the company struggled with falling profits, changes in consumer behavior, and a series of catastrophically bad business decisions that were based on inaccurate assumptions about what the market really wanted. Fortunately, though, for all of us, they were able to save themselves and come back again and again through a series of clever and strategic business and marketing and branding decisions. And that's what this episode is all about. How LEGO was able to pull themselves back from the edge of disaster, figure things out, and rebuild their brand. But most important of all, the valuable lessons that you can learn from their success and their failure, and then apply directly to your business, to your idea, or to the message that you want to spread. And as a bit of a side note, at the end of this episode, I'll take you on a journey as I try to figure out once and for all what was the best LEGO set of all time. Feel free to take a guess at what you think it was, or feel free to share your favorite LEGO set of all time in the comments below. For now, though, let's kick things off with a very brief history on LEGO. Because to find out how we got here, we first need to figure out where we came from. The LEGO Group was founded in 1932 by Ole Kirk Christensen, and the name LEGO is an abbreviation of the two Danish words leg and got, meaning play well. The early years had the usual ups and downs of any new business, but it was in 1958 that LEGO patented its tube system that enabled the bricks to stick together in what they called clutch power. And this changed everything. That and their commitment to what they called the system, which enabled any LEGO block to fit and work with any other LEGO block. In other words, there were strict specifications and sets could be built on or added to and shared for generations. And this was the first big secret to their success, that system. Even today, a LEGO minifigure stands exactly four LEGO bricks tall, so it works no matter what set you're building. Which leads us perfectly to their next major breakthrough, the minifigure. Chapter two, me, I mean the minifigure. The second biggest breakthrough came in 1978 when LEGO introduced the first ever minifigure, the police officer. Minifigures, also commonly referred to as minifigs, well, they changed LEGO from being simply a toy that you played with to a toy that you could create stories and imagine entire worlds that you're a part of. These minifigs weren't just tiny pieces of plastic that you could move around and pretend to play with. Rather, to the people and the adults that played with them, they became like real people. The psychological term for this is known as anthropomorphism, and is what we as humans do when we assign human characteristics or traits or behaviors or attitudes to inanimate objects like tiny little LEGO people. But the real secret behind the transformative power of the introduction of the minifigure to LEGO came in its ability to sort of tap into one of the most powerful psychological branding and marketing principles of all time. And that is storytelling. Which really took off a year later in 1979. Chapter 3: Storytelling Some LEGO historians say that the real change and the most pivotal moment in LEGO's history came in 1979 with the launch of the LEGO Space series. And for me, as a kid growing up in the late 80s, well, it was all about those astronauts. Even though I wasn't born when they were first released, I still remember getting hand-me-downs of those tiny little astronauts in their red and white and blue and yellow spacesuits. There was that picture of a spaceship flying across a yellow planet and more often than not, the astronaut's helmet was broken or cracked in some way. But alas, the memories. [00:04:06] Speaker 2: From the farthest reaches of imagination comes a LEGO space set with all kinds of pieces to build all kinds of spacecraft, like this. I think it should have a big middle part and two little sides that stick out. [00:04:19] Speaker 1: And it was the space series and the castle set and figures that came out later in 1983 that remain one of the most classic and iconic designs of all time. And it was this pivotal moment that turned the casual LEGO consumer into a hardcore LEGO addict. Something that we as a society are still battling today. You're, uh, you're gonna hide my face, right? Yeah, yeah, of course. So tell me, how long have you been hitting the bricks? Well, man, I started young, flying with astronauts, but it didn't take long before I was hiding away in castles and getting hooked on firetrucks and anything else I could get my hands on. So what does the future look like for you? We have a saying in the LEGO support community that says, "Once you stack, you never go back." So right now, I take it day by day. Well, that's all you can do. And now back to our program. [00:05:02] Speaker ?: Chapter 4: The Good Times. [00:05:04] Speaker 1: It was the space set that basically paved the way for a couple of decades of smooth sailing for LEGO. And from the 1970s through to the early 1990s, LEGO grew at a pretty impressive rate, doubling in size every five years and going from revenues of $142 million in 1978 to more than $1.2 billion in 1993, with profits growing even faster. That was right up until 1998 when LEGO posted its first loss in history. [00:05:29] Speaker ?: Chapter 5: The Hard Times. [00:05:32] Speaker 1: 1998 was a hard year for LEGO. The company had just posted a loss, they had to lay off a thousand people, and they just couldn't figure out what was going on or what had changed. They knew that video games had started to take over and capture a large portion of their target market's attention, but their attempts to come up with something in order to steal that attention back just wasn't working out. And things were looking, uh, pretty sketchy. I mean, don't get me wrong, LEGO was doing their best to innovate and then innovate some more, but no matter what they did, things just didn't seem to click. But then they did something in 1999 that nobody saw coming, and it helped to put LEGO back on track to building a future that was out of this world. And what they did was make the strategic decision to partner with Star Wars. Chapter 6: Star Wars. When LEGO and Star Wars got together, the stars started to align, and it seemed like the perfect partnership. Both LEGO and Star Wars were family-friendly entertainment. Both were brands that crossed into different generations. And maybe most importantly of all, at least for LEGO, by teaming up with Star Wars, they were able to include even more elements of storytelling and character development into their toys. And they sold out of LEGO Star Wars toys that very first year. Which unfortunately isn't a good thing, because it meant there was a ton of unmet demand, and they simply didn't have the supply to fulfill it, which means a loss in potential revenue. But it gets worse. Chapter 7: Riding the Roller Coaster. The year later, in 2000, well, LEGO makes more Star Wars sets. But there's less demand for it, because there was no Star Wars movie released. Again, showing LEGO's frustrating lack of understanding about their business model. The cyclical demand of a product tied to another franchise. As well as the fact that they needed to pay out a significant portion of their revenue for the rights to use Star Wars to George Lucas and Lucasfilms. But then, another win. As they replicated their Star Wars strategy with the new Harry Potter franchise. And things were looking up again. But then, another miss with their Jack Stone series, which came out in 2001 and was discontinued only two years later. But then a win with their Bionicle series. But then, a miss with their TV show called Galador. Another miss with their Scala series aimed at girls. Another miss with their electronic toys aimed at toddlers. And yet another miss with their after-school education centers in Asia that never really went anywhere. And this is what things looked like for years. A win, then a loss, then another loss, then a win, then some more losses. And they just could not seem to figure things out. Like many businesses that get into this kind of trouble, they were simply doing too many things, and something needed to change. Chapter 8: Back to the Brick In 2004, LEGO finally seemed to get their act together and made two incredibly important strategic moves. First, they started cutting products. Realizing they were spread way too thin, with many of their lines losing the money, they cut the number of different pieces they manufactured from 12,900 down to 7,000. And they refocused their efforts on an internal campaign they called Back to the Brick, which focused on their core products. And they needed to return to this core value and the core pieces of their business that had enabled them to be successful in the first place. Next, they doubled down on story. Taking lessons from their previous Star Wars and Harry Potter campaigns, they realized the true power of story and launched LEGO Ninjago, the LEGO movie, and LEGO Batman. [00:08:40] Speaker ?: Finally. [00:08:41] Speaker 1: And by 2015, LEGO had become the largest toy company in the world. But more important than that, they built a movement, a community, and a tribe of LEGO lovers. A tribe of LEGO lovers, I might add, that spends around $8.2 million a year on products, merchandise, movies, theme park visits, and pretty much anything else LEGO can throw at them. Which leads me to my quest to try to answer once and for all what was the best LEGO set of all time. So I spoke to friends, searched the forums, and trolled the innermost subreddits. But in the end, I was left with more questions than answers. And which set was truly best came down to what group you identified with, and what your personal preference was. For example, to the purists, there's not much better than a mint-conditioned King's Castle from 1984, which could be worth around $2,600. The collectors, however, had a different opinion, and it was a little more varied, as speculating on LEGO values is kind of risky business. That said, there's a minifigure out there called Mr. Gold, who's worth around $1,700, and there were only ever $5,000 produced. For everyday fans of LEGO, though, and people who grew up playing this toy, the best set is wildly subjective. Some people love LEGO Batman. That one's the best. Harry Potter fans, on the other hand, love Hogwarts. But the one LEGO set that just seemed to keep coming up again, and again, and again, was the Ultimate Collector Series Millennium Falcon. Product ID: 75192. A 7541-brick masterpiece that I thought would be absolutely amazing to build for you here on this video. But I ran into two problems when trying to order it. First, it was sold out. But that wasn't nearly as big of an issue as was stumbling across the fact that the Guinness World Record attempt at building this masterpiece was a staggering 16 hours, 10 minutes, and 29 seconds. And unfortunately, he missed a brick, so the record didn't even count. So instead, I ordered a different set. A more Adam-friendly set. And something I'm thinking I can probably put together a whole lot faster. Now, I just need to wait for it to arrive. All right, the day has come, it's finally arrived. The Mini Falcon. Something that's sure to provide minutes and minutes of quality family entertainment. But rather than bore you by watching me try to put this thing together, I'm going to take it inside the house, let my kids build it, and be back in, I don't know, 15 minutes. I mean, there's 101 pieces, so probably shouldn't take that long. And now, through the power of editing, well, let's get this thing built. And we're done. Ah, not bad. Pretty cute little toy. Of course, building it is just half the fun. Playing with it after is really what it's all about. As you probably know by now, Lego isn't just a business, but it's a brand that people emotionally connect with. Sure, there's elements of nostalgia in there that are hard to replicate if you're just starting out today. But other elements of success, like trust and joy and staying true to your core values, well, those are available to everyone. That, and making sure that you're following good business practices so your company actually survives and you have a chance to make an impact. So, to see how another one of the world's most loved brands and businesses did this, make sure to check out the video that I've got linked up right here on Disney's billion-dollar marketing strategy. So, make sure to check it out now, and I'll see you in the next episode. When I think of Disney, the first thing that comes to mind is fun. Excitement. Family-friendly entertainment. And maybe even a little bit of magic. Oh yeah, and people, lots and lots of people. But the one thing that never really