For 90+ years, the LEGO Group has been owned by the Kristiansen family in Billund, Denmark. What started as a wooden toy workshop in 1932 would grow into one of the most recognizable toy brands in the world after it started making injection-molded plastic bricks. Part of LEGO’s success comes from its commitment to its company values: fun, creativity, and inclusivity. These values are the foundation of the LEGO VIP rewards program and are built into every promotion and reward it offers.
· Customer Analytics, Insights, and Metrics
· Offer, Incentive, and Reward Design
Mark Johnson, CEO of Loyalty360, spoke with Jason Whiting, Director of Membership at the LEGO Group, about the brand’s recent award presentation and recognition at the Loyalty Awards.
Good afternoon and good morning. This is Mark Johnson from Loyalty 360. I hope everyone's happy, safe and well. I want to welcome you back to our Loyalty 360 award recap series. In this series, we hear from award finalists that were part of the 2023 Loyalty Expo in Orlando, Florida. The LEGO Group was a finalist in the customer analytics insight metrics category, as well as the offer, incentive and award category. They both received the Platinum Award, which is the highest award for each category, and as part of that, they were also recognized as a 360 degree award winner, achieving gold in that category. Today, we have the pleasure of speaking with Jason Whiting. He's the director of membership at the LEGO Group. Jason, how are you today doing?Jason Whiting:
. So, at the LEGO Group our rewards category is extensive and it's very much targeted at all of our users across passion points, themes, age, price range, etc. And there's a lot of work that we had to do to prove the value of those rewards and using some industry metrics. That said, if we can get somebody to redeem, we should be able to increase lifetime value by 30%. That's part of the reason why we changed the program. So then in the insights and metrics category, our focus really was we were presenting our engagement scoring piece, and the engagement scoring is really how we created some of the proof of concept behind a lot of the rewards and benefits that we created. So we actually took an approach of starting with what are the aspects of our program that would really drive engagement, not sales specifically, and we got lots of agreement within the organization that the mechanics that we in different benefits that we were looking at were indicators of high levels of engagement. Then we created an entire scoring model that rated all of our users on a scale from 0 to 50 and we used that to indicate whether they were low, medium, high or very highly engaged. And once we got all very much aligned on that we then applied that model to understand the value of those members as they moved through that and really that was the proof into the work that we were doing that what we saw is, while average order value might be lower between low engaged and medium engaged, so medium would have a lower average order value what we also saw is that group had a much higher lifetime value and it showed that the different engaged mechanics really moved people through that and actually the number one mechanic that moved people up that ladder was reward redemption. So it's not only how we identify what are the right rewards and what they can do to move the needle on the level of engagement. It's also to show that there's real value to the company behind that and we're really proud of that work.Mark Johnson:
Aside from numerous awards that you have received as part of the LEGO group, what are one or two things that you are most proud of when it comes to your brand's customer loyalty program and the program efforts?Jason Whiting:
Yeah, thanks, I would say. First, it's been the monumental shift in our strategy that we laid out in 2019 and moving from a very transactional program to a more engagement and reward this program. And there was a risk in there and it wasn't really smooth sailing but, as I shared, it was really paid off. Recruitment, engagement and redemption are way higher than projected and it's had a significant business impact, I would say. The second part is really how much we've expanded our offering in line with our brand values. So we're an emotional brand and we need to provide the benefits that are beyond that transactional nature. So we've worked across the entire company and directly with our users to identify what are the things that really resonate with them beyond, like I said, that, transactional money off experience and, I think, really being able to build that and get the rest of the company company behind it. It's been really powerful and really inspiring for me and the entire team.Mark Johnson:
And is there a piece of advice you would share with a similar brand or someone within our brand who's looking to redo or enhance their customer loyalty efforts, their customer loyalty strategy, especially when it comes to having the right offer, incentive and reward approach?Jason Whiting:
Yeah, so I think this is a good one. I've said this in a lot of these conversations with Loyalty 360 plus in other places too, so anybody's ever either read something that I've quoted or been in heard one of these interviews. I pretty much say the same thing. I'm a huge advocate for making sure your programs have strong brand alignment. Our businesses are based on that brand foundation and customers. They come to us not because of our loyalty programs, but because it's something that resonates with that brand, whether it's a convenience, price, quality carrying, inclusivity or, like us, you know, fun and creativity that brings people in. And if we don't have programs that reflect that and create rewards and benefits that really embrace that, we're going to be misaligned with those values. And our job is to strengthen the relationship with our users and I think making sure that we have that type of brand alignment and then building on those foundations of our brands are really important to the success of any of our programs.Mark Johnson:
Now, briefly, what is next? What is the next new exciting thing for the LEGO group when it comes to strengthening their customer loyalty program?Jason Whiting:
So it's a really great question and one I'm not quite ready to answer at this moment. All I can say is loyalty is more important to our brand than ever and we understand especially coming out of COVID and changes in shopper behavior and economic a macroeconomic issue changes that loyalty plays a massive role. Our company has headed into its 100th anniversary in 10 years from now and we know how important it is to build lasting relationships with our fans that actually even span generations. So I can't really reveal everything that's going on, but I would just say keep an eye on this space over the next year or two and you'll see some big changes coming.Mark Johnson:
Jason, thank you very much for taking time to talk with us today. Congratulations to you and the LEGO group for all your success at the 2023 loyalty 360 awards. You're looking forward to hearing more from you and your program in 2023. Fantastic, thank you, and thank you, everyone, for listening. Make sure you join us again for another one of our loyalty recap series coming up soon. Have a wonderful day.