LEGO is not only one of the world’s most beloved children’s toy brands — it’s also a company that staged a dramatic comeback following several years of substantial losses and failed growth initiatives. Their turnaround story is remarkable on many levels1, but one facet that’s especially interesting is that their recovery was fuelled in part by reconnecting with their customers in unprecedented ways — and not just the school-aged ones.
Let’s start with a snapshot of what precipitated the change. LEGO had grown steadily for the first sixty-five years of its existence, posting profits and increased revenue year after year — only to plunge into decline and debt in the late 1990s. By 2003, sales were plummeting by 30% a year and the company was almost a billion dollars in debt. Rumor had it that LEGO was six months away from declaring bankruptcy2.

They’d been flailing for several years, attempting to replicate the success of other toy brands by following a well-worn playbook: diversify the product lines, open theme parks, build an in-house video game division… but the accepted conventions that had produced successes for other toy companies resulted in losses across the board. It appeared that “standard practice” was not only not working for LEGO, but was actually threatening to sink the business.

Fast-forward a few years, though, and LEGO had bounced back, and by 2014 (when The LEGO Movie came out), it was nothing less than a juggernaut. The company’s profits quadrupled between 2008 and 2010, and by 2015 their sales topped $1 billion in North America alone.

What changed?

In short, they tossed convention aside, found their weirdos, and focused on them relentlessly.

For LEGO’s recovery effort, the company turned to two groups of weirdos they knew mattered enormously. The first group goes by the acronym “AFoLs”: Adult Fans of Lego. These are the diehard collectors who were hosting (and attending) fan conventions3, devoting entire rooms at home to their LEGO projects, making stop-motion animations, and queuing up when new sets were released.
The executive team at LEGO did something a little odd for a toy company: they decided to invest significantly in their adult customers — the AFoL community4. LEGO staff started attending fan conventions and getting to know some of the grownups who build with LEGO bricks; in the process, they learned more about what appealed to adult fans and kept them not only interested, but investing significant amounts of time and money, into their LEGO hobby. They started consulting with adult fans on product research and running customer design competitions5. They even hired several as designers and community leads.
Jorgen Vig Knudstorp was promoted to CEO in 2004, at the height of the company’s financial crisis; by 2006, he had overhauled how all design direction was set6 , recruiting a whole team of new creative leads that included both adult fans of LEGO and design graduates who had grown up playing with LEGO. The result was a significant expansion of complex and sophisticated LEGO products, such as the plastic-brick replicas of architectural icons7 like the Sydney Opera House, Frank Lloyd Wright’s Fallingwater, and the Burj Khalifa.

Of course, adult fans weren’t the only weirdos LEGO needed to connect with: they also had to rethink their relationship with kids — arguably the most eccentric, passionate, and skeptical weirdos among us. They couldn’t hire kids to lead design teams, but they did the next-best thing: they established a customer research program they call “camping with consumers”8, where they embed ethnographic researchers into families to observe how kids play alone and in collaboration with others, to inform all of their product and marketing decisions.

Through “camping” with their customers, LEGO developed all-new lines like Ninjago (along with a companion TV show and movies) and the aforementioned Architecture series, while also trimming a huge number of unprofitable products and options — like superfluous brick colors — that were bringing down their margins and their popularity with their core customers. And the company regained its north star: supplying kids and adults with the materials and inspiration to bring their ideas to life.

There are many aspects of this turnaround story that resonate with us, but here are a few that we find particularly interesting, and that apply to just about anyone who wants to connect with their weirdos:

  • Don’t make your weirdos come to you — meet them where they are. You may not have LEGO’s resources for ethnographic research (or customers willing to host a researcher in their own home!), but attending customer-led events, building partnerships, and supporting your devotees in their own initiatives goes a long way to demonstrating that you’re committed to their success, not just your own.
  • Let your customers influence all aspects of your business. LEGO didn’t just survey customers about new product ideas: they listened deeply enough to what customers really wanted that they were able to tailor their marketing and creative, retail experiences, and product design with the things their customers value most. In the process, they re-thought every aspect of the company to align more closely with the needs and goals of their weirdos.
  • Quality is the foundation of customer loyalty. LEGO wouldn’t have been able to maintain their fan base through the tough years if their product weren’t meticulously well-designed, and iterated to perfection. The company’s motto is, “det bedste er ikke for godt” (“only the best is good enough”), and it’s clear they stand by it.
  • A narrower focus can result in more meaningful diversity. LEGO’s turnaround involved handing its theme parks over to an entertainment company, and cutting many unprofitable lines from its product catalogue — not to mention ignoring the people who insisted that a broad, diversified product portfolio is necessary. While it might seem scary to concentrate on the weirdos who totally get you, those people are the ones most likely to spend more with you, recommend you to equally passionate friends and colleagues, and help you identify future opportunities.

There’s much more to this story, of course — a book’s worth of additional context and nuance — but we love that LEGO’s comeback was at least in part the result of a weirdos-first strategy.

From where we stand, it makes perfect sense that the path to rediscovering that clarity of purpose was illuminated by cultivating deeper, more responsive, and more generous relationships with the weirdos who were every bit as committed to LEGO’s success as its most dedicated employees — the folks who were investing thousands of hours of their free time in designing their own creations, exchanging tips and videos online, and convening other fans together to bond over their shared passion.

This more relational, less transactional approach may not look like the kind of marketing and product research you’re used to, but it’s wildly effective. We’ve all tried mimicking another company’s strategy in the hope of replicating success — but behind every great strategy is a clear, strong alignment between a bunch of oddballs obsessed with making a product, and another bunch of oddballs just as obsessed with whatever they might be able to do with that product. That’s not something you can just copy and paste into your own three-year plan.

Once your weirdos find their weirdos, though? Don’t be surprised if you want to hire some of them — or at least take them camping.

Questions to ask yourself:

  • Who are our diehard, longest-lasting fans?
  • What’s our current relationship with them?
  • Are they finding “off-brand” uses for our products, or self-organizing in other ways? How might we support their efforts in non-intrusive ways?

    Footnotes

  1. 1So much so, there’s a bestselling business book on the subject.
  2. 2Per this Reddit thread from Mark Stafford, a LEGO designer since 2006.
  3. 3​​Like Brickworld, for instance.
  4. 4If you’re curious about the kinds of things Adult Fans of LEGO get up to, browsing through the LEGO Certified Professionals section of the LEGO website is absolutely fascinating.
  5. 5From a fantastic article in The Guardian:
    A year before James Surowiecki’s landmark book The Wisdom of Crowds was published, Lego launched its own crowdsourcing competition: originators of winning ideas get 1% of their product’s net sales, designs that so far include the Back to the Future DeLorean time machine, the Beatles’ Yellow Submarine and a set of female Nasa scientists.
  6. 6According to Business Insider:
    “Knudstorp led a charge to put creative control into the hands of hardcore fans of the brand rather than in those of top designers who had skills but lacked a real understanding of Lego's history.”

    One fun footnote here is that Mark Stafford, who wrote the Reddit entry referenced in an earlier sidebar, was one of the design team’s first two AFoL hires.

  7. 7The LEGO Architecture product range was introduced in 2008, and was a partnership with an AFoL named Adam Reed Tucker, a former architecture student who was making a name for himself in the AFoL community by designing and building LEGO models of well-known buildings.
  8. 8To give you a sense of scale: one article suggests that LEGO’s “camping with customers” research might be “the largest ethnographic study of children in the world.”