Social Media Case Study: LEGO CLICK

Walk Into The Light
Image by Kaptain Kobold via Flickr

LEGO is a brand that many people are very passionate about, a brand people love and we’ve written before about how they use segmentation to engage their consumer base from children to enthusiasts in an innovative way. Now they have continued their innovative approaches to engagement and embraced social media. In a big way.

They have launched LEGO CLICK, an online community that brings together innovators, designers, artists and creative thinkers to develop new ideas related to toys. The site is designed to bring together ideas in written form, images and videos. They want to capture and catalogue ‘lightbulb moments’, ideas that are relevant to toys and to the market LEGO serves.

Unlike other ideas communities, LEGO CLICK does not (at least not yet) allow users to rank and rate the ideas. It merely allows you to suggest your idea or to share ideas that you see and like or are interested in. What makes this site particularly interesting, though, is its use of Twitter, Facebook and Flickr as a way of generating content for the site and promoting participation.

The LEGO CLICK community is a great example of the hub-and-spoke model of social media engagement. Users can contribute their ideas by tweeting with the hashtag #legoclick. They can contribute images by tagging their Flickr contributions with the same tag. And they can suggest ideas by video by tagging on YouTube in the same manner.

This is an interesting use of social networks to drive content to a community. In parts it is not dissimilar to the California Governor’s use of Twitter to harvest ideas for MyIdea4CA in 2009. It relies on contributions from users of other social networks and then brings them together in a single hub where different types of content from different sources meet.

What will be interesting to watch as this site develops is the amount, and the relevance of content that is created and added to LEGO CLICK. Currently there is a lot of content being dragged into the site that is discursive about the concept rather than the kind of ideas that the site is designed to harvest. It is getting a fair bit of content that is more like this particular blog post than an idea of lightbulb moment. This is one of the real problems with using tagging and a feed from other social networks to populate any site, but an online community in particular. You could end up with a lot of irrelevant content.

One of the things that MyIdea4CA did, and that it will be interesting to look for as LEGO CLICK develops, is to use rating and even commenting in the community as a way of sorting and prioritising ideas. The most popular or interesting ideas are likely to get the most votes or comments. And so these will rise to the top on the site, leaving the less relevant comment much further down.

But even without this kind of feature, LEGO CLICK is an interesting site and itself an innovative use of social media. Really driving the hub-and-spoke engagement model. Now we just need to watch to see what happens.

Read more of our Social Media Case Studies

Our top five posts in April

At FreshNetworks we aim to bring you the best posts in social media, online communities and customer engagement online. In case you missed them, find below our top five posts in April.

1. What Susan Boyle teaches us about social media

In less than a week, a church volunteer from a village in Scotland became the most viral video ever online. It was the most popular topic on Twitter, the most viewed video on YouTube and one of the most discussed topic online and offline across the world. What made this video particularly interesting is that, ostensibly at least, it wasn’t designed to be a branded viral video. It was popular for a simple reason - the content was good. Of course making good content (and indeed predicting what content might be good) is not as easy as we might hope.

2. Engage different consumers in different ways - why segmentation is key

The most popular of our posts from the Marketing 2.0 Conference in Paris looked at how and why segmentation adds value to marketing and to the way you engage your customers. We look at the case of LEGO and the segments that they use, how they deal with each of these segments separately and the value this brings to the business.

3. The best market researchers to follow on Twitter

Twitter was a popular topic again in April, with more people using it and more people talking about it. Finding the appropriate people to follow can sometimes be difficult, which is why this post (based on a poll of Twitter users by Research Reinvented) is popular. The top market researcher’s to follow on Twitter as nominated and voted for by other Twitter users (I’m in the list @mattrhodes).

4. Top 20 UK marketing blogs (numbers 11-20)

The first of two posts that listed the top 20 marketing blogs in the UK according to Ad Age. There are some great blogs in there and Charlie has built an RSS feed of all of the blogs in the list. As with all listings like this, things change. The good news for us here at FreshNetworks is that since this post we’ve moved from the 20th to the 10th best marketing and media blog in the UK. Happy times!

5. The Net Promoter Score and the value of Promoters

Many big brands and organisations use the Net Promoter Score as a way of measuring how happy their customers are with them. Rather than asking this question directly, it asks them whether they would be prepared to refer the brand to a friend. This requires a deeper level of thought and commitment and is seen by many as a better measure of satisfaction. This post looked at two case studies (one from LEGO and another from US network providers) to show the real, revenue value of Promoters and why businesses should focus their efforts on them.

The Net Promoter Score and the value of Promoters

Whether you use the Net Promoter Score or not yourself, you will undoubtedly have come across this ‘single number everybody needs to know’. On one level it is a calculation that takes into account how strongly people would be likely to promote your brand and returns a single score, expressed as a percentage. On another level, it is an entire approach to business and interacting with your customers that leads to the calculation of this score.

The score itself is what most people are interested in - the difference, expressed in a percentage, between those people who are very likely to recommend your brand and those people  and the beauty of it is that it can reflect the different levels of engagement and loyalty that customers feel to different types of brand. A luxury hotel chain, for example, should be expecting a Net Promoter Score of about +70%, an airline shouldn’t expect one higher than +10%, and a cable TV company needs to prepare for a score below -5% (yes, scores can be negative).

At the Marketing 2.0 conference we were lucky to hear from both Richard Owen of Satmetrix (the people behind the NPS) and Conny Kelcher from LEGO (a fervent user of the NPS). Both were able to highlight exactly what the benefit of Promoters is, in hard cash.

Conny’s example looked purely at revenue generated by the individual themselves, and clearly showed that Promoters spend more than Detractors and so it makes good business sense to improve your NPS. Looking at expenditure on LEGO, over the same time period customer spend was as follows:

  • Promoters spent 208 Euros
  • Fence Sitters spent 165 Euros
  • Detractors spent 136 Euros

So, for LEGO, a Promoter will spend 53% more on their product than a Detractor.

Richard, quoting a study of network providers in the US, looked at this in more detail. He considered not just direct spend that the individual makes on the product, but the total contribution they make to the brand - including from recommending others (or indeed otherwise). When looked at like this, the average lifetime value for the network providers was as follows:

  • Each Promoter brings an additional $693 in revenue
  • Each Detractor is responsible for $1,495 in lost revenue

So the difference between a Promoter and a Detractor was almost $2,200. For Richard this showed that sometimes it can make business sense to buy your Detractors out of their contract with you. Overall it shows that Promoters are a category worth keeping and worth growing.

Read all of our posts based on the Marketing 2.0 Conference here.

  • NPS is Growing Up (adaptivepath.com)
  • Net Promoter Score: an operational tool to measure customer satisfaction (startuplessonslearned.blogspot.com)

Engage different consumers in different ways – why segmentation is key

Red 2 × 4 LEGO brick from the LDraw parts libr...Image via Wikipedia

One of the first speakers at the Marketing 2.0 conference in Paris was Conny Kalcher from LEGO, and if anything her presentation was an example of how good segmentation and really understanding your different consumer persona types can make a real difference to a successful social media strategy.

At LEGO, the core target is a young boy, and they group their customers into six groups

  1. Lead Users - people LEGO actively engage with on product design
  2. 1:1 Community - people whose names and addresses they know
  3. Connected Community - people who have bought LEGO and also been to either a LEGO shop or LEGO park
  4. Active Households - people who have bought LEGO in last 12 months
  5. Covered Households - people who have bought LEGO once
  6. All Households - those who have never bought LEGO

These six types of customers are defined based on the strength and depth of their relationship with the brand - from having no experience with the brand to being actively involved in it not just as a product but as a business. There are fewer Lead Users than there are Covered Households and when volume and closeness to the brand are combined like this it lends itself to neat segmentation of the marketing (and indeed the social media strategy).

Indeed LEGO uses a different approach for the top three segments than for the bottom three. This is the cut-off point at which customers become truly engaged. They are not just entering into a transactional relationship, but they actually care about the brand. LEGO uses social media to work with these three segments - from co-creating online with the Lead Users to engaging the Connected Community and 1:1 Community in online communities and social networks. These are, perhaps, the easiest and best people to engage and empower online and so the most efficient use of social media. They are the people LEGO wants to feel special, and the people they want to test new ideas and products with. They are also the people to keep engaged and close to the brand - the people who will spend most and be your biggest advocates.

Proper customer segmentation and persona profiling helps you to understand how your customers differ and how their needs differ. Social media and online communities let you treat different people in different ways and also to engage with them in the way they want to be engaged with.

Read all of our posts based on the Marketing 2.0 Conference here.

  • Community Marketing: three things to do differently (thecustomercollective.com)
  • Some brands will love the new Facebook (sharemarketing.wordpress.com)

Co-creation 4: New product co-creation

So far we have looked at two examples of co-creation that change only the customer’s own experience of the product (mass customisation and real-time self-service), and one example where the customer helps to change the way a product is delivered (service redesign). But when many of us talk about co-creation and innovation we think rather of new product development.

Getting insight from customers to develop new products is not new - doing market research to identify needs and trends in the market, conducting focus groups to test reactions to concepts and ideas, or asking for feedback on existing product to identify areas for development. But all of these approaches to innovation are very much held and driven by the brand. They watch what the customer does, or asks them what they think, and then go away and develop a new product that they think meets these needs.

Co-creation is very much customer-led. Brands and customers work together to develop and design new products. The results can be very powerful and brands from Lego to Xerox have worked with customers in this way to create new products. You can read the story of Lego Mindstorms here.

Involving customers in this way involves some significant changes of process and attitude at the brand. Traditionally the customer sits outside the firm - they purchase the product and their only relationship with the firm is, essentially, a transactional one. Where new product co-creation is concerned, customers are involved on a much deeper level. Working with the brand to develop and design products which they may not even want.

Herein lies the significant difference between the types of co-creation we have seen so far. In each of the previous three types, the customer’s motivation for co-creating was that their own particular product or experience would be improved. In new-product co-creation, customers are working to improve the product overall, and to improve the offering the brand has to make to all customers. This works for three reasons:

  1. customers want to help and work with brands they know are listening to them
  2. customers want to solve problems
  3. all to often the solution or idea you need will be really simple to somebody else

These motivations are common to anybody working in customer-led innovation and co-creation. They’re also the same motivations we see at FreshNetworks for participation in online communities. In fact, online communities are a great way to co-create new products with your customers - they allow you to work together on a problem with people who care about your brand and in a space where they can easily share and evolve ideas.

  • Co-creation 1: Mass Customisation
  • Co-creation 2: Real-time Self-service
  • Co-creation 3: Service redesign
  • Co-creation and Innovation - the ‘We’ Experience
  • Open Innovation