CMO 2.0 Conversation with Mads Nipper, CMO at LEGO

Written by on March 20, 2013 – 3:01 pm -

For a guy who broke in to LEGOLAND in Denmark with some friends back in September of 1978 when we realized it was closed for the season, being able to have a CMO 2.0 Conversation with Mads Nipper from LEGO felt like being a marketer in a playground.

From all the CMO’s I spoke with, Mads took perhaps the most unusual path to becoming a CMO. He started off as a fisherman, but then realized that the Danish weather was too cold for him, and fishing was actually way too hard. So instead, he went to business school, and started working at LEGO 22 years ago. Mads’ responsibilities do not only cover marketing, but also product development, innovation, and all of the commercial activities.

Digitalization and gamification of their consumer base, trends that have been accelerating since the first introduction of the 8-bit Nintendo machine in 1990, present both threats and opportunities for LEGO. Digitalization has affected all parts of their business, including marketing, retail, and the whole play experience. Marketing campaigns are now always integrated with digital dimensions, e-commerce has become a dominant retail channel, and LEGO so far has sold over 100 million video games developed in partnership with TT Games, which is owned by Warner Brothers.

A major innovation effort at LEGO right now is to bridge physical and digital play, as they believe that is where the future of play will be in the next 5-10 years.

One of the big changes that LEGO had to make as they became more digital was to accept that they could no longer strive for the same level of perfection that they had grown accustomed to in the analog and physical world — the speed of change in the digital world just does not allow that. That does not mean that they compromise on consumer perception and experience, and certainly not on child safety — they just became faster at new products iterations and allowed their corporate product development heart beat to increase significantly.

At LEGO they don’t consider themselves in the business of toys or games; they consider themselves to be in the business of play. That is why Mads uses terms like communicate, socialize, and play when talking about his customers, and not toys, or games. While the concept of being in the business of play was on the mind of the founding family, the Kirk Christiansen family, they did not articulate it explicitly until five to eight years ago as they were emerging from a business crisis. Starting to consider themselves in the business of play, instead of being in the challenging and non-growth toy business, proved to be a very liberating experience. The business of play is right up there with food and love — one of the most important activities in people’s lives.

At LEGO they feel like they never know enough about children and shoppers — agreeing that if they were to know everything there is to know about their customers it would lead to the company becoming arrogant.

While children may display very similar play characteristics across different cultures, the people who buy them LEGO products — the mothers, the teachers, the grandparents, etc. — do not — they are much more shaped by the local culture than the kids are. That makes for a complex marketing challenge for a global company.

LEGO is very much a substance brand — meaning that the essence of the brand is built around the experience and the longevity of that experience. In fact, LEGO products, which are not a cheap play experience, often get more than a 30-40 year lifetime — much more than most other products in the world. LEGO is also a legacy/heritage brand — one that many parents and grandparents grew up with as children. It stays consistent, yet relevant to modern times, by having a digital component as well as a storytelling component while also having a compatible building system and design style with the LEGOs from 20 years ago.

Next we switched to the topic of culture. As you can expect, the LEGO employee culture is a very  strong one — with people sharing a passion to make a positive difference in children’s lives. There is also a strong correlation between the internal cultural values and the brand values — and many employees consider themselves brand guardians, without being tasked to act that way by management.

While they do have a strong-shared beliefs system, they do not expect employees to memorize those. They think of their belief system as the smell in the bakery — if you like the smell of the bakery, you will know immediately that you belong. If you don’t, you don’t need a belief system to know that you don’t fit in. One of the ways the belief systems comes to life at LEGO is through storytelling. Storytelling provides the emotional bond that drives the world much more so than paychecks and orders. Employees are also encouraged to bend the rules and processes if it means improving the experience of a child.

LEGO is successful in multiple national and regional cultures because it appeals to a very ancient set of cultural traits — the need for humans to play and innovate. You can then add other cultural layers on top of that, like national cultural elements, or pop-culture elements (e.g., Harry Potter, Star Wars, etc.), but it is the deeper and more ancient human cultural connections that makes LEGO universally successful.

Another interesting aspect of play is gender based — boys like conflict play while girls like socializing. When boys see LEGO, they often ask themselves: What does it do? Can I kill anyone? Can I win over my enemy? Girls, on the other hand, are much more apt to ask themselves: Is it pretty? They don’t have the need for it to do something. They want to create platforms for social interactions.

Other things that we discussed include:

  • The importance of content marketing in the marketing mix.
  • The role of online communities and social media in the marketing mix.
  • How they do not focus on the quality of the building blocks or the games first, but the quality of the experience.
  • The differences between marketing LEGO in Western cultures vs. Asia.
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