Newsletter 3. Pivots that came to play🎮🪀🎈
HEY CONVERSION QUEENS 💸👑
As we enter the final month of the first half of the year, I'd like to share one of my favorite case studies about the importance of pivoting.
In all honesty, it's not enjoyable, but being able to make good decisions can often be the determining factor in the success or failure of your brand.
So, take a deep breath and let's dive in…
SIS, LET’S CATCH A CASE
A Playful Pivot
In the early 2000s, Lego faced a critical financial situation, teetering on the verge of bankruptcy with nearly $800 million in debt. Through strategic repositioning and innovation, Lego not only recovered but also surged ahead to become the world’s leading toy brand.
In 2003, Lego was grappling with declining sales, rising debt, and a fragmented product line that failed to resonate with its core audience. The brand faced competition from digital gaming and was losing its foothold as a timeless toy.
The massive debt was a product of overproduction, the dawn of the technological era, and ambitious overexpansion into theme parks. With new-aged toys coming to market, executives at LEGO felt pressured to start weaving more technology into their LEGO sets to compete with products like the N64, despite this being off-brand for them.
When Jørgen Vig Knudstorp took over at CEO, however, he immediately implemented a rebranding strategy to address audience engagement, overproduction, and budget mismanagement.
The plan started drastically, as Knudstorp initially cut over 1,000 jobs, sold off Legoland parks, and reduced global production by 50%. To strengthen their budget even further, he then went through company expenditures line by line to align design and manufacturing costs.
Lastly, and maybe most importantly, the LEGO rebrand focused on bringing the company back to its core operations to best serve its audience. This meant creating new and engaging product lines and partnerships that appealed to the two main audience profiles that engage with LEGO: a new generation of kids and adult fans of LEGO (AFOLs).
Dialing in on their audience preferences and intentionally developing products and partnerships that would resonate and engage their audience led LEGO to iconic collaborations like their first LEGO Star Wars sets that were released in succession with the original trilogy.
Now, the 2003 LEGO rebrand is known as one of the most successful rebrands in corporate history as they’re the biggest toy brand in the world with a market share of over 7.6% after growing in 2023.
POSITION YOUR BRAND TO WIN
1. 💸👑 Refocus On Core Values: Lego returned to what made it unique: high-quality building bricks and sophisticated playsets. This meant discontinuing less popular lines and refocusing on their classic product range. Identify your core value proposition and invest in what you do best. Abandon ventures that stray too far from your primary strength.
2. 💸👑 Build A Collaborative Culture Around Innovation: Lego embraced collaboration by involving consumers in product development. The company launched the Lego Ideas platform, allowing fans to submit and vote on new product ideas. Successful concepts were turned into retail products. Foster a culture of collaboration with your consumers. Allow them to co-create and influence product development, enhancing brand loyalty and ensuring product-market fit.
3. 💸👑 Seek Strategic Partnerships: Lego partnered with major franchises such as Star Wars, Harry Potter, and Marvel, providing themed sets that appealed to both children and adult collectors. Moreover, they expanded into digital media with movies and video games, increasing brand engagement. Leverage strategic partnerships and diversify into complementary industries to broaden your market reach and create new revenue streams.
BRANDS THAT MADE OUR SH/T LIST
MONEY MAKING ACQUISITION FOR DS LABORATORIES
DS Laboratories proves it's the sh/t securing a money making acquisition valued at close to $100 million, and I love to see iconic sh/t like this!
GLOSSIER MAKES BANK OFF ONLINE HATE
Glossier proves it's the sh/t by leveraging negative online reviews for their balm dot com formula in a viral social campaign that earned over 1 million views in its debut - whew!
OLIPOP'S BARBIE CAMPAIGN OUTSELLS EGGS
Olipop proves it's the sh/t with viral Barbie collab that's apparently outselling eggs within the Sprouts grocery chain. I call that egg-cellent performance!
INVEST IN YOUR BRAND, SIS
Thanks for reading, Queen.
