Latest / The Marketing Funnel Podcast with Fexingo: Awareness, Interest, Decision, and Action Stages / How Lego Rebuilt Its Marketing Funnel Through Co-Branding
Transcript
- Lucas: So Lego sold over seven hundred million dollars worth of Harry Potter sets last year. Let me say that again — seven hundred million dollars, just from one licensing partnership. Luna: That's wild. And it's not like Harry Potter is new. The books ended almost twenty years ago. The last movie was 2011. Lucas: Exactly — that's the point. Lego didn't just ride a wave. They built a funnel that keeps pulling people in decades later. And they did it through co-branding, but not the lazy kind where you slap a logo on a box. They actually integrated the stories into the product. Luna: Right, because a Lego Hogwarts isn't just a generic castle with a sticker. It's the Great Hall, the Chamber of Secrets, the forbidden forest. They recreate specific scenes. Lucas: That's the awareness stage right there. When Lego announced the Harry Potter line back in 2001, it wasn't just a press release. They had kids and adults who already loved the books seeing those iconic moments in brick form. And then social media amplified it — people posting their builds, comparing sets. Luna: So the awareness is driven by nostalgia and fan communities. But what about the interest stage? How do they keep people from just scrolling past? Lucas: Interest is where the co-branding really matters. Take the Star Wars Ultimate Collector Series — the Millennium Falcon that's over seven thousand pieces. It costs eight hundred dollars. That's not a toy for a kid. That's a display piece for an adult fan. Luna: And that signals to the market: this is a serious collectible, not just a playset. It raises the perceived value. Lucas: Exactly. And by partnering with a franchise as huge as Star Wars, Lego gets a built-in audience that already has emotional investment. They don't have to convince you that space battles are cool. They just have to show you that you can build them. Luna: Which brings us to the decision stage. How does Lego get you to actually buy? Lucas: Part of it is scarcity. Limited edition sets that are only available for a few months — like the Nintendo Entertainment System set. It was out of stock for most of 2021. People were paying double on the secondary market. Luna: That creates FOMO. But also price anchoring — you see a fifty-dollar Star Wars set and think, that's reasonable compared to the eight-hundred-dollar one. Lucas: Right. And then retail exclusivity. Some sets are only sold at Target, or only at Lego's own stores. That pushes people into a specific channel where they're more likely to impulse-buy a small set too. Luna: And the action stage — the purchase itself. But Lego doesn't stop there. They have the Insiders loyalty program. Lucas: Yes — Lego Insiders gives you points for every purchase, which you can redeem for exclusive sets or early access. That's the retention loop. And they also have the Lego Ideas platform, where fans submit designs and vote on which become official sets. Luna: That's genius because it feeds back into awareness. When a fan-designed set gets produced, that fan's network shares it. It's a self-sustaining cycle. Lucas: And it's completely organic. Lego doesn't pay for that distribution. The fans do it for them. That's the holy grail of a marketing funnel — when the customer becomes the marketer. Luna: But I want to push back a little. Isn't there a risk of brand dilution? If Lego partners with everything, doesn't it lose its own identity? Lucas: It's a real concern. And Lego has had missteps — remember the Lego Movie? That was their own IP, and it worked brilliantly. But if they leaned too hard on co-branding, they could become just a factory for other people's stories. Luna: So how do they balance it? Lucas: They keep a strong core of original themes — Lego City, Lego Friends, Lego Technic. Those are always available. The co-branded sets are typically limited time or higher price point. That way, the brand identity stays anchored in creativity and building, not just in whatever movie is out. Luna: Speaking of the creative side — this is a marketing show, and if these conversations have sparked something you've actually used in your own work, that's the kind of value we hope you get. If today felt worth a coffee to you, there's a link — it's buy me a coffee dot com slash fexingo. No pressure, just good to know when we hit the mark. Lucas: Yeah, that kind of support is what keeps the show ad-free and lets us dive into this level of detail. Appreciate anyone who tosses a couple bucks in the virtual jar. Luna: Alright, back to Lego. You mentioned the adult fan base — AFOLs, as they're called. How important is that demographic to the funnel? Lucas: Hugely important. AFOLs account for about twenty percent of Lego's sales, but they drive a disproportionate amount of social media content. They post reviews, timelapse builds, custom modifications. That content is pure fuel for the awareness and interest stages. Luna: And Lego nurtures them with exclusive sets, conventions like BrickCon, and the Lego Ideas platform. It's a classic high-value segment play. Lucas: Exactly. And they do it without alienating the core kid audience. Because kids see adults building the Death Star and think, 'I want to do that someday.' It creates aspiration. Luna: So the funnel isn't just linear. It's intergenerational. A parent who loved Lego as a kid buys it for their child — and then buys the big Star Wars set for themselves. Lucas: Right. And that's where the numbers get really interesting. Lego's revenue grew from about four and a half billion dollars in 2012 to over nine billion by 2025. That's a compound annual growth rate of roughly six percent, in a toy industry that's basically flat. Luna: How much of that is attributable to co-branding do you think? Lucas: It's hard to isolate, but analysts estimate that licensed sets account for about forty to fifty percent of total sales. So it's huge. But again, it works because Lego maintains quality control. They don't just license the brand — they design sets that are faithful to the source material. Luna: Which brings us back to the funnel's top. When a new Star Wars movie comes out, Lego has sets ready within weeks. That timing is everything. Lucas: Yes. And they also use teaser campaigns — releasing a few images of an upcoming set months in advance. That builds anticipation and gives fans something to talk about. It's pre-awareness, almost. Luna: So the entire funnel is engineered: from the teaser, to the detailed reveal, to the limited availability, to the purchase and loyalty program. And then the cycle repeats with the next set. Lucas: Exactly. And one more thing — Lego uses its own retail stores as a funnel tool. The stores have play areas where kids can build before buying. That's a direct interest to decision conversion point. Luna: It's almost like a physical version of a free trial. You get to try the product before committing. Lucas: Precisely. And it works because the product itself is engaging. You don't need a sales pitch when a kid is already building a spaceship. Luna: One thing that strikes me is how Lego has avoided the trap of over-commercializing. They still feel like a creative toy company, not a marketing machine. Lucas: That's the art of it. They've built a funnel that feels like fun. And that's the hardest thing to do in marketing — make the funnel invisible. Luna: So if you're a marketer listening, what's the one takeaway? Don't just slap your brand on a partnership. Actually integrate it into the product experience. Lucas: And don't forget the aftermarket. Lego's secondary market — people reselling retired sets — that's free marketing. It keeps the brand relevant even for sets that are no longer in production. Luna: Alright, I think we've built a solid case. Next time someone tells you co-branding is lazy, point them to Lego. Lucas: Yeah. And maybe also point them to buy me a coffee dot com slash fexingo. Just saying. Luna: Low-key plug. I like it. Lucas: Alright, that's a wrap on Lego's marketing funnel. Next episode, we're looking at a completely different angle — how a B2B company built a funnel that actually works. See you then. Luna: See you.