Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / Connecting the Bricks of Successful Loyalty: How LEGO® Built the VIP Rewards Program on Fun, Creativity, and Inclusivity
Transcript
- 0:05Mark Johnson: Good afternoon, good morning.
- 0:06Mark Johnson: This is Mark Johnson from Loyalty 360.
- 0:08Mark Johnson: Hope everyone's happy, safe and well.
- 0:09Mark Johnson: Welcome back to another edition of our Leaders in Customer Loyalty series.
- 0:13Mark Johnson: In this series we speak to brand leaders about what they are seeing and hearing on the front lines of customer channel and brand loyalty.
- 0:19Mark Johnson: Today we have the pleasure of speaking with Jason Whiting, the director of membership at LEGO Group.
- 0:24Mark Johnson: How are you today, Jason, doing well, thank you.
- 0:26Mark Johnson: Great, good to connect with you.
- 0:29Mark Johnson: Great seeing you a couple of weeks back.
- 0:30Mark Johnson: I hope the flight back to Europe was uneventful, good, good.
- 0:37Mark Johnson: We'd like to start these on a more personal level.
- 0:40Mark Johnson: I know we've spoken with you in the past, but we'd love to know a little bit about you, kind of what you do at LEGO, maybe your career leading up to LEGO and, a fun fact, a passion you may have outside of work.
- 0:50Jason Whiting: Okay, cool, yeah.
- 0:52Jason Whiting: So I got my career.
- 0:54Jason Whiting: I started my career in retail.
- 0:55Jason Whiting: I was in there for about seven years, followed by seven years in the agency world.
- 1:00Jason Whiting: Then I was a head of marketing for regional telecom for seven years before joining LEGO Group 10 years ago.
- 1:06Jason Whiting: So that very much dates me.
- 1:08Jason Whiting: Then with the LEGO Group 10 years, heading up membership for the past five, and right now what I'm in charge of is all our benefits and mechanics, as well as rewards and operations of our program.
- 1:20Jason Whiting: Kind of personal thing.
- 1:23Jason Whiting: You probably see it from my backdrop, but I'm a massive Star Wars fan, and mostly a LEGO Star Wars fan, and I would like to say that that probably got me my start in the company is had such a passion for it I thought it was easier just to work here.
- 1:37Jason Whiting: So huge fan.
- 1:39Jason Whiting: But yeah, that's a little bit about me.
- 1:41Mark Johnson: Okay, witness, the next theatrical release for Star Wars coming out.
- 1:46Jason Whiting: Oh geez, I honestly don't know, and I should know this.
- 1:49Jason Whiting: I was just at Star Wars Celebration hearing about everything coming up in the additional prequels and sequels and everything like that, but I don't recall when the next one is.
- 1:59Mark Johnson: Okay Interesting.
- 1:59Mark Johnson: I was reading something about how they do directors now going forward.
- 2:05Mark Johnson: They only let a director have it one or two series of time or something like that, just to create some free funny.
- 2:11Mark Johnson: Some can be more intense, more drama based, but I think it's only one director at a time or maybe two.
- 2:17Mark Johnson: Then they kind of switch it over just to kind of give some different color or engagement in the end of the series.
- 2:24Jason Whiting: They've done a lot of interesting stuff with the series over between the shows and the movies and stuff.
- 2:28Jason Whiting: It'll be really great to see what comes up next.
- 2:32Mark Johnson: Okay, yeah, I was just telling the story that we just did a bunch of redesign our house and I actually saved this from my floor of my.
- 2:41Mark Johnson: We put carpet upstairs of my house and my son had it in his and just broke it on his floor in his bathroom and I'm like that's going to get stepped on.
- 2:54Mark Johnson: I made him fix it and I just broke it again.
- 2:56Mark Johnson: But I like Star Wars Legos as well, so perfect.
- 3:00Mark Johnson: So for those who may not be familiar with Lego, can you tell us a little bit about, like a short history of The LEGO Group, what you guys do, how you do it and kind of how the company's grown and evolve?
- 3:10Jason Whiting: Yep, and I'm sure I can give you a little bit of background.
- 3:12Jason Whiting: I'm sure everybody's heard of the company 95% brand awareness, so it's been around since 1932.
- 3:20Jason Whiting: So we were born in.
- 3:22Jason Whiting: Billund Denmark is a really small town in Denmark.
- 3:25Jason Whiting: It was mostly like farming land to begin with.
- 3:28Jason Whiting: That's where our world headquarters are still today, owned and operated by the family.
- 3:33Jason Whiting: The same family who started it still owns the company.
- 3:36Jason Whiting: So a privately held company Start off in a woodworking shop making furniture, got into wooden toys and stuff and then moved on to injection molding and plastic bricks and we've been doing that for quite a long time.
- 3:52Jason Whiting: Now we're coming up on our 100th anniversary not too far away, so getting pretty excited about that.
- 4:01Jason Whiting: But yeah, it's a fun place to work.
- 4:04Jason Whiting: Like I said, our global headquarters are in Bill in Denmark, but we have some regional headquarters around in.
- 4:13Jason Whiting: London is one of them, which is one of our regional hubs, as well as one in Connecticut, soon to be moving to Boston, and then we have Singapore, china, etc.
- 4:23Jason Whiting: So we operate globally and our program actually runs in 34 countries in 26 languages.
- 4:32Jason Whiting: So pretty substantial.
- 4:36Mark Johnson: Perfect when you look at the LEGO VIP program a very successful program, award winning, just won a number of awards at the Loyalty 360 conference.
- 4:45Mark Johnson: How does the program work?
- 4:46Mark Johnson: Can you give us a brief overview of the benefits, how it works and how it keeps people engaged with the program?
- 4:55Jason Whiting: Yeah, so the program itself is much like a lot of other programs and we have a point system based on when members make purchases with the LEGO group, either through LEGO.
- 5:05Jason Whiting: com or our owned and operated stores.
- 5:08Jason Whiting: But the big difference in our program, what I like to say is it's really built on our company values, which includes fun, creativity and inclusivity.
- 5:16Jason Whiting: So it's one of the reasons why we don't have a traditional tiering approach to anything.
- 5:21Jason Whiting: As an inclusive brand, we want to make sure we're welcoming to everybody and we really use the different benefits and rewards to target our different users.
- 5:30Jason Whiting: So, while some users will gain lots of points because they do have high spending thresholds, we usually look at or they have high spend.
- 5:38Jason Whiting: We usually look at the types of things that they're interested in which tend to be more expensive in the program, and then we offer them up.
- 5:45Jason Whiting: So our program has everything from very low value items including free rewards for those just starting off in their journey with the Lego brand all the way to things that are like money can't buy benefits and rewards.
- 6:00Jason Whiting: So, like I said, traditionally it's got the point system and extensive reward catalog.
- 6:06Jason Whiting: We have over 1,000 different types of rewards depending on the different target audience affinity, things like that.
- 6:13Jason Whiting: And then we have additional features and benefits so early access, special events, signing events for our users, points, promotions and stuff like that.
- 6:23Jason Whiting: But really we look at we want something fun.
- 6:26Jason Whiting: We try to be a little bit creative in the different types of things that we make for our users and then really making sure it's super inclusive and there's something for everybody.
- 6:37Mark Johnson: OK, I think, knowing your program, knowing you for a number of years, you guys do a great job with your program initiatives and keeping the program up to date.
- 6:46Mark Johnson: You also do a lot of research consumer research, trends research, that kind of influence, your personalization partnership program.
- 6:54Mark Johnson: So how has customer data influenced your program initiatives and what type of research do you use to build out such a successful rewards program?
- 7:05Jason Whiting: Hugely important.
- 7:06Jason Whiting: It's everything from getting everybody involved in the user journey and trying to figure out where are there moments that we can bring the program to life, to focus groups, to surveys.
- 7:16Jason Whiting: But really, for me, the best thing that we can get is talking to our users, that zero party data, finding out what they really like, what did they really want?
- 7:25Jason Whiting: And this is really getting to the heart of what drives them emotionally, not just transactionally.
- 7:31Jason Whiting: So if you ask any user what they want, they're going to say they want something cheaper or they want money off or they want something free.
- 7:37Jason Whiting: So really understanding where their passions are, that really is super important to us to understand what we need to create from the program.
- 7:45Jason Whiting: So we work very closely with our digital insights team around just analytics to see what's working.
- 7:50Jason Whiting: But then we work with our global insights team, focus groups and, like I said, just going right out to the user, just wait and ask him what is it that?
- 7:59Jason Whiting: What's the thing that's interesting?
- 8:00Jason Whiting: What do you really wish we could bring to the program?
- 8:04Jason Whiting: And then trying to see what is feasible.
- 8:06Jason Whiting: So it's a huge aspect, but it's not that I would put little value to the traditional insights and data metrics, but sometimes it's just better to get out there in front of people and really understand what's going on, and that's something me and my team do constantly.
- 8:24Mark Johnson: OK, personalization is a big area of interest for brand stays.
- 8:29Mark Johnson: I mentioned zero-party data, transactional data, behavioral data all that goes into effective approaches.
- 8:36Mark Johnson: But you can have all that data and not do it.
- 8:38Mark Johnson: Well, as you know, and I think LEGO does a great job of doing personalization.
- 8:43Mark Johnson: When you look at a brand I look at LEGO as a brand new how are you focused on personalization?
- 8:49Mark Johnson: What does it mean to LEGO?
- 8:51Jason Whiting: Yeah, and I think I appreciate your comment saying that we do it well.
- 8:57Jason Whiting: I think we are hypercritical of ourselves and we don't necessarily think we're doing a great job at it, but it's constantly a journey where we're trying to better understand our users.
- 9:08Jason Whiting: What's really tough is getting into the space of personalization, is we've all very much sat in this segmentation world and looking at different how can we put users into different segments, look at their behaviors, look at their shopping patterns, things like that.
- 9:24Jason Whiting: We're really trying to move closer and closer to personalization, to one-to-one, and I think the challenge often lies in balancing the need to provide this personalized experience or personalized information that brings people through that journey, versus how much data do you really want to collect?
- 9:44Jason Whiting: As a children's brand, we have to be very careful with that and our program works directly with shoppers.
- 9:52Jason Whiting: But we are very critical of and of how important it is for us to keep trust within for the brand, especially to families, right.
- 10:04Jason Whiting: So when we look at this, we say what type of information do we really need to make that personalized experience and then what type of information does that user need?
- 10:14Jason Whiting: On the other end, I would say like we are very early in that journey on where we want to be, but we're treading very carefully because of the use of data and the fact that we are a global program.
- 10:25Mark Johnson: Okay, what metrics do you see?
- 10:26Mark Johnson: Growing personalization that can kind of tell the story about efficiency efficacy of the program, especially the measurability engagement spend potentially.
- 10:36Jason Whiting: Yeah, I mean, it's the traditional ones that we all look at, right?
- 10:39Jason Whiting: So sales frequency, average order value, retention metrics, things like that, click through rates to make sure that the marketing is doing well.
- 10:47Jason Whiting: The big one for us, though excuse me, that was a change was really looking at our engagement.
- 10:53Jason Whiting: Scoring and this is something I'd shared at the Loyalty 360 is we built an entire scoring model to look at all the different touchpoints that people have within the program and seeing how things change for that user when they engage with different aspects of the program.
- 11:10Jason Whiting: And we've rated all of our users on a scale to understand how engaged they are.
- 11:16Jason Whiting: And it's not just about sales, right?
- 11:18Jason Whiting: So you can't shop your way into a highly engaged user.
- 11:20Jason Whiting: You have to actually be interacting with various aspects of the program.
- 11:25Jason Whiting: And this is really important to us because this type of metric shows us are we creating new benefits that people actually use?
- 11:31Jason Whiting: And then the more engaged we see them, the longer we keep them, the longer they hire their lifetime value and things like that are.
- 11:39Jason Whiting: So we really started with what is it we're trying to achieve and then measured across all the different aspects of the program to say, okay, are we achieving this goal?
- 11:49Jason Whiting: Are they engaging with this feature?
- 11:51Jason Whiting: Are they using it?
- 11:51Jason Whiting: Are they using it over time?
- 11:52Jason Whiting: And if they are, let's rank them a little higher and see what we can do next to make them even more engaged with the program.
- 11:59Jason Whiting: So I think that's a big shift for us, moving from those traditional, like sales based metrics.
- 12:05Jason Whiting: Okay, that's fine, okay excellent.
- 12:08Mark Johnson: You know partnerships.
- 12:09Mark Johnson: I know they're another important part of the LEGO's custom ability approach.
- 12:14Mark Johnson: You guys seem to do it quite well.
- 12:17Mark Johnson: I know you have some incredible collaborations with IKEA, ditas and you know the Levi's collection.
- 12:24Mark Johnson: How do you go about establishing a partnership that's mutually beneficial, both to LEGO and the other brand but, you know, also to the consumer?
- 12:31Mark Johnson: How do you get that to work, because that could be a big challenge for brands these days having a partnership that is advantage to everyone in the mix.
- 12:39Jason Whiting: Yeah, I would like to say I have the magic sauce for fixing this, but I don't like.
- 12:45Jason Whiting: We have an entire team at the LEGO group that works on brand partnerships.
- 12:49Jason Whiting: The biggest thing for us in finding the right partners whether it's a good brand fit.
- 12:54Jason Whiting: There's quite a few brands out there that just don't align with our company values and we wouldn't necessarily work with them.
- 13:00Jason Whiting: So we have an entire team that looks at all the different partnership opportunities and it truly makes my life easier because that team comes forward with those opportunities already.
- 13:10Jason Whiting: So I might be able to say here's a new company I'd like to work with or a new area I'd like to work with and hand it off to them.
- 13:18Jason Whiting: But often they're coming forward with those partnerships and, like I said, we have an entire team dealing with inbound and outbound licensing.
- 13:25Jason Whiting: They're looking at both IP partners to bring into the LEGO brand as well as partners to bring the LEGO brand to.
- 13:32Mark Johnson: Okay, and when you look at the partnership approach, you have a team now that focuses on it.
- 13:37Mark Johnson: How do you see that changing?
- 13:42Mark Johnson: Are you looking at more partnerships, more strategic partnerships?
- 13:44Mark Johnson: How does the approach to partnerships, how's it, changed within your group?
- 13:49Jason Whiting: Yeah, I think, even starting back some of the older IPs that we had, and I mentioned LEGO.
- 13:55Jason Whiting: Star Wars is one of my fan favorites here and that's a huge IP partner and we work with them everywhere, from content that's Lego mini figures inside, like Star Wars branded content, all the way to the Star Wars branded sets and things like that.
- 14:14Jason Whiting: So there's a lot of work that we do with Lucas and Disney.
- 14:18Jason Whiting: I think over time we're just looking for more of those types of partners that we can work with that can bring mutual value to us.
- 14:27Jason Whiting: So, like I said, star Wars is a great one where we have quite a few rewards that we know that our fans are really engaged with, so we create more and more features in there.
- 14:38Jason Whiting: And another great one is Nintendo, where we have products that we've worked with them and then we actually worked in collaboration our two programs, LEGO VIP and my Nintendo to build a relationship where we both had benefits for our members.
- 14:54Jason Whiting: So I think there's just gonna be something more and more that we do over time Once we find that, like I said, that right fit.
- 15:02Jason Whiting: But it's becoming super important because a lot of, like I said, brand recognition is huge and a lot of the way we get people to think about our brand is in the context of things that they're already into the IPs that they're already into and there's usually just a really good fit between the brand, our brand and that brand, usually because it's based on some type of product storyline that those fans are really into, plus the desire to build.
- 15:26Mark Johnson: Okay, great.
- 15:26Mark Johnson: And when you look at the measurement regarding customer loyalty, it can be somewhat challenging with regard to incrementality or just return on the program all the way around.
- 15:39Mark Johnson: But when you look at the KPIs, what KPIs does Lego and your team use to kind of look at your loyalty strategy and then make sure that your efforts are on track?
- 15:49Jason Whiting: Yeah, and I would say goes right back to kind of those core ones.
- 15:52Jason Whiting: So we are looking at frequency and retention, kind of those are two big ones.
- 15:58Jason Whiting: We look at an active based model, which is how many times has somebody shopped within a one year period?
- 16:04Jason Whiting: We are very seasonal.
- 16:08Jason Whiting: Toy product, toy industry is very seasonal, so we look at a long time horizon for how often we bring people back.
- 16:15Jason Whiting: And then that's the engagement scoring piece, which just shows how well people are embedded into the program.
- 16:22Mark Johnson: Okay, when you look at the economy, a little bit of economic uncertainty today, even though I was just reading that Apple's at all time high and some companies continue to do very well.
- 16:32Mark Johnson: Inflation in the US and in Europe.
- 16:35Mark Johnson: England job growth continues to be quite strong.
- 16:38Mark Johnson: But how can customer loyalty, customer loyalty programs, be a hedge against some of that economic uncertainty?
- 16:45Jason Whiting: So I think like that's the big thing, right, as a lot of our programs were here to create this added value that maybe our products or our services don't automatically have in their own or people have been accustomed to, so we reward that loyalty for us.
- 17:01Jason Whiting: I think the challenge I see with a lot of the things going on in the economy is, as we try to fend off some of these, the natural position to go into is like this discounting mindset and I think, a lot of those changes.
- 17:18Jason Whiting: They can be a big challenge for both our brands and our programs, right?
- 17:23Jason Whiting: So there's quite a few programs that I saw in some of the industries that, in order to make this transition from during COVID right From an in-person experience to an online experience or their entire business model, shut down.
- 17:40Jason Whiting: They over-indexed to providing way more value and it kind of reset everything and users expect that they're going to get more discount pricing benefits from that membership, and I think what that does is it devalues your product as well as your program, and I think that's the thing we have to watch out for.
- 18:01Jason Whiting: I think there's a role we play in bringing more value to our users, but we shouldn't do it at the expense of our product as well as our programs.
- 18:10Mark Johnson: OK, and when you look at customers, a great deal of discussion regarding how customers are changing, going into COVID behaviors, change Stores had to kind of respond to that by in the line picking store, return shipping, whatever it may be within your respective industry.
- 18:29Mark Johnson: But how do you think your customers have evolved and how are you kind of addressing that and looking at it holistically from the Lego perspective?
- 18:38Jason Whiting: So I mean honestly, we all saw the same thing right, we saw a bunch of channel shifts.
- 18:42Jason Whiting: Our stores are massive brand experiences and having those stores closed for some time and moving to the E-Com platforms, that was tough, right.
- 18:54Jason Whiting: So the upside is we saw a lot of people who had never moved into the E-Com space and were only in these physical stores shopping, moved to the E-Com and into our E-Com platforms and actually start understanding how to use the different aspects of the program that were only online at that time.
- 19:13Jason Whiting: So I think that was a huge benefit for us.
- 19:15Jason Whiting: It got visibility into various aspects of our program as well as our business.
- 19:19Jason Whiting: Once the stores opened back up, we saw that those tight shift and people moving back into those physical experiences, which is really good.
- 19:28Jason Whiting: But you get more omnichannel shoppers from that and I think that's a really positive thing because you move seamlessly between those channels.
- 19:38Jason Whiting: But it runs the risk is, we taught a lot of users around convenience aspects and things and there was big shifts in our business.
- 19:48Jason Whiting: Like you said, return policies and free shipping and free returns and all these other things that fundamentally changed the demands of our users.
- 19:56Jason Whiting: How do we just manage that when we might not be able to provide those same things going forward in our stores or online, and all of us have challenged with this.
- 20:07Jason Whiting: There's been some big, monumental shifts and I think, especially in some of these programs, there's been some big things that were done during COVID times to keep people engaged and I think, looking at what that means for our business and how do we continue those experiences where people they've set their expectations fast shipping delivered to your home, easy returns those are as should be expected, but we've made them so easy as we're opening in our stores.
- 20:40Jason Whiting: What does that look like in our stores?
- 20:41Jason Whiting: And, honestly, this is a place I'm not sure about Like we have to keep an eye on it as people move around, but it's really important for our customers to get a lift and push back in the industry comes a tougher thing, I think, for a lot of businesses that have like franchise models and things like that, because people want to move across all those channels very seamlessly.
- 20:58Jason Whiting: And what does that look like?
- 20:59Jason Whiting: So I think like things like the hotel industry or airlines and they've been dealing with this for a while, but I think in retail it's been a little bit different and some challenges over the next few years to take a look at, but I would say overall I think it's been a positive.
- 21:15Jason Whiting: Covid wasn't a positive thing, but I think it was a positive thing to get people moving through those channels and seeing the different experiences that they can have.
- 21:23Mark Johnson: Okay, are there other customer loyalty programs, customer loyalty efforts that you admire, that you may find yourself loyal to being one of the leading programs in the industry?
- 21:35Mark Johnson: If so, what do you like about their program?
- 21:38Mark Johnson: What keeps you loyal?
- 21:40Jason Whiting: Yeah, so I'd say there's probably two programs in one industry that I think, that I find that I really like.
- 21:46Jason Whiting: So the Explorer program from North Face, I think, is really good, I think because it really feels very similar to what we do, embraces their users, really understands, like you know, what their passion is about and means into that, and that's something that I take a lot of inspiration from and how we approach this.
- 22:09Jason Whiting: And then I also really like what Nintendo has done, having their dual currency and moving for both engagement and purchase.
- 22:19Jason Whiting: They have a pretty well well established rewards portfolio.
- 22:23Jason Whiting: I think that one I feel is similar to Explorer, similar to ours.
- 22:27Jason Whiting: I just like how they're really leaning into the passion points of their users versus really looking at it as, like, like I said, a transactional or discount-led program.
- 22:39Jason Whiting: And then, I think, from an industry standpoint one I kind of hinted at some of the challenges I saw earlier.
- 22:47Jason Whiting: But the cruise line industry I find fascinating, right, they went through this huge shift during COVID where they had no business and fundamentally changed a lot of their programs, and now they're faced with the scenario where a lot of their users have moved up their tiering systems and now they have to assert providing those benefits and they're facing with bringing that entire business back with a huge set of users that moved up multiple tiers.
- 23:13Jason Whiting: I think that's really interesting to see that right, unlike our company where, I said, like you know, we're very much about the inclusivity piece, which is why we don't have tiers.
- 23:23Jason Whiting: Their entire business model is built on tiered rooming systems and benefits and stuff.
- 23:29Jason Whiting: So, seeing how, how do you take people who traditionally would have been your highest tier and now literally they're they're in the middle but they're still being, they're still being called by the high tier numbers how do you deal with that and I think that's just something interesting to learn from and how they're affected by everything that's happened over the past few years.
- 23:47Mark Johnson: What can Loyalty 360 do to help you and your team and your customer loyalty efforts?
- 23:52Jason Whiting: Yeah.
- 23:53Jason Whiting: So I think there's probably some a few areas that just like keeping a lot of the different vendors coming in, different speakers talking about some of the the different things that are happening in the industry I think is very helpful, especially in the space of the metrics Right.
- 24:12Jason Whiting: So things like how are people approaching predictive lifetime value or or the attribution modeling piece.
- 24:20Jason Whiting: I think all of this is super helpful.
- 24:22Jason Whiting: I get a lot of benefit and me and team get a lot of benefit from looking at different research, different presentations from different leaders to understand what's going on in the industry, plus to help us either set our strategy or look at kind of setting the story for our leadership right, what is going on in the industry.
- 24:43Jason Whiting: I think we probably also a lot of us who've been, who've had a program for, sometimes suffer from the same thing, which is how do we evolve this?
- 24:51Jason Whiting: We take, we look at externals and we take inspiration from that, but nothing's ever as easy as it seems from the outside.
- 24:58Jason Whiting: Being able to get a glimpse into what others are doing, I think, is a huge thing that Loyalty 360 can do and something I really I really liked being at the the conference to just seeing that other people talk about their programs, talk about what their challenges were and how they overcame them.
- 25:18Jason Whiting: I think is incredibly helpful for both me bringing back and inspiring my team, but also to get set some direction for internal leadership.
- 25:25Mark Johnson: Okay, perfect.
- 25:27Mark Johnson: Well, thank you very much took some copious notes there, and it was great seeing you a couple of weeks ago at the conference.
- 25:33Mark Johnson: Hopefully we'll continue to see you, and congrats on all the amazing success that you're having with the program.
- 25:40Jason Whiting: Fantastic.
- 25:40Jason Whiting: Thank you absolutely.
- 25:43Mark Johnson: You too.
- 25:43Mark Johnson: Thank you everyone for joining us today.
- 25:45Mark Johnson: Make sure you join us back for another edition of our leaders in customer loyalty series soon.
- 25:48Mark Johnson: Have a wonderful day.