🤔 Did you know…
In the 1930s, Ole, a toy manufacturer, capitalized on the yo-yo craze. Overnight, the fad died and the factory was left with a mountain of yo-yos and zero buyers.
But Ole had an idea, chop them in half and he had wheels for a new toy truck (it became a best-seller).
Twenty years later, Ole would have another idea–plastic, interlocking bricks… This is the story of LEGO (and everything you can learn from it).
You’re at the store deciding what to buy for your nephew.
Feeling stumped, you ask the shop assistant for some help.
“He’s eight. He needs something that will entertain him. And give him a break from screen time”.
He replies with certainty, “Have you thought about LEGO?”
Childhood nostalgia comes flooding back–you remember playing with those tiny little bricks for hours. You smile.
“They’re doing a partnership with Avengers right now,” the shop assistant continues.
“Perfect.” You reply.
As the shop assistant bags up your purchase, you wonder to yourself:
How is LEGO still so popular after all these years?
In today’s special edition of Why We Buy 🧠 we’re analyzing a well-known company to see how they use buyer psychology principles in their business.
This week, we’re diving into LEGO—the Denmark toy company that became the largest toy seller in the world.
Let’s get into it…
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A Look Inside LEGO 🤑
The LEGO story began in 1932 but up until 1947, LEGO was a wooden toy company.
The company invested heavily in plastic injection moulding machines, marking the start of plastic toys.
In 1958, they finalized their signature brick design and secured the patent–the rest is history.
Today there are over 400 billion pieces of LEGO in the world and the tallest LEGO tower in the world sits at over 114ft (made of over 550,000 bricks).
Hilariously, in 2011, LEGO became the largest tire manufacturer in the world (producing over 380 million tires for its toys that year).
They’ve even diversified into movies and grossed $468 million at the box office in 2015.
LEGO has become a household name.
Let’s explore how they took over the toy industry…
How LEGO Uses Buyer Psychology 🧠
You know, sometimes the best idea is just a good idea iterated thousands of times.
The best way to describe LEGO’s success is simple: Pick a vertical and make it horizontal.
You see, LEGO didn’t start selling plastic bricks (that came 20 years later) with the invention of plastic injection mouldings.
LEGO stacked (“stacked”—get it?) all their attention on these little bricks and built (okay, I’ll stop now) their brick empire.
Along the way, LEGO leveraged many buyer psychology principles to become a $11.8 billion brand. Here’s how:
The IKEA Effect is simple—people value things more when they build them. It’s probably why you’re more invested in your own ideas than the ones that are handed to you on a plate.
At its core, LEGO is a toy-building company. It doesn’t come ready-made, part of the joy (or frustration if you’re struggling to piece it together) of LEGO is the ability to build it yourself.
30 years after releasing his best-selling book, Influence: The Psychology of Persuasion, Robert Cialdini introduced a new and powerful principle of persuasion: Unity.
Research shows that our self-identity impacts how we make decisions.
We’re more likely to gravitate toward people and brands who are “one of us”.
Strategic partnerships with beloved brands played a huge role in LEGO becoming the giant it is today.
Established brands like Harry Potter have an army of strong fans. By partnering with brands like these, LEGO attracts new fans by showing that they’re one of us too. Self-described “Potterheads”
Long-standing ‘Potterheads’ are invited to become LEGO fans too.
Mere Exposure Effect
The more you see something the more you come to like it. We wrote about it in much more detail *with a shit-ton of examples* here.
For 66 years, LEGO has been selling practically the same thing—a variety of little bricks that can be made into… well, whatever you can imagine.
Their advertising showcases those familiar bricks while reminding parents, the people who buy LEGO, that this familiar toy can evoke endless creations.
Thinking About Your Business 🤔
LEGO was a 90-year overnight success story. Brick by brick they built a category of their own and it inspired a generation of children to make their imagination come to life.
Take their marketing masterclass and apply it to your business.
Q: How can you induce the IKEA (LEGO) Effect in your business?
Science tells us that people value things *more* if they own them (remember when we talked about the Endowment Effect)? LEGO took that idea and put it in the hands of the users. Look for opportunities for ownership in your product. It doesn’t have to be baked into your product. It can be in the way you package, deliver, or sell your stuff.
Q: What is your single-product focus?
LEGO’s success largely has come from taking a tiny idea (plastic bricks) and making it into a movement. Its positioning is textbook—on the one hand, they’re just plastic bricks, on the other, they’re the opportunity to build your own world. Figure out how you can take your best-seller and make it into a category of its own.
Q: How can you leverage partnerships to attract the right people?*
LEGO’s strategic partnerships help them connect with new audiences and surprise and delight existing fans who may already love both brands. The right partnership will help you reach more of your people.
* We used this strategy ourselves with Wallet-Opening Words.
Phill Agnew is a fellow behavioral science geek and hosts Nudge, the UK’s #1 marketing podcast. Partnering with Phill helped us connect with more people like us.
Based on this review from Jeni, we definitely found *our people*:
The Short of It 💥
Tiny plastic bricks don’t feel like a big deal. They don’t feel like they should be a multi-billion dollar industry.
But if you can stay focused, build community, and use the Ikea (LEGO) Effect to its full potential, you might just become a hugeeee company.
Until next time, happy selling.