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Episode 118 (Interview) with Dan Kustelski – Co-Founder of Chalkline admin
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Episode 117 (Interview) with Len Covello – CTO of Engage People admin
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Episode 115 – (Interview) with John Bertino – Owner and Founder of The Agency Guide admin
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Episode 114 – (Interview) With Nick Ewen – Director of Content for The Points Guy admin
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Episode 110 – (Interview) with Zachary Slingsby – Founder of Human Factor Media admin
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Episode 108 (Interview) with John Nantz – Founder and Strategy Consultant at Redwood Advisors admin
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Episode 107 (Interview) with Bobby Gillespie Founder and Principal at Propr Design admin
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Episode 106 (Interview) With Brandon Ehrhardt – Senior Director of Partner Programs at Expedia Group admin
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For 90+ years, the LEGO Group has been owned by the Kristiansen family in Billund, Denmark. What started as a wooden toy workshop in 1932 would grow into one of the most recognizable toy brands in the world after it started making injection-molded plastic bricks. Part of LEGO’s success comes from its commitment to its company values: fun, creativity, and inclusivity. These values are the foundation of the LEGO VIP rewards program and are built into every promotion and reward it offers.
At the 2023 Loyalty360 Loyalty Expo in Orlando, FL, the LEGO Group was recognized as a 360 Degree Award winner and a platinum award winner in the following Loyalty360 Awards categories:
Mark Johnson, CEO of Loyalty360, spoke with Jason Whiting, Director of Membership at the LEGO Group, about the brand’s recent award presentation and recognition at the Loyalty Awards.
LEGO was a finalist in the Offer, Incentive, and Reward Design and Customer Analytics, Insights, and Metrics categories. Although different, the focus on metrics and measurement is quite important, how do these two categories work together in your approach and was there overlap between the two?
Whiting: At the LEGO Group, our rewards category is extensive and targeted to all our users across passion points, themes, age, price range, etc. There's a lot of work we had to do to prove the value of those rewards, using some industry metrics that indicated if we can get somebody to redeem, we should be able to increase lifetime value by 30%. That's part of the reason why we changed the program. In the insights and metrics category, our focus was presenting our engagement scoring piece. Engagement scoring is how we created some of the proof of concept behind a lot of the rewards and benefits we created. We started with the aspects of our program that would drive engagement, not sales specifically, and many agreed within the organization that the mechanics and different benefits that we were looking at were indicators of high levels of engagement.
Then, we created an entire scoring model that rated all our users on a scale from 0–50. We used that to indicate whether they were at low, medium, high, or very high engagement levels. Once we were aligned on that, we applied the model to understand the value of those members as they moved through the levels. That was the proof of the work we were doing. While average order value might be lower between low engagement and medium engagement —where medium would have a lower average order value — we saw that group had a much higher lifetime value. It showed that the different engagement mechanics moved people up that ladder, with the number one mechanic being reward redemption. It's not only how we identify what the right rewards are and what they can do to move the needle on the level of engagement, it shows that there's real value to the company behind that and we're proud of that work.
Aside from the numerous awards, what are one or two things you’re most proud of when it comes to your brand’s customer loyalty program and program efforts?
Whiting: First, it's been the monumental shift in our strategy that we laid out in 2019, moving from a transactional program to a more engagement and reward-based program. There was a risk in there and it wasn't smooth sailing, but it paid off. Recruitment, engagement, and redemption are much higher than projected, and it's had a significant business impact.
The second part is how much we've expanded our offerings in line with our brand values. We're an emotional brand, and we need to provide benefits that are beyond that transactional nature. We've worked across the entire company and directly with our users to identify what resonates with them beyond that transactional, money off experience. Being able to build that and get the rest of the company behind it has been powerful and inspiring for me and the entire team.
What’s one piece of advice you would share with a similar brand or someone who looks to expand or enhance their customer loyalty strategy especially when it pertains to the having the right offer, incentive, and reward approach?
Whiting: I've said this in a lot of conversations with Loyalty360 and in other places, too. Anybody's who has either read something that I've quoted or heard me in one of these interviews, I pretty much say the same thing: I'm a huge advocate for making sure your programs have strong brand alignment. Our businesses are based on that brand foundation and customers come to us, not because of our loyalty programs, but because of something that resonates with that brand, whether it's convenience, price, quality, caring, inclusivity, or — like us — fun and creativity. That brings people in. If we don't have programs that reflect that and create rewards and benefits that embrace that, we're going to be misaligned with those values. Our job is to strengthen the relationship with our users. Making sure we have that type of brand alignment and then building on the foundations of our brands are important to the success of any of our programs.
Briefly, what is the next exciting step the LEGO Group plans to take in strengthening customer loyalty?
Whiting: That’s a great question, and I'm not quite ready to answer at this moment. I can say that loyalty is more important to our brand than ever. We understand — especially coming out of COVID, changes in shopper behavior, and macroeconomic changes — that loyalty plays a massive role. Our company is headed into its 100th anniversary in 10 years. We know how important it is to build lasting relationships with our fans that span generations. I can't reveal everything that's going on, but I would just say keep an eye on this space over the next year or two, and you'll see some big changes coming.
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Welcome loyal listeners to another episode of The Loyalty Minute. I’m your host Rob Gallo and today I am excited to chat with Dan Kustelski. Dan is the co-Founder of […]
