By tapping into the knowledge and enthusiasm of thousands of longtime users of its products, Lego has been able to enhance its product offerings — without increasing long-term fixed costs.
Customer-oriented companies pride themselves on their ability to understand the experiences and insights of the marketplace and then integrate the best ideas into future products.1 But what would it be like if you found that you had hundreds if not thousands of knowledgeable users of your products ready and eager to spend nights and weekends acting as extensions of your research and development department? For the Lego Group, a maker of children’s creative construction toys based in Billund, Denmark, this close bond with the user community — not just children but a large coterie of adults who have been using its products for years — is not a pipe dream but a reality.
Lego users have a long tradition of innovation and sharing their innovations with one another — activities that the Internet has made much easier. As Lego managers became more aware of innovations by the company’s adult fans, the managers realized that at least some of the adult fans’ ideas would be interesting to the company’s core target market of children. In 2005, Lego created the Ambassador Program to provide a fast and direct way for the company and its fans to get into contact with one another. The program has provided considerable value to both sides.
- For the Lego Group, the program has offered exposure to new ideas, new technologies and new business partnerships. Management saw that not everything needed to be developed internally. Indeed, the company has found ways to expand into new market areas without having to sustain long-term fixed costs.
- For the adult fans, collaborations have allowed them to influence Lego’s business decisions and encourage the company to develop products targeting teens and adults. In some cases, Lego has decided to back businesses that produce products related to its own.
Through trial and error, Lego has developed a solid understanding of what it takes to build and maintain profitable and mutually beneficial collaborations with users.