#SpringRefreshSeries | #4 Increase Brand Loyalty

Business is what you do. It’s what you’ve always done. You have dedicated clients and customers. Your brand is known. You are satisfied with your progress. It is all good. But, you know what separates good companies from great companies?

Great companies constantly look for ways to be better.

This month, we profile 4 companies we know. We look at how revamping their business models – new dedication to customer service, expanding internet presence, new leadership and updating processes -- took them from good to great! This week, we close our #SpringRefresh series, exploring Four Reasons to Consider a Business Revamp, with a look at world renowned toy manufacturer, Lego.

Earlier this year, Lego reported the highest revenues of its 85-year history.

The company has been on a steady revenue increase in recent years. In 2004, they were nearly $1 billion in debt, and saw a 40% decline in sales in the short span of only two years. It appeared the company had no future at all. They were on the verge of bankruptcy, and working with an outdated mission and foundation – unable to compete with the rise in competition from video games and the internet. They were “old-fashioned" and "out-dated.”

Then came new leadership, new thinking and updated processes. 

Enter Jorgen Vig Knudstorp. Knudstorp was promoted to CEO of the company in 2004, and began modifying the course of the company with key changes. Among the first set of changes was to focus on managing cash flow, selling off extraneous businesses (theme parks, video games, etc.), and cutting production costs, by slashing the number of parts produced. Faced with a significant decrease in sales, the company began to reinvest in customer service and branding. They addressed customer-level issues, such as dissatisfaction with deliveries and customer service. They also began to extend the brand by developing multimedia content and through meaningful collaborations. They revamped their Research & Development teams, to include fans and adult fans of the Lego blocks, to better understand and serve their audience.

Lego devotes more attention now, than ever, to understanding both the people that buy and use their products.

Lego’s turnaround from bankruptcy is a case study on how a company can reinvent its business model, while retaining its core values. By committing to strategies that would make Lego a premium brand in the eyes of consumers, the company and brand was able to bounce back. Today, the Lego Group is reportedly the most valuable toy company in the world and estimated to be worth more than $14.6 billion. The multiple strategies employed by Lego, supported by the company’s knowledge of its customers’ wants and needs, has catapulted the brand to new heights and long-term success.

Their business revamp has since hailed them as “the Apple of toys”: Profit-generating. Design-driven.

Picture it -- 2004. Lego, one of the biggest names in Toy Manufacturing,  is almost $1 billion dollars in debt with a 40% decline in sales over 2 years.  By revamping strategies and introducing new processes, Lego significantly boosted sales and brand loyalty. By 2013, Lego had become the most valuable toy company in the world, valued at more than $14 billion.

Take a page out of Lego’s book. Now is a good time to take a look – or bring an outside contractor in to take a look – at your processes and where you stand in an ever growing market. Complacency is an enemy of progress. Now is the time to ensure you continue to grow and stay the top of your game….and increase loyalty to your brand.