It’s tough to find anyone who’s not a LEGO fan.
Loyalty to the Brick has been passed down through generations. The product is a category of its own. There’s little worry that customers will purchase LEGO once and never again.
However, like any brand, LEGO wants to protect its DTC. The LEGO Insiders program is designed to bring people back to their own website and their stores – whilst also acknowledging the way people shop for toys today.
It’s a smart program, but we’d also recommend some tweaks.
So, let’s break it down – brick by brick.
The above tagline from the LEGO site really exemplifies how members earn points and redeem rewards in the LEGO loyalty program. Here’s an explainer:
Points can only be spent on the brand’s website or at their official stores. Either you can:
It’s an easy-to-understand program, represented clearly on their stylish website.
Crucially, they’ve got great points equivalency of 5% in every region. This means that customers accumulate points at a rate that unlocks rewards relatively quickly, but not so quickly that it damages LEGO’s margins.
There are 3 things in particular we love about the LEGO loyalty program set-up. Let’s explore them.
Famously, points mean prizes. But often, consumers are keen for something even simpler – money off their next order.
LEGO gets that right by offering seamless redemption of points for money off at checkout. At the same time, it also offers a host of other exciting ways to engage with the program.
Together, it’s a strong balance, avoiding training consumers to seek discounts alone, whilst increasing the proportion of members that are redeeming.
That’s important because redeemers tend to have much higher lifetime values (CLVs) than non-redeemers – just look at the difference in HOLY’s loyalty program: redeeming members have a 5.1x higher CLV. This means that revenue contributed by these actions can build quickly; over a fifth (21%) of HOLY’s revenue comes from the loyalty program.
Give customers a really easy way to use their points – but balance that with other fun incentives, so you increase both redemption and program engagement.
Giving away free products may seem like an unwise move for some brands, but LEGO understands the huge revenue potential to be gained from this.
Their offer of free gifts that can be redeemed for points proves this:
Free gifting should never be mere generosity; with the right loyalty structures, it works for both the consumer and the brand. You can encourage repeat purchases that grow a customer’s lifetime value, and thus grow your brand.
The opportunity to earn points by registering LEGO sets proves this program really understands its audience.
Each LEGO set comes with a QR code in the build instructions. Customers can scan this using the LEGO Builder app to receive points that go into their LEGO Insider account.
This process acknowledges three things:
The opportunity to get points even when you haven’t purchased directly feels like a bonus for the consumer. But crucially, points can only be redeemed directly with LEGO. It means that customers are always funnelled back to their DTC and stores, helping increase the proportion of repeat purchases that are happening directly with the brand.
Plus, once the LEGO Builder app is downloaded, there’s yet another touchpoint the brand can use to keep their DTC top of mind, with customers able to scan it to receive points in a flash in LEGO stores.
Understand how consumers purchase your products, and then consider how your loyalty program can reward that whilst funnelling them back to your own website or stores for their next purchase.
The LEGO loyalty program gets a lot of things right. However, there are always improvements that can make loyalty programs more impactful, more incentivizing, and easier for staff to manage.
Here’s a big one our experts would suggest:
There’s no evidence that LEGO smartly discounts the number of points a customer needs to redeem certain rewards or unlock discounts at checkout.
However, brands are finding that dynamic discounting for specific cohorts nudges repeat purchases sooner, getting a customer familiar with redemption, and increasing their lifetime value more quickly. Thus, your revenue grows faster.
Here’s what LEGO could do:
Leverage AI to spot which customers are close to being able to redeem a reward, and smartly discount it (say, from 1000 points to 950 points) for a short period of time. Then, notify those customers using your email integration, push notifications, and loyalty page. The customers will want to make a repeat purchase more quickly to take you up on the limited-time offer – and boom: you’ve increased your revenue, and your proportion of redeeming members.
Brands using these AI Campaigns are already seeing a 20% increase in revenue from members while the campaign is running. It’s a no-brainer – and runs in the click of a button. Why not explore it today?
