How can Lego Drive Online Sales

Recently, my girlfriend asked me how can Lego drive traffic to their online stores and convert them into sales. Here is my response:


Introduction
Lego provides products for both youths and adult enthusiasts and as a result of many years of building a loyal fan base through creating well-positioned and relevant products, Lego’s have become iconic within American culture. However, their fan base rarely visits the Lego website and purchases are usually made through other online retailers like Amazon or through brick and mortar stores, despite Lego offering exclusive products on their site. The company is therefore not able to capitalize on revenue and cost savings they would receive if customers bought directly through Lego’s website.

Unique to other product based websites, Lego has built a website with features such as games, product customization and an internal network. Though there is no social integration with Facebook or Twitter right now, the website is set up to be its own online community.

Company Analysis
The end goal for Lego is to drive profits. Whether that is through cost reduction or increased sales, they must find ways to achieve higher profit margins. By selling products from their web store they will increase profit margins by selling at MSRP and reducing supply chain costs. Lego’s comprehensive site features are meant to drive traffic to their site by bringing their offline community online. This should also increase sales made directly from the Lego web store.

According to Alexa.com, the typical lego.com visitors are female, ages 35-44, and with children and an average social gamer is a 43 year old female. Though not perfect information it is still an indicator that the site would benefit from gamification. Lego must use their customer analytics to better understand their visitor base and create a gamification strategy that align their user base to their goals through creating rewards that attract users and encourage web store sales.

Ways to Gamify
Social Integration – The first thing I noticed upon entering the site is that it isn’t socially integrated, which forces their social community to work independently from their website. Lego needs to leverage its already existing online community and create that link form social platforms like Facebook and Twitter to lego.com. By becoming socially integrated, Lego will create a viral loop and traffic to the site will increase. Lego can start with social sharing and eventually move up the value chain towards social context as they build their social infrastructure.

Leaderboards – Lego has a whole host of social games that are exclusive to their website. Yet there is no visible form of competition. Providing a leader board for these games will invoke a level of competition among the community and will encourage users to come back often to play these games. This effect is similar to what social games experience on Facebook. Monthly leader board winners can be given Lego credit to drive sales to their store.

Badges - Lego’s site is built with a lot of features that users may not be aware of. The site can use badges to raise awareness to these features and reward ideal behavior. The badges should award the use of all their features and build a focus around the web store. For example, create a badge to award creating and publishing a Lego robot that can be purchased from the web store. It should also be encouraged to share this accomplishment through various social media channels.

Summary
Lego has become a household name in current American culture. They have effectively built their brand and created a loyal following. They have also built an online platform that helps bring the offline Lego experience to their website. However, users of the website may not be aware of the extensive offerings on the Lego site. Given their strong existing offline community and their platform, Lego should consider using Gamification techniques to help transition their offline community to an online community and thus increase traffic to their web store and increase profit margins.

Jeremy Lin

I must admit, I am really excited about this guy and a lot of it has to do with him being Asian American and that he is a Warrior.  He also went to Harvard!

I can haz cheezburger?

I know I should be blogging about Google's impending entrance into social media or Disney's acquisition of Playdom despite slowing numbers for social media. That will have to go on the back burner for now.

I want to write about my favorite burger places today. I just came back from Los Angeles where I had possibly the most tasty burger of my life at Umami Burger. But I dine for the overall experience how would Umami Burger stack up to other burger places I have been to? I thought about this for a while and could not come to a conclusion without quantifying it. For this I created a spreadsheet of my favorite burger places that took the my individual ratings for taste, presentation and ambiance and the overall Yelp rating that the restaurant gets. I weighted to topics in order of importance and averaged the burgers score. I also wanted to know what type of value I am getting so I divided the burger score by the price. My methodology runs deeper but I don't want to get bogged down too much in the process.

I also added my friend Kent's burger in for fun and projected a possible price for him as well.

Cost

• 1 pound ground beef: 5.99
• Buns and Condiments: 2.00
• Total Ingredients: 7.99

Breakdown

• Makes 4 burgers
• Cost per burger: 2.00
• Projected Overhead per burger: 5.00
• Total Projected Cost per burger 7.00
• @ projected 30% mark up: 9.09

Criteria for selection:

• Burger cannot cost more than $15
• Less than 10 locations
• I must have devoured it

My Results:

Weighted Average = (Taste*4+Presentation*3+Ambiance*2+Yelp Rating*2) / 4

Despite my ultimate enjoyment of the Umami Burger, it appears that for the overall experience, Slow Club ranks higher. Good news, Slow Club is much closer, bad news, I will still miss Umami. Shake Shack is also a viable contender for those on the east coast. What I like about this place is despite lacking in presentation, you can take this burger down the street and eat in Central Park. My friend Kent's burger is also in the mix but you need a private invitation...sorry. There isn't really a big until Brickhouse, which is what I suspected, since that is really where I experienced a noticeable drop in taste. Gordon Biersch, Vals and Smokehouse lag significantly in overall experience and this tells me that I should avoid these places if money wasn't an issue.

However, money is an issue so I also want to know the value I am receiving.

Value = Weighted Average / Burger Price

Now the burger from Slow Club isn't looking so good anymore. In fact, Shake Shack's 7 dollar burger is overwhelmingly the best deal. Unfortunately, they are now 3,000 miles away. Smokehouses $4 burger pushes them into the number two spot, which makes a solid case to go out and have a burger from them. Kent takes third again, which means he may want to consider quitting his job and open a burger shop instead. In the mean time, I need to find ways to convince him to invite me over for more burgers. There are two sizable drop offs of .3 or more. The first between Shake Shack and Smokehouse. It appears that Shake Shack just has an awesome burger/experience. The second between Umami Burger and Father's Office, so whenever I am in the LA area, you can find me at Umami. Once again, Gordon Biersch is in the cellar so I will not be ordering burgers from them anymore.

* I used the McDonalds Big Mac as a reference because I wanted to see if there was really any value in going to a fast food restaurant. The answer is no!

What I learned from this:

• Umami Burger although still very good doesn't offer me the best experience.
• Kent needs to make more burgers
• I should continue to patronize Slow Club, Umami, and Shake Shack when I want a good burger experience in each respective city.
• I should continue to patronize Shake Shack, Smokehouse, and Umami when I want a good value.
• No more Gordon Biersch, Fathers Office or Vals for me.
• There is absolutely no case for going to McDonalds

TED Video - Matt Ridley

I was spending yet another exciting night watching TED videos when I came across this video. Naturally the title was intriguing but what this guy has to say is very insightful.



The escalation of our standard of living is based on sharing of ideas and innovations. Hunters can be hunters and gathers can be gathers and then they can trade resources. In this example Ridley points out that each individual can be specialists and become experts in their tasks.

Extrapolate Ridley's presentation to the current trend in technology, social media, and think of how fast the "sexual relations" of ideas can spread. Through blogging, micro blogging, videos, etc... users can easily learn innovations, cultures, and ideas they otherwise wouldn't be exposed to. This has sped up the waves of innovation as products have reached maturity more quickly, forcing companies to release newer products more frequently. Companies that do not, may fall victim to the proverbial "Frog in the boiling pot."

How games become viral

Lately I have done a lot of research into social gaming and what I have noticed is that many of these games have similar features. Farmville is like Farmtown and surprisingly enough, Mafia Wars and Sorority Life are very similar too. Yet Farmville has 64 million monthly active uniques and Farmtown only has 6 million. So what makes some of these games more popular than others?

The whole gaming environment has changed since the introduction of these social media games. Whereas, just a few years ago, games were popular if they were detailed, realistic and challenging. The introduction of social gaming has opened the market from 15-35 year old males to 15-60 year old males and females. Now the traditional games have become the niche and social media games have become the core.

What social media games did was create games that are easy to understand, engaging and takes very little time. Additionally, it seems the more complex the game is, the less viral it is. EA Sports FIFA should be getting a lot of traction right now, given the world cup and the marketing push by Playfish/EA. Yet their active users have started to level off at 2 million over the past week. It's not a complicated game but I feel you need to know who some of these players are in order to be really good at it. Games like Farmville reach a broader audience because practically everybody knows the basics of farming.

What makes Farmville more viral than Farmtown is that Zynga has been more effective at positioning their product. The games are naturally engaging to an extent but after a few hours it can become boring. Farmville tends to get users to invite friends earlier before the novelty has worn off. This effect engages the user even more because then it becomes a competition amongst friends.

In sum, if you create a game that is fun, easy to use, relatable and engaging, your game is positioned for virality. Now you must figure out how to monetize that....

The Final Days...

I have exactly one more night left in State College and then my MBA career will officially be over. It didn't hit me until I saw the slide show of the past 2 years of our lives. It's crazy to think how close my friends and I have become and how much we have grown (probably more socially rather than professionally).

Below are some experiences that has helped shape my MBA career and that I hold dearly. I am very fortunate to have experienced all that I have over the past 2 years:

Inaugural Party at Phillips - Walking into his Copper Beach house, I felt a sense of uneasiness because I was meeting everybody for the first time. Questions of whether they would like me and whether I would be accepted danced in my head.... and then I met Phillip, a fellow Niner fan! Although we disagree on the greatness of Joe Montana, I always had a friend to talk about my favorite team.

Purdue Case Competition - Between the first and second Mod, I entered a marketing case competition with 3 other first year MBA students, Sneha, Ilya, and Prashant. We drove 9 hours to Purdue to compete in a 5 hour long analysis, followed by a 30 minute presentation. Nonetheless it was an exhilarating experience in which we thought we totally blew it but to the contrary we took second, which extended our trip to Purdue a night so that we could celebrate with the Notre Dame team that came in first. Here is the blog post that I wrote.

Monday Night Football - Every Monday I drove to Scotts to watch Monday night football. The evening was filled with beer and wings from Wings over Happy Valley while we watched football with our computers doing "homework." Sampson, the dog that I dubbed the most disobedient dog I have ever met always tried to eat our food and eventually we would have to lock him in the bathroom.

San Franciscans in State College - In November, my friends Tyler, Kate, Deborah, and my girlfriend Lena, visited me in State College. The weekend entailed Deb taking down 5 Guys, 1 dollar beers at Tony's, and a football game in the rain. It was great having my friends visit all the way from California. I appreciate all of your support!

Prague - Our global immersion trip landed us in Prague where we drank every night and struggled to stay away during the day. I will always remember going to get coffee with Eleazar and the bus leaving without us. When they turned around to pick us up, the coordinator was not pleased with us. I also drank Absinthe for the first time and in opposition to what Jared says, that stuff tastes like shit.

Polartec - My summer internship consisted of my driving Margret and June around. Funny how Polartec did not mention that in my job description. They also failed to mention that Margret would make numerous attempts to donate my car to a local charity. The summer was filled with weekend trips to various New England destinations. I felt like a Vanderbilt, except for the whole asian thing, when I visited Newport. We also found a new job for June, a lobster saleswoman.

The rise of Choco - His real name is chocolate but facebook would not let me create an account with the name chocolate. He is a stuffed animal that Minaz won at Hershey Park and we took so many pictures of him that I created a facebook page. On a side note, I have never seen so many people afraid of a ferris wheel. You know who you are!!! cough* Varun! cough*

Weekly Ale House Trips - During the second year, the Ale House became a staple for my group of friends but honestly, how could it not when they offer 1 dollar blue moons for happy hour. Always great to see Blair order 15 blue moons right before happy hour ended, which worked great for Yvonne because she drank nothing but blue moon! Unfortunately for Nick and DJ, their girlfriends eventually quit the Ale House and were never heard from again. Conversations at the Ale House usually centered around several crushes on a several professors, imitations of fellow hand waving MBA's, and funneling down a three point speech.

Stanford Innovation - The theme was to create a video that showed how to make saving money fun. The team, consisting of Oscar, Natasha, Hector and myself, came up with a game to save on energy, water and gas. We were semi-finalists but unfortunately did not win. The video

AAMBA - The Asian American MBA conference was loosely a disguise to go to New York. Had a great time the night before, when I met up with Patrick (Patty Cakes as Richard would like to say) had bon chon chicken (53rd and 6th Chicken and Rice is better drunk food) and drank way too much. Conference was still useful, not too many companies that I was interested in but got to talk to Pepsi (only because I think their CEO is awesome), and Tmobile.

U2 in New York - Had a great time seeing U2 for the first time. Drove up with Kaushal (btw, thanks for all the rides to NYC) the day of the concert. Her aunt makes awesome food. If any of you are ever in the New Jersey area, I highly recommend it. The Concert was awesome! The Muse opened and even though I was never huge fan, they are great live. U2 was great, mixing a lot of their newer stuff with a lot of their older stuff. A bit theatrical at times but one of the best concerts I have been to.

Net Impact Leadership Conference - This event was held in Ithaca so naturally I had to call up my buddy Patrick to party while I was there. Sure it made listening to the lecturers a bit harder when I'm just trying to stay awake but I got the jist. ...be an agent for sustainable change,...community banks are great in theory but don't work,....invest in companies with a green focus!

Net Impact Case Competition - Our "controversial" entrance into the case competition was already an omen but a great experience even though it was the only case competition my team didn't place in. The team, Ryan, Rob and Christy worked tirelessly over the Thanksgiving break to learn about urban farming and sustainable farming methods to present a solution to the impending food shortage. Whether I believe there will actually be a food shortage as population rises is one thing but it's always great to find creative ways to improve the environment.

Duke MBA Games - I was a late addition onto the team but I'm glad I joined. Our Penn State team together raised over 4,500 dollars, over twice as much as any other school. Lots of fun watching Hector hurl a briefcase 4o yards, doing the crab walk relay race, and watching the dizzy bat participants try to maintain their composure.

Tailgating in the Nittany Gardens Parking Lot - Finally, the day of my move, the movers were 4 hours late and what I thought would take 2 hours took 5. So because I was missing own going away party, my buddies, Rob and Eleazar got beers and we drank in the parking lot while the movers moved. Nothing like a nice warm beer on a warm night.... I did finally make it to my going away at 1 in the morning.

Thank you all for the great times! Looking forward to the reunion in Austin for South by Southwest!

Topics in Entrepreneurship

Last week I had the good fortune of sitting in on the thought pieces presented by Professor Garud's 1st year entrepreneurship class. The topics were very unique and very intellectually stimulating. Needless to say, I learned a lot.

Some general thoughts as I heard the presentations:

Bootstrapping using viral marketing - Viral marketing is a very powerful tool but it has the possibility to be very dangerous as well. Two thoughts on this matter, with the proliferation of viral marketing, it will eventually lose its effectiveness. In the future, entrepreneurs need to innovate the way viral marketing is done. By this, I mean, the fun, engaging, personal form of viral marketing will evolve. What is important to understand, is what characteristics will be transferable and which will not.

Secondly, viral marketing can emulate the wrong message. Consider Molson's attempt to use social media and attract a younger audience. Their campaign attracted underage drinking and excessive drinking. 2 traits that are obviously frowned upon and a movement away from their brand image. Controlling brand image will get a lot harder.

Ecopreneurship- Solid presentation on a controversial topic. In order for this trend to take off, education on global warming and alternative forms of energy need to be enhanced. Maybe this topic could be linked with viral marketing to promote awareness.

Ecopreneurs should also understand that once the demand that they create is established, larger corporations like Chevron will enter the market. Either by acquisition or by research and development.

Institutional Entrepreneurs-Very applicable to the majority of the students as they will likely join an institution and will need to find ways to become innovative. Process innovation may be more applicable and easier to implement rather than product innovation. There are only so many companies like Apple and Sony who value innovation.

Social Entrepreneurship- On a side note, its encouraging to see so many individuals interested in social issues. What social entrepreneurs must realize is that while it is nice to do social good, their ultimate goal is to be sustainable. Community banks are a great idea but because they aren't profit motivated, they are at a higher risk to default. Thus there is the proverbial balancing act between social good and profit maximization.