What the diamond industry should learn from the master toymaker, why thinking like a fish might help our business, and why recent arrogance should inspire us all to do some soul-searching.
More than 50 years have passed since the Lego brick was first introduced into the child’s playroom. The world has changed dramatically over the period, and along with it the technology of toys and games, but Lego has remained a constant. Indeed, even through years of economic crisis, the world’s strongest toy brand continued to expand and strengthen its value. How could that be?
Traditionally diamantaires have clung to the excuse that diamonds, as non-essential luxury products, will always be among the first items to be erased from the shopping list in times of crisis. Sounds logical? Maybe not. For how else would you explain the fact that in 2008, at the height of the global economic crisis, Lego, which is certainly not the least expensive toy in the market, saw a 31% increase in profits over the previous year, with sales during the same period rising by 17%.
What did Lego do differently from other companies during that period? For starters, instead of blaming the customer, it took control over its destiny. It stopped trying to create demand by force, eliminated unprofitable assets, and focused on core activity and expertise in generating profits.
THINK LIKE A FISH NOT LIKE A FISHERMAN
During the difficult years of the global economic crisis, Lego did several other things that the diamond industry could learn valuable lessons from, and so cope better during the tougher times in which it periodically finds itself.
This was no ordinary fisherman. He was the among most successful of all time, always returning from the sea laden with fish that had been caught without the use of special technology. No one could understand how he did it.
Finally, when asked about his technique, the fisherman replied that his insight had come not through the study of fishing, but rather through the study of fish. He invested time and effort in learning about the different types species, their feeding times, and the effects of weather, ocean circulation, the winds and the light on their behavior. He learned their habits, their sensitivities and their responses to changes. And while his competitors were busy polishing their hooks and improving hunting technologies, he started thinking like a fish. The results spoke for themselves.
On several occasions of late, I have heard industry leaders stating: "We must educate the client." Perhaps such arrogance indicates the root of the problem. For what they pretentiously are thinking is that "its not me, it's you".
Lego’s basic premise is that its consumers ultimately prevail. The product needs to address the customer’s needs, and not the other way around. If the toy is perceived as not being fun to play with, kids will not ask their parents to purchase it.
Successful marketing is not simply an exercise in selling as much as we can, but rather in providing a compelling consumer experience.
Lego encourages employees to bring their children to the office and play in the rooms that are used to test new products. The company is not only interested in seeing if the kids are able to assemble the models, but also to understand which particular aspects of the product they like and what aspects they do not. Improvements are then made accordingly.
Lego understood that to sell to a child, you need to be able to think and experience like a child.
STICKING TO OUR CENTER OF GRAVITY
Creating added value requires that business understands its center of gravity. Lego knows that to be its ability to create meaningful construction toys based on the endless adaptability of its famous bricks. The company realizes that, as long as it can provide children with many hours of enjoyable playtime, parents will be prepared to spend money on what clearly is an expensive product.
According to IDEX Magazine, in an article from May 2008, 95% percent of all jewelry sold in the world is for women. Our center of gravity, therefore, needs to be diamonds that speak to wants and desires of women.
It does not matter who makes the purchase, for the individual at the end of the value chain is the reason for the purchase. So the question one invariably should ask: "What do women want?"
That is what we should learn from Lego. Our added value should be primarily contained within the compelling experience enjoyed by women in purchasing or receiving an item of diamond jewelry. If we can do that, the sales will follow.
Our industry needs to learn to walk in women’s shoes, metaphorically so to speak.