---
title: "First-rate companies serve users, second-rate companies make products, third-rate companies chase traffic"
description: "Companies that chase traffic cannot outdo those that make products, and those that make products cannot outdo those that serve users. LEGO's turnaround from product-centric to user-centric thinking illustrates this principle, as it shifted focus from fleeting trends to timeless human needs, leading to its resurgence as the world's most profitable toy company."
author: "响马老苗"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-22"
language: "en"
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---

# First-rate companies serve users, second-rate companies make products, third-rate companies chase traffic

> Companies that chase traffic cannot outdo those that make products, and those that make products cannot outdo those that serve users. LEGO's turnaround from product-centric to user-centric thinking illustrates this principle, as it shifted focus from fleeting trends to timeless human needs, leading to its resurgence as the world's most profitable toy company.

**Companies that chase traffic cannot outdo those that make products, and those that make products cannot outdo those that serve users.**
**-01-**
Since the 1990s, electronic toys filled with sound, light, and various IPs have become increasingly attractive to children.
As one of the world's largest toy manufacturers, LEGO naturally would not miss this "trend."
So LEGO shifted its operational focus to products like "Star Wars" and "Harry Potter." During the peak popularity of these films, they brought substantial profits to LEGO.
Subsequently, LEGO phased out its "aging" preschool toy brand "LEGO DUPLO," replacing it with "LEGO Explore," which was considered more in tune with the times.
However, these products, which seemed to "follow the times" and "follow the market," brought unprecedented crisis to LEGO.
In the second year after the release of "Star Wars" and "Harry Potter," LEGO's related products experienced sluggish sales.
Moreover, "LEGO Explore" did not win market recognition; instead, it confused customers, who thought LEGO would never produce building blocks again.
In 2003, LEGO suffered unprecedented huge losses, and rumors circulated that it would be acquired by Mattel.
After painful reflection, LEGO began to change its thinking. **They shifted their gaze from the dazzling market to living users, from ever-changing trends to profound, unchanging human nature.**
Through observation, interviews, and analysis, a deep insight pointed the direction for LEGO's strategic adjustment:
**The two essences of children's play: freedom and achievement.**
Play is a delightful escape from parental supervision, a comfortable enjoyment in a free world; it is also a rare source of achievement in a child's world.
Based on this insight, LEGO made two major strategic adjustments, shifting from product-centric to customer-centric.
1. Focus: The product line was re-concentrated on building block toys, targeting boys aged 5-9.
2. Adjust values: Shift from emphasis on product details to play and educational experiences.
The slogan was changed to "Play On," and LEGO's core values of "creativity, imagination, learning, fun, and quality" were integrated into brand promotion and marketing.
Reconnecting with customers, LEGO regained market recognition.
In 2015, after years of rapid growth, LEGO surpassed Mattel, which had once tried to acquire it, becoming the world's largest toy brand.
In 2018, despite a global toy market decline, LEGO still achieved revenue of $5.55 billion and an ultra-high net profit of $870 million, far exceeding the second-place company, making it the world's most profitable toy company.
**Evolving from "making products" to "serving users" was the key leap in LEGO's dramatic turnaround.**
**-02-**
There is a saying in e-commerce:
**"Those who chase traffic cannot outdo those who make products."**
Actually, this saying should be supplemented with: **"Those who make products cannot outdo those who serve users."**
The great Drucker said: **"The customer is the only profit center."**
Similarly, the great Ren Zhengfei said: **"Customer service is the only reason for Huawei's existence."**
Although products are the most critical carrier for meeting user needs, there is a fundamental difference between product orientation and user orientation.
The keywords for making products are: **trend, category, technology, function, concept, quality, product line.**
The keywords for serving users are: **human nature, experience, resonance, satisfaction, recommendation, community, and lifetime value.**
**Making products focuses on change, testing the ability to seize opportunities.**
**Serving users focuses on constancy, testing the ability to understand human nature.**
LEGO saw the trend of electronic toys and developed "Star Wars" and "Harry Potter," which was based on the logic of making products.
Later, by gaining insight into users' essential needs and shifting from focusing on product details to creating "play experiences" and "educational experiences," that was the logic of serving users.
Consider a restaurant.
Constantly hyping long queues, expensive steaks, and Mercedes-Benz delivering roujiamo is chasing traffic.
Launching signature dishes, creating bestsellers, and positioning as Northwestern or Northeastern cuisine is making products.
But like Haidilao, having a service that always impresses or even moves you is serving users.
**The purpose of making products is to get customers to transact; the purpose of serving users is to build relationships with users.**
**Serving users does not negate making products.**
**Rather, it treats "serving users" as the yardstick for "making products," "setting strategy," and even "building brands" and "channels," with veto power.**
Just as LEGO still retains the "Bionicle" series, Huawei still needs to continuously build its brand, and Coca-Cola, Nongfu Spring, and others still need to maintain their channel competitiveness.
But all these belong to the "cost center."**
**Only by centering on the "enterprise's only profit center"—users—can your products, brands, channels, traffic, promotions, and communications achieve effective returns.**
**-03-**
More than a decade ago, a saying circulated in the business world:
**"First-rate companies set standards, second-rate companies build brands, third-rate companies make products."**
Now it is rarely mentioned. The environment has changed, and it is no longer applicable.
**"Standards" were the commanding heights of the industrial era.**
Mastering standards meant grasping the industry, being able to "hold the emperor hostage to command the lords," and gaining the initiative or even the highest say in market competition.
However, in today's fragmented information and stratified communities, users are the "standard" setters, the "emperor."
Even the smallest individual has channels to express needs, and even the smallest niche can assert its personalized claims.
**Users are no longer constrained by "standards" or represented by companies' self-proclaimed brand propositions.**
**Only by getting close to them and managing them with care can you win their long-term, continuous support.**
Recently, a video blogger visited the Goubuli bun shop in Beijing's Wangfujing and posted a review video.
The review concluded it was "tasty but expensive" (actually "bad and expensive").
The shop was very moved and chose to call the police.
Fortunately, the Beijing police did not, like some local police, immediately arrest the poster. Otherwise, the shop would have become even more famous.
Although "Beijing Wangfujing Goubuli" quickly retracted its statement, netizens still mocked it extensively.
A video that originally had only tens of thousands of views was turned into millions of views, with over a hundred million hot topic views across the internet.
Now, not only does the whole country know that your buns are "expensive and bad," but they also think you are "ignorant and arrogant."
Without even basic respect for customers, if this continues, it would be unreasonable not to go bankrupt. (Goubuli Group has publicly apologized and revoked the franchise rights of Beijing Wangfujing Goubuli)
If you don't manage users, what if you are a "century-old brand"?
If you don't manage users, what if you have "thin skin, big filling, eighteen pleats"?
If you don't manage users, what if you are "Fortune 500," "sales far ahead," "100 awesome technologies," "wrapping around the earth more than 1000 times"...
You will still be eliminated.
Marshal Chen Yi said, "The victory of the Huaihai Campaign was pushed out by the people with small carts."**
**Any great brand is spread by word of mouth from users; any great enterprise is voted for by users with the money in their pockets.**
Source: Lao Miao Si Yingxiao (ID: yiheyingxiao)
Tips will be paid 400-2000 yuan once the tip is adopted.


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