Episode 01: The Real Magic Behind MagicBands (Transcript)

Jun 18, 2019



Intro (00:00):
Pixie Dust and Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher and Yasmine Spencer. As they explore the mouse’s $12.6 billion operation and break down exactly how you can apply these big scale concepts to your online business.

Nicole (00:21):
Welcome to this week’s episode of pixie dust and profits. I’m Nicole Boucher and I’m with Yasmine Spencer. And today we’re going to be talking all about magic bands. Now, if you don’t know what a magic band is, it’s a wristband that you wear at Walt Disney world. It is literally the keys to the kingdom. It unlocks your hotel room. It lets you into the parks. It even gives you access to a special line to skip the wait times for your favorite rides. Now magic bands came about because of a big problem that Disney world was facing in 2008, Meg Crofton, who was the president of Walt Disney world parks and resorts issued a challenge to her employees. She wanted to eliminate the barriers to the magic for the guests arriving at Walt Disney world. I want you to picture this scenario. You have spent thousands of dollars to go to Disney world.

Nicole (01:10):
You have heard that it is a once in a lifetime opportunity that everyone should go. At least one time. You’ve been traveling all day long. You’ve had delays. You’ve had layovers. Your family is melting down in the corner because it’s so hot in Florida and they just want to hit the pool. And you don’t even know which suitcase has the swimsuits. You arrive at your hotel and you look in front of you and there’s a line. There’s a line full of people checking in and checking out. And you don’t even know if your room is ready yet. And that is not a magical experience. Disney wasn’t having that. They wanted their guests to arrive and get straight into the magic. They know that they’re there to see Mickey mouse and they want to deliver that as soon as they possibly can. For that guest, they have spent money to be there and Disney, no doubt wants them to spend more money.

Nicole (02:00):
And they’re not going to do that if they have people waiting in a line, as soon as they arrive. So they started envisioning ways to reinvent this process that a guest goes through from sitting in their home, booking their vacation, to arriving on property. They wanted the entire experience to be seamless, to be joyful, and to bring that magic that everyone expects when they watch those commercials advertising to come to Walt Disney world. So this challenge was issued in 2008, to come up with some ideas, to fix this experience for the guests. And in 2010, the vision really started to get off the ground. They had this idea of a single system that seamlessly connects all of these pieces together. And that became the magic band. Now, I want you to think about your business and the different projects that you’ve done to launch a new product or to simplify your systems or anything that you may have worked on over the years.

Nicole (02:53):
Do you know how much work went into just one piece of that? Let’s say you were launching a new program and you needed a marketing and you needed to create the program and you needed to record all the content and all these moving pieces. Right? Well, think about it on the scale that Disney was talking about here with this vision in 2010, they wanted to create a queuing system for fast passes. You know, something that allows people to book their spot in line at home before they arrive at the parks. And there’s so many variables there, right? You’re not just booking for a single person you’re booking for your whole party and you have to book in 15 minute increments. Oh, and you also have to have your park tickets. So then they needed to create a whole system that housed your park tickets and the turnstiles and the park to actually access the fact that you have your park tickets already.

Nicole (03:39):
They also had to connect 30,000 hotel rooms to a single system so that they would know if a room has been cleaned or not. If it’s available a text messaging alert system to allow people to get a notification that their room is ready so they can skip the front desk. They also created a whole new system for every single cash register that had to be connected together so that you can check out with your wristband when he want that Mickey bar that you’re walking past, no need to carry your wallet with you. You can actually get it with your magic band. So think about all of these systems that they had to put together. They had engineers working on every single one. In fact, the engineer who worked on just designing the magic band itself, the physical product spent six months doing it. And that’s because Disney is smart.

Nicole (04:27):
They wanted to make costs as low as possible for these bands that they were going to be giving away. But people of all shapes and sizes come to Disney world. People of all ages come to Disney world and that band needed to fit a wide range of people. And so an engineer spent six months working on this design and it’s actually really ingenious. So when you book a Disney vacation, eventually in the mail, you will get a package of magic bands and they have your names on them. It’s super special. It’s all Disney fied. It’s the most magical site for a young child. Who’s opening up this box to understand that like they are getting their keys to the kingdom. They’re finally getting to see Mickey mouse. And those bands are all the same for all of us in the whole family. And they’re really ingenious because you just tear off a piece of the design.

Nicole (05:12):
So that way it can fit a small child’s RIS. And this is brilliant from Disney’s perspective, they only need to have one mold to make all of these bands to fit all of these people. And that took an engineer six months. So you can just imagine how long it took other engineers to build the other pieces of the system and then get them all together. This was not going to be a cheap project and it wasn’t something that they could fit into the current budget. They needed to go to their board of directors and get approval before they could move forward with something of this scale, the price tag or the estimated price tag I’m putting magic band system in place was one $10 billion with a B $1 billion. Okay. And they had to go in front of their board of directors to get approval, to spend $1 billion on this crazy, huge idea and concept.

Nicole (05:58):
And in order to do that in 2012, they put together a full scale live demo, where they broke down a giant room into little cubbies, and each cubby represented a space in the journey of the customer, starting with the person, sitting at their computer about to book their Disney vacation and walking them through, arriving at the Orlando airport, taking a bus to get to their resort and going straight to their room to drop off their bags because they don’t have to go to the front desk and walking them through the entire process that you had experienced if you went to Disney world today. So the board of directors who was filled with people like Steve jobs and Sheryl Sandberg, they ended up approving this $1 billion expense and it started getting off the ground, but it still took quite a while to get into effect. So the board of directors meeting was in 2012 and they didn’t do public testing until the summer of 2013.

Nicole (06:49):
And I was actually at Disney world when they did this test, I wasn’t at the resort where they were testing. I was at the sister resort to it. So I remember getting on the buses and hearing people complaining about these magic bands and how they were locked out of their hotel room. And they’ve had to get help. And they’ve been just such a nightmare, but they got some free, fast passes for participating and for all the troubles they had. So they were still happy about it because they got to go on rides that they otherwise would have had to wait in a really long line for. And I just remember sitting there feeling so left out because I didn’t have this really cool Mickey band on my wrist. And it’s fascinating to save her. This has all come from, from an idea on the floor to a $1 billion investment that has definitely paid off for Disney. And, you know, Yasmine’s going to talk a little bit more about the return on investment on this $1 billion product.

Yasmine (07:36):
All right. So there are so many directions that we can go with this, but the first thing that I want to talk about is something that you probably experience when you’re in the parks with your magic band. It’s a cashless system that they’ve essentially created for all the park visitors. So I don’t know about you, but I’m walking in animal kingdom and I see a really cute pair of ears. And it’s just so easy for me to pick them up, scan my magic band on my wrist and not have to pull out my credit card and I’d have to pull out my wallet, worry about cash, worry about fumbling with coins and just make that purchase, enter my pin number and just get out and enjoy the parks. It streamlined things so significantly to the point that, you know, for a lot of customers at Disney world, these purchases are almost mindless and you don’t really realize that you’re spending as much as you are until you check your hotel bill.

Yasmine (08:23):
I remember my first time at Disney world with the magic band in about three days, my now husband and I spent around $700. And I was like, how, how, but when you look at all the food that I was able to buy all of the souvenirs merchandise, it just, it adds up. So it makes it really easy to purchase. So I imagine Disney experience, instant ROI just from that capability alone, but let’s dive into the business intelligence element of magic bands. So what Disney has done is they’ve created a tracking system that basically ties in the in-home experience of the actions people take at the parks. You know, they can track how you’re navigating on the website, through their website analytics. They can track how long it makes you to take a purchase. And then once you’re in the parks, they can actually track what you’re doing.

Yasmine (09:12):
So where their ability to track where you’re coming from comes in handy is Disney has a lot of ticketed events that are special events that happen after hours. So if you’ve been to, Mickey’s not so scary Halloween party, or Mickey’s very Merry Christmas party or something that we recently did, which was magic kingdom after hours. Those are events that you have to buy an additional like ticket to, that’s not included in your day pass in order to attend. And what they do is they actually give you response that denote, who is attending the event and who’s not, but if you have a magic band, your ticket is on your magic band as well. You still get the wristband. So park staff or cast members, as we like to call them can actually determine if you are there for the event or not.

Yasmine (09:55):
But I imagine that Disney can actually look at their big map and see who doesn’t have the special ticketed event pass on their magic band and, you know, round up those people and usher them out. So, you know, they’re not able to sneak in and stay in after the park closes two general guests for the day. So that’s like one element that they can leverage the magic bands for. But going back to the business intelligence piece, being able to understand quite literally what that path to purchase is, is such a powerful tool for Disney. They can evaluate endless data and, you know, maybe too much data, but identify these trends and patterns that let them understand what steps people take before they make a purchase. Maybe before you end up purchasing that pirates of the Caribbean little sword that they have in the gift shop, you ride the ride like two or three times with your kids. And that’s when you make the purchase. That can be a really powerful piece of data for them to note, because then they can predict things like when you will likely purchase how much revenue that they can make from an individual guest. And from there be able to make other projections for future planning purposes.

Nicole (11:05):
So, you know, for me, I think it’s really interesting because I’m like an operations nerd about it, but I just see that they are tracking so much data. Like what time did they scan into their hotel room? And what time did they scan into the park and which section of the park did they go to? And when did they leave and what time did they have a lunch? And, you know, it might not be amazing information on an individual level, but grouped with everyone else that’s visiting Disney. Now they have an entire picture of how long it takes someone to get through all the rides in each section of each part and the most popular times for lunch or dinner. So they know how to staff, like obviously lunchtime is noon and dinner time is five or 6:00 PM, but they can appropriately staff knowing those trends maybe on a night that has fireworks people eat earlier or later who knows magic bands do. So I just think from so many different areas like Yasmine talked about, there’s the spending more money, there’s the crowd control aspect. They’re actually known to know where everyone is so they can deploy characters to disperse crowds. So if there are long lines at a certain ride, they can get a character out there to kind of disperse where everyone is.

Yasmine (12:19):
Speaking of staff, Nicole, one other way that Disney probably makes money for the magic band system is the fact that through technology and through the magic bands, they can actually increase the number of actions a guest takes themselves that doesn’t require them to rely on staff. So let’s talk about the check-in process again, right? You don’t have to go to the front desk and wait in line to get your details to go to your room. That probably decreases the number of people that they need to actually man, the concierge in each lobby because magic bands take care of that for you. When it comes to being able to like, pick your FastPasses and do it on your phone, that minimizes the number of machines is the Disney actually needs to have at the parks to spit out fast passes or you know, cast members to help you sort that out now, Disney is wonderfully overstaffed. Sometimes it seems with cast members there to help you at any point, but I can guarantee you that magic bands actually minimize the number of people they really need from a customer service standpoint, to keep the magical experience as awesome as it is.

Nicole (13:20):
And I know we’ve talked a lot about the business benefits to Disney on this, but I also want to stress that like they do all this with a customer focus they call their customers guests, and it really stems from having a better experience for your guests. None of those long lines that you just feel frustrated. And none of those toddler meltdowns, because you’re sitting in a hot sun, it’s also really fun. So magic bands themselves are colorful. You can personalize them. They come to you with your names on it. It’s actually the primer for your trip to get really excited. They arrive at your door maybe a month before, and there’s one for each of you and your party. You each get to pick your colors, unless you’re Canadian, you have to pick them up at the gate or have an American friend they get sent to.

Nicole (14:05):
So yeah, you get to customize them and you can actually buy your own. And so I have a Minnie mouse one and my husband has a Darth Vader. One. My son even has his own and it’s because he lost his, we couldn’t find the special shade of blue that he really, really loved. And so we convinced him to make a custom one. And the only reason he agreed was because it could have Mickey mouse and it could have his name on it. So there is an option for everyone and they also do really fun things. So I am a Disney vacation club member. When I get into a part, I touched my Mickey to the Mickey turnstile. It lets me in and the light turns purple. And that purple is an indicator to the cast member that I’m a Disney vacation club member. And so they turn around, they say welcome home. And there were probably a million other vacation club members there. But in that moment, they acknowledged me that I’m a special guest at Disney world that I own a tiny, tiny, tiny little piece of it. And I will be coming back because I’m a vacation club member. So they say welcome home. There’s also lots of really fun things that other magic bands can do when you get into the turnstile and I’ll let Yasmine share hers.

Yasmine (15:16):
Yeah. So I recently got a special edition Wreck-It Ralph magic band. And every time I scan it, it lights up a whole bunch of different colors and then play some music for the movie, which is super fun. One other thing that I want to say about the data that helps improve the guest experience for magic bands is very recently. In fact, Nicole was sort of with me at the time. I went to Disney world for my bachelorette party, but like literally prior to that, I went to Disney world with Nicole and, you know, we got to have fun in the parks, but because I had told one of the cast members when I was inquiring about my trip earlier on that I was going for my bachelorette, I saw on one of the screens that it popped up with my name and said bachelorette and I noticed, okay, so that’s how the cast members know to say, congratulations on your upcoming nuptials or your upcoming wedding. Even though I wasn’t wearing like any indication that I was there for some sort of bachelorette celebration, so that in itself can make the experience seem much more magical because the cast members end up being all, knowing about all the things that you’re celebrating at Disney.

Nicole (16:16):
I was there for my birthday one year, and it’s just part of the fun to get, you know, you don’t even have to wear a pin anymore that says happy birthday. You’re just getting on a ride. And a cast member will visibly stop in turn. And Oh, I didn’t say happy birthday. Like you see their face light up the saying, I need to say happy birthday to this person. And it is really exciting as a guest that’s there right

Yasmine (16:38):
Now. We’ve talked about our favorite magic bands. We’d love to hear what your favorite magic bands are too. So make sure to get at us on Instagram at pixie dust and profits and comment on any of her posts and let us know what magic bands you’re rocking in the parks, because we’re definitely curious. Now let’s turn the script and talk about you and what you can learn from how Disney leveraged his magic bands to make a better guest experience, but also to make them more profitable. And the lesson here is measure, measure, measure what magic bands give Disney is a goldmine of data. And you can have that too in your business without having to spend a billion dollars for the infrastructure, because thankfully there are tools out there for you. So a couple of ways that you can sort of leverage this Disney mindset about tracking is look at your website.

Yasmine (17:28):
For example, if you install Google analytics, it tells you how people navigate through your website. You can look at your results and maybe figure out if there’s a specific blog post that you would put up. That’s actually driving people to your contact page or to check out and purchase a product that can be very powerful in terms of knowing what type of nurturing your audience needs before they actually make a purchase for me, or reach out to you. Then you know that you can create more of that content to either increase your sales or increase your inquiries. That’s super powerful.

Nicole (17:59):
And I just want to stress that as someone who is looking to start to gather metrics like metrics is a word that sounds scary, especially if you’re like, I’m not a numbers person and metrics doesn’t necessarily have to be about numbers. I would encourage you to stop and think about what things would be important for me to know about my customer. So that way I can sell better to them or I can deliver better to them. So that could be something like, I want to know how long it takes someone to purchase from me. And that’s not a number, right? Like that phrase right there is not a number. It is okay. If someone joined my email list today or started following me on Instagram today, when can I expect them to actually buy something from me? And once you know the question you want to answer, do, you can start thinking of the different ways that you can gather that data.

Nicole (18:46):
So, you know, on your contact form on your website, you can put a question that says, how did you hear about me? Or when did you first hear about this brand? And then you can start kind of getting data points along the way. If you sell products on your checkout page, just one question, I wouldn’t put too many things on there, but whatever you want to know, the most you can put on these certain key places for people to answer. And then you can start gathering that data and suddenly they become metrics that help you run your business or make decisions about your business.

Yasmine (19:17):
Another thing that you can do is look at your email software. You’re probably deploying emails to your audience. If someone has purchased from you, just check to see when they joined and what opt in, or what point did they join your list from that in itself can give you a lot of data about how long it takes for someone to become a customer from being completely cold.

Nicole (19:39):
And if you have a higher ticket offering, and you’re wondering how people are buying that or where they came from before check, you know, if you have a mastermind program that you run or something like that, check to see if the people in it bought from you previously and what they bought. So now you know who you need to go to, to get them into your highest ticket offer and vice versa too.

Yasmine (20:02):
The lesson that we learned here is it’s better to track everything and have all those markers in place, even if you’re not using them right away, because we guarantee that at some point, you’re going to ask these questions and you’re going to want to know the answers, and you’re going to wish you had those systems.

Nicole (20:17):
So the big takeaway here is that right now, you probably don’t know enough about your people or your products or your services, and that you need to measure, measure, measure. So think about what’s important in your business, what you want to track and just start tracking it. The first thing that you can do is you can install Google analytics on your website. We’ll include information on how to do that in our show notes. It’s not as hard as you think it is. And if you already have it, then I’m going to encourage you to actually sign in and look at what it’s telling you. And we’ll give you a quick little overview of what you can find in there. And it might surprise you for the second thing, go to your contact form on your website. You know, the form that people fill out to send you a question or an inquiry.

Nicole (20:58):
If you have an application for people to work from you, work with you, then go to it and open it up, check your questions. Are there any data points that you want to start collecting? So for example, I asked, how did you hear about me? And that gives an opportunity for someone to either send, say it was a referral from another client, or maybe they say Instagram. And so later on having all of this data of all the contact forms submitted to me, I can see that, Oh, 40% of the people find me from another client. Maybe I should go reach out to my past clients and give them a little gift or just wave. Hello. Hey guys, I’m still here and I’m, do you know anyone? You can refer to me because I’m looking for some work or, you know, if 60% said Instagram, then I know when I do my paid advertising, if I do paid advertising or just where it should focus, time and energy should be on Instagram.

Nicole (21:50):
So asking that one question can make a decision for your business that you otherwise wouldn’t be able to make with confidence. And then the last thing that you can do is if you’re a product-based business, you can do the same thing with either the form that they check out. If you’re able to customize that at all, you know, when they’re filling out their shipping information and their coupon code, just adding a line in there about how they heard about you or whatever else you want to track. Or if you can’t edit that at all, then the thank you page that they land on, or the first email that they get that says yo shipping confirmation, because that email is the number one open email people, everyone opens the confirmation of the thing that they purchased. So if you have something really important that you want to know, ask it in that email.

Yasmine (22:35):
So thanks so much for tuning in to our first episode. We hope you’ll take these lessons and apply them to your business. And we hope we taught you a little something new about the disease. So make sure to follow us on Instagram @pixiedustandprofits, make sure to check out our show notes for all the resources that we mentioned in this episode. So we’ll hope you join us next time on our next episode, where we’ll be talking about how Disney turns Instagram trends into products. Join us on our next episode, where we’ll be talking about how Disney turns Instagram trends into products. Thanks so much for joining us.



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