Episode 37: The Why & How Behind Discontinuing Products (Transcript) - pixiedustandprofits.com
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Episode 37: The Why & How Behind Discontinuing Products (Transcript)

Feb 9, 2021

The

podcast

Intro (00:02):
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 own business.

Nicole (00:27):
Hey everyone, welcome to the first episode of season four of pixie dust and profits. We are so excited to bring you more Disney meets business operations strategy and insights over the course of this season. So we’re starting off with taking things away from people. It’s probably not the most fun topic, but it’s something that we encounter in our businesses all the time. And it’s really driven by recent announcements from Disney about things they’re taking away that have been staples for a very long time. And you know, some of this is probably due to COVID. Some of it could be due to the opportunity presented by the challenges of coronavirus, where they can make some changes to their business. I know that things that were set to be created, especially with the 50th anniversary of Walt Disney world, coming up, have those projects have been canceled or postponed.

Nicole (01:23):
So there’s a lot of decisions being made at the top. And today we’re talking about two very important ones that hit Disney fans hard in some ways. So first up magical express, which we have an episode all about how much we love magical express and why it’s such a great tool. Magical express is the bus service that exists from the airport in Orlando. So you no matter which airline you’re flying or where you come from, if you were staying on a Disney property, you can take that thus to your property and Disney handles your luggage for you. So essentially you step off that plane and right into the magic because you are surrounded by Mickey, from airport to resort, and you don’t even see that the world exists out of this. Now we all know about Disney’s transportation system. Once you’re on the resort property, how they have trams and Skyliner and buses going in all directions.

Nicole (02:19):
So if you can take the magical express from the airport to the Disney property and use their internal transportation network, you were probably much more likely to stay only on Disney property because he didn’t rent a car and you don’t have a way to leave Disney property. The longer you stay, the more money you spend. So we’ve always touted this as such a great way for them to increase that average customer value, right? Although the money that one person could bring in personally speaking, I love magical express. It’s probably not as important anymore as we get older because my son doesn’t necessarily need a car seat for much longer. I think in, he might not even need to wear one, but that’s not how we play because we were one at home. So we’re going to wear one on vacation, but we were able to take the magical express and it’s a bus.

Nicole (03:08):
So he didn’t have to have a car seat. We didn’t have to rent one. We didn’t have to trust that a car rental company had a safe one or that we installed it safely in the parking lot. You know, it was just such a relief to be able to step off the plane. No, that there was a space for us to get to the resort without having to add another line, to rent a car and to get to the property navigating directions. As soon as I land is not something I ever loved to do, but as my kid has been getting older, we have been taking Uber to get there when we wanted to get to our resort fast or with our own luggage. So I can see the business case they probably had for removing something like magical express. And then the other piece of things too, is like when you have a really big group of people.

Nicole (03:55):
So we have had multiple trips where people have flown in from different airports. So we could all be on vacation together. It was really great to be able to take that magical express together and be together because we met in the airport and got on the same bus to our resort. And so that option’s gone. So I’m a little bit sad about this change and, and I know Yasmine has an experienced, magical express with a child in tow, but, you know, I think she’s used it and loved it as well. So I’d love for her to jump in with like her experiences with it and you know, how she feels about the change.

Yasmine (04:26):
I mean, I am definitely bummed because it was just so convenient. In fact, I know the whole like Disney picks up your luggage and brings it to your hotel room is a little like controversial in the sense of sometimes they don’t bring your bags to your hotel room until really late. And that can be a huge bummer if you’re landing earlier in the day, but it was just such a seamless experience. It was great to like, not have to worry about that. It was great to like, just not have to worry about flying down again, like a car or like a Uber or something to get there. And like, this is a bit challenged, but I get really jazzed about like the welcome video that they play. And I get like super excited with the music when you like hop on and, you know, I’m planning on going to Disney at some point, if the borders ever opened with my little girl and I really wanted you know, to go on magical express because like Nicole said, didn’t have to worry about a car seat, but it looks like once it officially goes away at the end of, I think it’s 20, 22.

Yasmine (05:25):
Right. so it’s around for another year. We’re going to have to look to something else, but the reason why Disney is actually getting rid of the magical express or the rumored reason is that the city is building a train from the airport all the way to Disney Springs. So if there is now a direct line that will probably cost money against talking to me free and built into your vacation, if you’re staying on property like the magical expresses, it sort of alleviates Disney from having to sort of carry that like burden. So to speak of, I don’t

Nicole (06:01):
Wanna say so helps them with their, their green goals, their sustainability goals, because I’m I imagine, or running a bus system through mayor’s transportation. It was actually a third party that handle it all. If it wasn’t profitable because so many fewer people were using it now that things like Uber and Lyft exist, but also a lot of greenhouse gas emissions that they don’t need to do. If they have a high-speed train that can get you to Disney Springs. So I think that they’ll probably do their best to recreate that experience in some way, but when it’s not a Disney owned train, it’d be interesting to see how themed did they can get it. So that way you feel like you’re in the bubble when you are on it, I’m sure that once you land in Disney Springs, it’ll be completely themed and you’ll be able to find a bus to get to your resort or whatever.

Nicole (06:53):
Maybe I’m also really bummed because they’re taking this away at the same time that they’ve taken away vans, which were like my love of dad, jokes aside, minivans have been amazing for, for us to get from a really far away resort to a place we wanted to be. And my parents being disabled, we were able to call one that was like handicap accessible to get us somewhere a little bit more easily than trying to take the internal transportation network, but you know, things change. So the other thing that’s really big that is changing that they’ve announced recently is for annual pass holders at Disneyland.

Yasmine (07:33):
Yeah, this was a huge bummer to pretty much everyone in California. They are sunsetting the annual pass holder program and actually giving refunds to anyone who’s currently holding an annual pass due to the ongoing shutdown of Disneyland. Remember now Disney world has been open for since July, but Disney land never opened after things shut down in March. With the state of coronavirus in Anaheim, they’ve never really reached the appropriate levels of like, you know, community infection to open up the parks again. So it’s been shut down. We’re almost going on like a year now, Matt, like, man, it’s going to be a year in like a month and a bit a month and a half that Disneyland has been shut down. And because of obviously the culture in California and the relationship locals have with Disneyland, it’s not quite like Disney world where, you know, you go for like a couple of days, even as a local, like a Disney world, there’s like so much to do because there are four different parks, you know, dozens of resorts and experiences, the Disney

Nicole (08:42):
Store we have built in crowd distortion because just so much land. Exactly. Whereas

Yasmine (08:50):
With Disneyland, there’s only two parks. If you go, you can honestly like hit up everything in like three days. I know I’ve, I’ve gone to Disneyland since I was like a kid. I have family in California, so we’d go every summer for the day. And you know, that usually gets you an idea of like the full park or one park, at least. So locals would just like go up to Disneyland for like dinner or, you know, just struck by for like a few hours to sort of like you were going to the mall, you know, they would just use their annual pass and go whenever. And obviously this created a few issues for Disney as they look to reopen in the future. We don’t know when that is in a post coronavirus land. Hopefully it’s that? Well one, how are they going to limit crowds if they’re sort of beholden to giving these people access because of their annual passes, if they want to incorporate any like limitations with the smaller parks and increased crowding, they’re going to have to turn away some pass holders.

Yasmine (09:51):
And I know in Disney world, in Orlando, they’ve implemented the park reservation system, but unlike Disney world, Disneyland is only 500 acres total of space and Disney world is 25,000. So it’s 50 times bigger. And as you can imagine, it’s a lot more difficult to accommodate a higher volume of people. So they’re killing the AOL pass holder program and it looks like it’s permanent. Refunds have been given and people are really bummed. They feel like something that is just been like a staple of living in Southern California has been taken away from them. And now if they want to drop by, they’re gonna have to pay the day ticket prices that everyone else does the question. Now

Nicole (10:38):
We’ll have like a California resident discount for a day pass or something like that. But I mean, when you’re making some of the decisions that you have to make in your business and you’re thinking, okay, there’s going to be a huge influx of people who want to be on vacation and want to get away. We know that’s coming because we’re all, we’re all grouped up, we’re all ready for it. So they know that’s coming and they know, well, how can we reduce the number of people in the parks? What are some ways that we can do that? And they can have case studies out of Walt Disney world right now. And they can see, okay, well, we can have, you know, certain rides are closed and you know, restaurants are closed. We can kind of dis-incentivize people to come in because perks have been taken away there, no parades, you know, things like that.

Nicole (11:22):
They, yeah. I mean, they could potentially do some of those activities safely, but they’re choosing not to. Cost-Wise and also because, you know, they don’t want as many crowds. They want enough to make it at least pay for itself and maybe make a little bit of money. Right? So, so then you start looking at your data. You start looking at everything that you have in front of you for a picture, and you see who are my least profitable customers. Like those are the ones that like, if I can only have a hundred in the door, I want those hundred people to be the ones who want to be there, want to be spending. So who am I leaving off this table? And I’m sure they looked and saw Disneyland pass holders spent less in the parks. And it’s no surprise that they do. Disneyland is very differently set up in Disney world Disney world. You can be in this entire bubble. And every restaurant you eat at every snack you eat is going, a dollar is going into Mickey’s pocket at some point, just St. Land’s a little bit different. You can drive in, you can drive away and go to the mall to go eat if you wanted to, you know, so it it’s much different in that you can’t make a closed loop, profit circle, whatever you want to call it.

Yasmine (12:32):
Absolutely. And like Disney land has fewer hotels on property. So it’s actually really common for people to say offsite rather than the three current Disney land hotel. So just, I enjoyed Nicole’s point. There’s just a lot less to do there in a long period of time. And if you have vacation goers going well, they’re planning on staying the whole day. Probably they’re Poplar, hopefully either staying either onsite and one of the hotels or at an off-site hotel planning to go to Disney for the full day. And they’re going to spend more as a result. So with pass holders, as loyal as they are, and as a big part of the Disneyland like ecosystem that they contribute to and everything, it’s just not as profitable. And with the struggles that Disney has been dealing with in the parks division, something had to give, right. And unfortunately it was a passholder program. Now I’m secretly happy that they haven’t like killed the pass holder program at Disney world, because I actually have a past that I haven’t even activated yet. So I’m curious to see what that’s going to look like. When I go in hopefully December for my kiddos birthday, but yeah, we’ll see if Disney changes that as well. Hopefully not though, because with DVC and everything, it gives you more excuses to go

Nicole (13:52):
Well. And so, you know, they have this data, right? And this just comes back to in your business while you’re making decisions, have metrics, have data. And if you need help with that, I will be hosting a challenge in February in my consulting business about helping you do that. So we’ll put that in the show notes for you. But what I really want to stress is that they have this data and that’s how they make these decisions because they can see that an annual pass holder and Disneyland brings in X amount of dollars and an annual pass holder and Disney world brings in Y amount of dollars. And I have no doubt that that number is probably much higher at Walt Disney world because the nature of pass holders there, they have different levels of passholder they up before a passholder, they have the military passholder they have whatever pass holder.

Nicole (14:37):
So you can actually attribute, they might sunset the Florida passholder program because that wouldn’t be profitable, but I’m pretty sure they’d keep the others because those are the people who are flying. There have money for awhile staying on property. So no matter what, like we don’t know what those numbers are for Disney, but we know that we’re there looking at them. So when you’re making decisions on what products to sell on what programs to offer if you are a product based business, what, what actual physical item you want on your shop? You’re going to look at what, which ones are selling, which ones aren’t selling, which ones get the most returns. You know how often you have to like work through customer service issues, how long the onboarding process is. You’ll look at some of that data to decide this program just isn’t worth it anymore.

Nicole (15:26):
Or maybe I need to change how I’m marketing this to bring different types of people. And so looking at the data can really help you make these decisions. So that’s the first lesson from all of this. The second one that we really want to talk to about is when you’re canceling a program or product or a service that you currently offer, how can you do that in a way that doesn’t make your customers angry and upset and not want to buy from you in the future? You’re probably going to lose people that happens, but you want to keep them around, right. They might not be ready for you now, but they could be ready for you to later. And so the biggest things here are customer Ascension model. And we’ve talked about that before. It’s physically just knowing where your customer starts with you and where they end with you.

Nicole (16:15):
So what’s that journey up from just finding out about you, to being a customer, to being a lifelong fan who owns vacation club and annual passes, you know, like where, what does that look like? What does that journey look like for them? And once you know that that can help you figure out which programs or products you need to get rid of from your arsenal, because they don’t fit on that journey. You might have some outliers things that are old things that you launched in the beginning of your business that don’t make sense anymore. And that can really clearly tell you more about that.

Yasmine (16:49):
Yeah. And like for ways to go about it. Well, first of all, when you look at like digital products or even like physical products that you might have in your shop, you might think, well, I have it anyway. So I might as well keep it listed. But what you’re not thinking about is that slide’s having too much choice and too many options is confusing for your buyer and can, you know, make it difficult for them to make a decision and doing everything you can to make it very clear, to give them a path to the product that they’re looking for. And they need currently actually increases your chance of getting that sale. When it comes to courses, this is something that we hear a lot and actually question, we deal with quite a bit from our own clients as well. I have this course I haven’t supported.

Yasmine (17:32):
I’m not really marketing yet. It’s just sort of like lives there. And either I want to change the software that I use hosting the program, or I just really don’t want to have to like manage any more. It’s something I launched early on in my business and I’ve moved on since then, but I offered a lifetime to the content. How do I deal with that? Well, the first thing that you do is be careful in choosing your language. You could offer a lifetime guarantee as long as the program exists. And that sort of alleviates some of the challenges with always making sure that the content is up.

Nicole (18:07):
That’s great for future courses or digital content that you’re creating to put, like you will have access to this program for the lifetime of the program, you know, to put that in your disclaimer and your terms and conditions. That’s a good thing to add, but obviously what do you do if you didn’t put that in five years ago when you actually made those things? That’s a great

Yasmine (18:25):
Question, Nicole. Well, the thing is, is you promise them lifetime access to the contents. You didn’t promise them lifetime access to the course portal. So what we’ve done with our clients and what’s worked really well is we’ve given people a lot of lead time and let them know that as of like this state two or three months in the future, we are shutting down access to this course, if they would like to use the content as they’re, you know, able to, as part of their lifetime guarantee, they have until this date to download it and older files, and you just give them access to where they need to download the content and give them a deadline. It’s really helpful to remind people a couple of times, because people are busy, they forget but give them that timeline, make sure that you stick to it.

Yasmine (19:13):
And after you hit that date, give them a final warning and you take down the content and you don’t have to support it. You’ve still technically fulfilled your end of the offer in the sense that you’ve offered them lifetime access to the content. So you’re letting them download it. But that way you don’t have to host it. And more often than not, people are fine with that. And what you will usually find in our experience is that very few people actually take you up on that lifetime access. If it’s a course that you offered years and years ago, people have probably gone through it. They’ve probably moved past the content. It’s a little bit less relevant to them where they are right now in their business. And it helps you slowly move away from having to host all this old content that you’re no longer supporting marketing to. And that is just taking up space on your website or your course platform.

Nicole (20:05):
Yeah. Communication is the most important thing, communicate to them early and often let them know what exactly is happening. Don’t beat around the Bush. Don’t make it some fancy language. Don’t say like, you know, I had a dream that this was going to be changed and this is my future vision. Like don’t get all up in the weeds and this vision for it. Just tell them straight out what’s happening and offer them an alternative path, give them their next action step. Even though something is ending, don’t make it feel like the end, make sure that they know what the next step is in their journey with you or with the product, whatever it may be. So we’re Yasmin says you have until this day to download everything, to keep it on your own server. And by the way, you know, here’s this other related program that is much more updated and is something I’ve been working on.

Nicole (21:00):
If you’d like to join me for that, I’m offering you a discount code to join it because you were a past customer, you know, and in the case of magical express, Disney is telling us this is ending, but we have a train station coming for you. There’ll be a work around. I don’t know that they’ve communicated anything similar to the Disneyland pass holders. But like I said earlier, they’re probably going to have after, you know, crowds get back to a normal and the balloon ends of travel and they’re probably going to have something like here, there is a California day rate, you know, show a California ID and get a few dollars off like a discount that doesn’t exist for anyone else. And so communicating often early and giving people what the next thing they need to do is so it doesn’t feel like an ending.

Nicole (21:48):
It doesn’t feel like they’ve had something taken away that was extremely important for them is, is a way to do it. And the other thing is, I just want to let you know that it’s okay to say I’m done supporting this product. Even if it’s profitable for you, even if it doesn’t fit with the direction your business is going, and it does not energize you to support it. And you can’t find another contractor to take it over as they can be the front facing piece of that product, then it’s okay to say, you know what, this isn’t working anymore. Maybe you need a longer sunset path for it, but it’s, it’s okay. You don’t have to keep things going that aren’t aligned with your customer’s journey or your energy just because it’s profitable.

Yasmine (22:36):
So we’ve talked about how Disney has handled taking away two very popular product offerings. And we hope you learned how you can take those lessons and apply them in your own business. Now, before we wrap up the episode, I just want to note something that Disney is really good at Nicole. And that is they’re very focused with the projects that they take on and very intentional about the direction that they take in their business. And they really look at the data and no one to start something and when to stop. But that’s a habit that a lot of entrepreneurs need a tiny bit of help with. And you know what, guys, we’re actually offering a workshop. That’s going to help you with that. If you suffer from squirrel syndrome, AKA, you see something new like Tik TOK, which is, I know is a little, it’s been around for awhile, but bear with me.

Yasmine (23:23):
And you’re like, I need to drop everything that I’m doing and get on that. We’re going to help you stop because as an entrepreneur, in order to grow your business successfully and sustainably, you need to focus and you need to know where to focus your energies. So join us in early March. We have all the details down in the description below, and we’re so excited to help you take some, the big corporate lessons and things that we’ve learned in our careers and help you apply them to your business. Thanks again for joining us. If you have any questions, comments about this episode, if you’re bummed about magical express being taken away, tell us we going to hear what you think. We are @pixiedustandprofits on Instagram. And if you haven’t joined our mailing lists where we’re going to send more information about our super fund workshop as well you can sign up at magic.pixiedustandprofits.com. Thanks so much guys. And we’ll see you real soon. Oh,

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