Episode 34: Disney & Coronavirus… Take 3? (Transcript) - pixiedustandprofits.com
episode 34 coronavirus in disney...take 3

Episode 34: Disney & Coronavirus… Take 3? (Transcript)

Dec 8, 2020

The

podcast

Intro (00:01):
Pixie Dust & 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 (00:26):
Hey, everyone, welcome to this week’s episode of Pixie Dust & Profits, and we’re here with another update on COVID-19 coronavirus and how Disney is doing. So we’re going to talk a little bit about the numbers that they’ve earned, lost everything that they’re trying to do to recover all of the money that they’ve lost in the last 10 months, and all the things that they’re doing to still deliver on their magical customer experience. And some of the things that they’re doing, that’s allowing them to reopen and recover that lost money. So without further ado, I’m going to hand it over to Yasmine. Who’s going to talk a little bit more about all of this.

Yasmine (01:04):
Hey everyone. So Disney had a rough quarter with Disneyland being closed. A couple of their parks oversees being closed and Disney world’s only operating at about 30% capacity. It’s, it’s been a struggle with everything that Disney has been trying to do. There were still down billions of dollars this past quarter with the estimate that coronavirus has actually cost them about seven or $6.9 billion in lost revenue, just in 2020 so far, that that’s a big number. Obviously, we’ve talked about like what Disney has done to deal with the loss of revenue. They let go more than 28,000 cast members. We talked about that in a previous episode, they’ve gotten as part of that written have a lot of entertainment, some like long serving contractors, like the band that plays at the Grand Floridian were let go. Some of the shows that like, you know, we all know and love have like ceased to continue. And most of all, they’ve gotten rid of the fireworks which is like, which makes me wonder, like, how has the firework industry doing, because Disney is one of the largest purchasers of fireworks, like in the world. So they’re probably feeling it now that their biggest customer is not doing their nightly fireworks anymore.

Nicole (02:27):
Yeah. And I mean, there’s just things like the Lion King show at Animal Kingdom. It’s just a queue for flights of passage right now. People just line up six feet apart going that far back into the park because they’re not showing shows. So they may as well use that building. Another way. What’s really interesting about all of this though, is that Disney was at a very high stock price before coronavirus hit. They had just come out of frozen to the Mandalorian, all sorts of things that were like bringing their stock value high. And so just before all of this hit, they were at like 140 to $145 a share. And that’s one of the highest it’s been in a very long time. And so it dipped down to, I think, 90, $95. I remember looking at it back in March when they first closed the parks, no one knew what was coming.

Nicole (03:18):
It’s been steadily climbing up, which means that people are still feeling secure about Disney as a company, despite all of their losses this year. But what’s really interesting is that right now we’re filming just before Thanksgiving and their stock price is at $146. So that’s what it was at in January. So their stock is actually pretty similar to where it was at the beginning of the year, which shows confidence in them as a business confidence in where things are going. And, you know, I think we can really attribute this to some of the things that they’ve been doing in the parks to keep it safe and still operate as much as they can.

Yasmine (03:52):
And just to add to that Disney actually issued a notice a next quarter, they’re going to be withholding their shareholder dividends. So if any of you invest typically when a company has like profits, they split some of those profits with their shareholders. That’s the dividend that you get paid out quarterly. And the fact that they are withholding their dividend and their stock price is actually comparable to where it was in January actually shows significant investor confidence that does this going to work their way out of this. They are increasing their park capacity. They’re saying it’s going to go up to like 35, I think maybe 40% if I recall correctly. And they’re also instituting park hopping once more. Now it’s not park hopping as we know it, where you can try to do that whole four parks in a day and just go to whichever park you want. No, you still have to follow the system where you make your park reservation and you have to start there, but you can go to one more park during the day. So, you know, if you’re at Epcot and you’re getting a little tired after walking around the world and you all a little bit of a thrill, maybe you can head on over to Hollywood studios and go on my favorite ride Rock and Rollercoaster. I like the loop de loops.

Nicole (05:04):
Yeah. And I’m really curious about how they’re going to handle part copying. It just seems like it’s still too soon for some of these things. My husband and I are contemplating going during the art festival together and we want to rent a car. So we don’t have to take the Disney transport around anywhere. So I’m really curious how park hopping will play out. But the reason why all of this is so important is because Disney is reopening a little bit more, adding more people to parks, allowing more transmission of people. If you think about someone who is in Magic Kingdom and takes the monorail over to Epcot, and those are some really big steps, especially when the virus is actually more prevalent than it was back in March. And now obviously we have testing, we know more about everything, so there are reasons for why it would, you know, more prevalent, but we still have things that are allowed to happen, but it just shows the confidence that they have in everything that they have put together to keep people safe, to keep their cast members safe, to make sure that nobody gets sick in their parks.

Nicole (06:13):
Because I mean, what happens if someone did, or a family did Disney is a pretty large name, just their name alone could cause lawsuits or bad press, one bad PR release about coronavirus all over Disney Worlds could really, really destroy their revenues even more so they’ve definitely taken every precaution that they could. And so that’s really what we want to stress here from the business lesson, that if you look at your operations and your systems and your compliance things, to spend time on those, to build those boundaries up, to make sure that you have airtight processes. And when you do find gaps and holes and scapegoats and things that people are trying to do to avoid the system that you close those gaps. And so Disney, a good example of this is early on. People were, they’re supposed to wear masks the entire time they’re in the park.

Nicole (07:06):
And people were getting around that by walking around with a drink in their hand and a principal in their other hand and walking and eating and Disney said, Nope, not having it. You can only eat in designated areas. You have to give your mask on and other parts of the park. There was also some cases where there was a gentleman who was alive, streaming his confrontation with some cast members over not wearing a mask. And it, it was extreme for more than half an hour. It went to the point of them serving him the yellow paperwork that says you are no longer welcome at any Disney property. And I don’t think that’s a piece of paper that any of us want to receive from Disney. And so not only did they put these precautions in place, they empowered their cast members. They did everything they could to protect guests, to protect their integrity, to protect employees.

Nicole (07:57):
And they enforced it. It’s not enough to just say we were going to do this, but we won’t enforce it. They enforce it. And by putting all of that in place, by relying on strong systems, strong compliance, they’re now able to do things like expand capacity, have park hopping available. They’re probably going to be opening extra resorts up right now. They have only a few key select resorts and vacation club resorts open. And the vacation club stuff is probably because of the contract agreements with the people who own vacation clubs that they have to be open and couldn’t be closed by Disney, but right now that’s what they have open. And they’re probably able to open more. I’m not sure if pools will be open anytime soon, but things like that they can do because they’ve relied on such strong systems and they put things in place.

Yasmine (08:46):
Yeah. And if you’re like thinking of, well, like what scenarios could this apply to me? Well, I’ll pull an example from another small business that I actually write online, I think a year or two ago the company is called California baby. And they sell baby like sunscreen from them. Yeah. I buy sunscreen from them, like from the States, I have it shipped to Canada because it’s so good. I think a year and a half ago, they had this issue where a code that was meant for one of their influencers or like affiliate partners or something of that nature got out. And it basically gave you like 90% off your order. So obviously it’s spread like wildfire and mommy groups, hundreds of people were putting in like massive orders for product and paying like peanuts for it. And of course the company was like, Oh no, this is an error like this wasn’t supposed to happen.

Yasmine (09:39):
So they canceled those orders and it caused a huge backlash from people being like really disappointed that they didn’t get their orders honored that you know, they didn’t get their like really discounted products. That’s actually how I brand. And I ended up after reading about them buying a bunch of their products to try out for my daughter. So I guess not all PR is bad PR it, but it was a nightmare for them to deal with. And, you know, maybe in their backend, if they had taken the extra steps to streamline their systems, make sure that they’re including the appropriate exclusion. So only the person with this email address who’s eligible to use the code could checkout with it. They wouldn’t have like a nightmare like this on their hands. And I’m sure after going through something like that, they’ve definitely put those measures and checks in place. So having airtight processes can protect you as a company and help, you know, also like give you, give your customers a great experience. Because you know, someone tried that it didn’t work well. It’s like up, it’s a code that you found off of retail, me not.com that didn’t work out for you and you move on. But because they got excited and they had that deal taken away from them, I’m sure that they got some, you know, they lost some customers out of that experience.

Nicole (10:52):
Yeah. And some of the things that I think Disney is doing is they’re trying to make sure that there is no way someone could deny, but they knew Disney’s rules. They have instituted and every piece of marketing that you could come across right now. So if you see any ads for Disney right now, someone is wearing a mask in those photos, showing them around the park, wearing a mask. It also emails you immediately, all of the things that you have to think about when you’re traveling. So we booked a trip, like I said, I don’t know if we’ll be able to go. They have a generous cancellation policy, so we’ll be able to cancel if we need to, but they also make sure that we’re well aware that they expect us to comply with their rules. And so when you have a program or a product or anything that you’re servicing for your customers, making sure they know the boundaries.

Nicole (11:45):
I see this a lot where people offer support in coaching programs and, you know, they don’t clearly show like we will be attending to questions once a week, twice a week during open office hours, they just leave her really open-ended. And that just leaves space for people to be upset that they’re not heard or responded to as quickly as they expected because no expectations were set. So if you go and look in Facebook ads library, you can see what pages have for ads running. And you can see that Disney actually has ads running. I’ve seen them myself because I booked a trip. But if you buy a trip, they retarget you with ads telling you here’s some concerns you need to know here’s our COVID guidelines. So they were actually spending more money for someone who’s already booked a trip to tell me, I need to wear a mask. When I, when I go there, that’s some things will be closed that the experience will be different. That there’s no fireworks at the shows are different. They’re spending money to tell me that after I book a trip and that’s not something they have to do, but they know that the better the customer experience and the end of the easier it’s going to be in to enforce and have those boundaries in place. So don’t think that if you say at once, it’s going to get through, put it in all of your messaging.

Yasmine (13:00):
Like people are distracted more than ever. Our attention is split between multiple different mediums. Sometimes you really have to hammer in a message a couple of times before it sinks through. I mean, I kind of want to liken it a little bit to Black Friday where there’s like so much noise going on. So you might want to like up the number of emails you’re sending out because you know, out of maybe the 10 that you have planned to might get noticed in the volume of emails that everyone is getting. So make sure that you are messaging repeatedly when it comes to anything that ensures like a good, solid customer experience and anything that requires people to have their expectations managed. Because the last thing you also want to do is just deal with the customer service work of reinforcing something that you said, like on the sales page or in an email, put it everywhere and save yourself the time and effort.

Nicole (13:55):
Yeah. And you don’t really want to have your frontline associates handling all of those confrontations. It’s not like their pay grade. It’s not what they want to be doing. It’s harder for them to deliver a magical experience if they’re frustrated about something else happening. And it’s also something that probably gets escalated to managers more. So the more you can do upfront, the less you should have to do on the other side of things, or the easier it is to say, look, there was a sign at the door, there was this here, and you walked by that or were there. And you also got an ad in four emails and it just makes it so much easier to reinforce that this is what the expectation is. And you can over-deliver, you know, so under promise over deliver. You’ve probably heard that before. So when you’re making your FAQ documents for your products, for your services, you can under promise. You can say, I’m only going to check in weekly and we’ll have this type of call, but that doesn’t mean you can’t say on a Monday morning, how are things going this week, your intention this week, let’s work together on that. Even if you’re regularly scheduled meetings on Fridays. So there’s no reason why you can’t go above and beyond, but you don’t want to set the expectation of that if you can’t fulfill it.

Yasmine (15:04):
So thanks for joining us again for another episode on COVID at Disney, you know, when Nicole and I talked about the first time back in March, we’re like, we’ll do one episode on it and that’s it. And I think we’ve done like four or five, but Hey, it’s, it’s been relevant. I think it’s important to see what a big company like Disney is doing to respond to the pandemic. There’s definitely lessons. We, as small businesses can learn and implement.

Nicole (15:28):
So thanks for joining us this week. And if you have questions that you’d love, answered, or boundaries that you need to put in place or processes that need to be behind us, join us in the Profitable & Productive Party. You can find us at pixiedustandprofits.com/party. We would love to coach you now and into 2021. So you can make sure that your systems are in shape and ready to grow.

Yasmine (15:52):
Thanks so much. We’ll see you guys real soon.

Speaker 4 (15:58):
[Inaudible].

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