The REAL Magic Behind MagicBands (and How It Can Help Your Business) - pixiedustandprofits.com

The REAL Magic Behind MagicBands (and How It Can Help Your Business)

Apr 8, 2021

The

podcast

Now, if you don’t know what a MagicBand is, it’s a wristband that you wear at Walt Disney World. It is literally the key 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 MagicBands 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. 

We want you to picture this scenario. You have spent thousands of dollars to go to Disney World. You have heard that it is a once-in-a-lifetime opportunity that everyone should have. 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 realized they had a not-so-magical problem

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. And they’re not going to do that if they have people waiting in line as soon as they arrive. 

So Disney started envisioning ways to reinvent this process; from how a guest goes from sitting in their home, booking their vacation, to arriving on the 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. 

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 MagicBand. Now, we 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.

Rethinking the experience

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, when 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.

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 you check out that Mickey Bar that you’re walking past — no need to carry your wallet with you. You can actually get it with your MagicBand. 

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 MagicBand itself, the physical product spent six months doing it. And that’s because Disney is smart.

Designing the new process

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 MagicBands and they have your names on them. 

It’s super special. It’s all Disney-fied. It’s the most magical sight for a young child, who’s opening up this box to understand that 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 so that way it can fit a small child’s wrist. 

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 on putting the MagicBand system in place, was $1 billion (with a B). 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. 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.

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 anymore! 

From there, it was walking them through the entire process that you had experienced if you went to Disney World today. So the Board of Directors, which was filled with people like Steve Jobs and Sheryl Sandberg, 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.

Experiencing the new MagicBand process

And Nicole was actually at Disney World when they did this test. She wasn’t at the resort where they were testing. She was at the sister resort to it. So she remembers getting on the buses and hearing people complaining about these MagicBands 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. 

Nicole says she just remembers sitting there, feeling so left out because she didn’t have this really cool Mickey band on her wrist. And it’s fascinating to remember. This has all come from an idea on the floor to a $1 billion investment that has definitely paid off for Disney. Now, though, Yasmine’s going to talk a little bit more about the return on investment on this $1 billion product.

Return on an investment of this scale

The first thing to talk about is something that you probably experience when you’re in the parks with your MagicBand. It’s a cashless system that they’ve essentially created for all the park visitors. We don’t know about you, but when we’re walking in Animal Kingdom and we see a really cute pair of ears, it’s just so easy to pick them up, scan our MagicBand on our wrists and not have to pull out a credit card or wallet, worry about cash, worry about fumbling with coins — and just make that purchase. Anyone can enter their 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. It makes it really easy to purchase. 

Quick ROI

It’s pretty easy to imagine that Disney experienced instant ROI just from that capability alone, but let’s dive into the business intelligence element of MagicBands. 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 takes you to make a purchase. And then once you’re in the parks, they can actually track what you’re doing.

Their ability to track where you’re coming from comes in handy, because 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 Magic Kingdom After Hours, those are events that you have to buy an additional ticket to, that’s not included in your day pass in order to attend. But if you have a MagicBand, your extra ticket is on your MagicBand 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.

Path to purchase

Going back to the business intelligence piece, being able to understand quite literally what that path to purchase is for their customers is such a powerful tool for Disney. They can evaluate endless data and 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, and how much revenue that they can make from an individual guest. And from there be able to make other projections for future planning purposes.

They are tracking so much data. What time did they scan into their hotel room? And what time did they scan into the park? Which section of the park did they go to? When did they leave and what time did they have a lunch? 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, they know when to expect more guests. 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.

Decreased staff (without sacrificing customer service)

One other way that Disney probably makes money for the MagicBand system is that 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 MagicBands take care of that for you. 

When it comes to being able to pick your FastPasses and do it on your phone, that minimizes the number of machines Disney actually needs to have at the parks to spit out fast passes. 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.

We’ve talked a lot about the business benefits to Disney on this, but we also want to stress that like they do all this with a customer focus, and it really stems from having a better experience for those customers. 

So… what can YOU learn from MagicBands?

Now let’s flip the script and talk about you and what you can learn from how Disney leveraged MagicBands to make a better guest experience, but also to make them more profitable. We think the lesson here is: measure, measure, measure. What MagicBands give Disney is a goldmine of data. And you can have that in your business, too, 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, first of all, to look at your website.

Check your metrics

For example, if you install Google Analytics, it tells you how people navigate through your website. (If you’re thinking that sounds complicated, don’t worry. Google has an awesome free Google Analytics setup tutorial here.) 

With Google Analytics, 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.

If you’re just looking to start to gather metrics, we would encourage you to stop and think about what things would be important for you to know about your customer. That could be something like, “I want to know how long it takes someone to purchase from me. 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.

Ask your audience or customers

You can also use the contact form on your website as a source of data. 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, ask a question (just one — don’t overwhelm anyone!). 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.

If you have a higher ticket offering and you’re wondering how people are buying that or where they came from before, 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.

Mine for data elsewhere

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 they joined your list from. That can give you a lot of data about how long it takes for someone to become a customer from being completely cold.

Track everything

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.

Think about what’s important in your business and what you want to track — and just start tracking it.

Embrace the magic in your own business

Our biggest question for you is: How can you bring the spirit of these MagicBands into your business? How can you streamline the process for your customers or clients? And how can you track important data to help you serve them even better in the future? 

This is just the tip of the iceberg when it comes to small business lessons we can all learn from Disney. If you want to hear three other magical lessons we’ve learned from them, check out this FREE resource:

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