Spirited News, Observations & Thoughts IV

[danlb_2000]

True, but by doing it that way wouldn't it be logical to think that individually it is of very little concern? Instead of just you...don't you become a cross section that can be zeroed in on, but in all probability would not warrant it? I would think it would be of little value when intersperse with all the other "numbers". One couldn't possibly keep track or use individual information to any useful degree. As a cross section of profiles...that I can understand, but it still would take too much time to individually analyze without some red flag focal point. Would there?

Here is a good example of individual level data mining and the potential unwanted consequences of it.... For those who don't want to read the whole article, the article title pretty much tells it all.

http://www.forbes.com/sites/kashmir...teen-girl-was-pregnant-before-her-father-did/

 

[Nemo14]

Here is a good example of individual level data mining and the potential unwanted consequences of it.... For those who don't want to read the whole article, the article title pretty much tells it all.

http://www.forbes.com/sites/kashmir...teen-girl-was-pregnant-before-her-father-did/

The piece that that article links to is even more disturbing:
http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=1&_r=2&hp

 

[GoofGoof]

Here is a good example of individual level data mining and the potential unwanted consequences of it.... For those who don't want to read the whole article, the article title pretty much tells it all.

http://www.forbes.com/sites/kashmir...teen-girl-was-pregnant-before-her-father-did/

Pretty interesting and kinda funny. I think most people are OK with giving up their privacy when they feel they are getting something out of it. Target is a good example. Amazon is probably even better. Amazon gets very high customer review ratings despite tracking everything you do on the site. People don't mind being tracked when they are saving money. The real question is will Disney be able to disguise their spying program in ways to make people feel they are getting some benefit from it. If they do it well like Target or Amazon, the average guest will have no issue with being tracked.

 

[ParentsOf4]

They could also take the approach of a casino reward card program. You can sit down and play blackjack or slots anonymously, but If you opt out of being tracked and don't use the reward card while you gamble you get no offers or incentives at all from the casino. Cash guests who opt out of the band and only use cash could become completely invisible to Disney. Nice from a privacy standpoint, but it could cost you in the end.

What I'm suggesting corporate Disney is trying to do at WDW is the exact opposite of a rewards card. They know that certain types of people are likely to return regardless of price. They also know that certain people are "addicted" to the Mouse. The goal is to collect sufficient behavioral data on an individual basis to allow Disney to identify those individuals and structure prices accordingly.

The goal is not simply to get you to buy more; the goal is to get you to pay more for what you already are buying.

We've all seen the pattern in recent years; Disney cuts quality and raises prices. You end up paying more for less. MyMagic+ takes it to the next level by allowing Disney to create a pricing structure based on individual behavior. What would you, the individual consumer, do if (for example) Disney raised all hotel prices by 10% and then offered "Room Only" discounts to only those who wouldn't come to WDW without a discount?

CEO Bob Iger loves the phrase "pricing leverage"; effectively getting you to pay more for less. Even at the most recent earnings call, Iger spoke of "for the first time we created price differential between the Magic Kingdom and the other parks." What Iger wants to do at WDW is create a "price differential" on an individual consumer basis.

Disney doesn't want to try to increase revenue by building new attractions. That costs them money. Instead, they simply want you to pay more for the same old tired (and often broken) attractions.

 

[SJFPKT]

What I'm suggesting corporate Disney is trying to do at WDW is the exact opposite of a rewards card. They know that certain types of people are likely to return regardless of price. They also know that certain people are "addicted" to the Mouse. The goal is to collect sufficient behavioral data on an individual basis to allow Disney to identify those individuals and structure prices accordingly.

The goal is not simply to get you to buy more; the goal is to get you to pay more for what you already are buying.

We've all seen the pattern in recent years; Disney cuts quality and raises prices. You end up paying more for less. MyMagic+ takes it to the next level by allowing Disney to create a pricing structure based on individual behavior. What would you, the individual consumer, do if (for example) Disney raised all hotel prices by 10% and then offered "Room Only" discounts to only those who wouldn't come to WDW without a discount?

CEO Bob Iger loves the phrase "pricing leverage"; effectively getting you to pay more for less. Even at the most recent earnings call, Iger spoke of "for the first time we created price differential between the Magic Kingdom and the other parks." What Iger wants to do at WDW is create a "price differential" on an individual consumer basis.

Disney doesn't want to try to increase revenue by building new attractions. That costs them money. Instead, they simply want you to pay more for the same old tired (and often broken) attractions.

I don't know about this one. I could see this going the other way too. Let's say we know @ParentsOf4 never buys a mickey plush even though our data has shown their magic card in the area of them 7 times in the past two days. Lets throw them a 20% off coupon and see if they bite. They didn't, lets try 25% off. You bite. Now they know at what price you are willing to pay for the cruddy products and what they can sell you while still turning a profit.

 

[GoofGoof]

What I'm suggesting corporate Disney is trying to do at WDW is the exact opposite of a rewards card. They know that certain types of people are likely to return regardless of price. They also know that certain people are "addicted" to the Mouse. The goal is to collect sufficient behavioral data on an individual basis to allow Disney to identify those individuals and structure prices accordingly.

The goal is not simply to get you to buy more; the goal is to get you to pay more for what you already are buying.

We've all seen the pattern in recent years; Disney cuts quality and raises prices. You end up paying more for less. MyMagic+ takes it to the next level by allowing Disney to create a pricing structure based on individual behavior. What would you, the individual consumer, do if (for example) Disney raised all hotel prices by 10% and then offered "Room Only" discounts to only those who wouldn't come to WDW without a discount?

CEO Bob Iger loves the phrase "pricing leverage"; effectively getting you to pay more for less. Even at the most recent earnings call, Iger spoke of "for the first time we created price differential between the Magic Kingdom and the other parks." What Iger wants to do at WDW is create a "price differential" on an individual consumer basis.

Disney doesn't want to try to increase revenue by building new attractions. That costs them money. Instead, they simply want you to pay more for the same old tired (and often broken) attractions.

I agree with all of this, but if you simply "take your ball and go home" and refuse to wear the band they won't have any info on you. While the data collected may tell Disney I'll pay top price for the trip no matter what, it could also tell them they need to send me a room offer or free dining to get me to come back. My only point is they could take the approach of offering you incentives to use the band and participate or they could simply cut you loose and stop offering you anything at all.

 

[GoofGoof]

I don't know about this one. I could see this going the other way too. Let's say we know @ParentsOf4 never buys a mickey plush even though our data has shown their magic card in the area of them 7 times in the past two days. Lets throw them a 20% off coupon and see if they bite. They didn't, lets try 25% off. You bite. Now they know at what price you are willing to pay for the cruddy products and what they can sell you while still turning a profit.

And if they know that you bought a full price plush every time you passed one they won't offer you any discount at all. Maybe in the past they would have sent you a 20% off coupon since you were a frequent buyer. I think that's the point. Only offer a discount if absolutely necessary.

 

[ParentsOf4]

I don't know about this one. I could see this going the other way too. Let's say we know @ParentsOf4 never buys a mickey plush even though our data has shown their magic card in the area of them 7 times in the past two days. Lets throw them a 20% off coupon and see if they bite. They didn't, lets try 25% off. You bite. Now they know at what price you are willing to pay for the cruddy products and what they can sell you while still turning a profit.

It could be this as well but just keep one very important point in mind: Igers hates discounts. To Iger, a discount represents Disney giving away money. You need to view MyMagic+ through Iger's eyes. Specifically, what would have been presented to Iger to get him to approve it? You have to get into Iger's head.

Offering more discounts is like telling Iger that Disney intends to give away even more money. I'm not saying what you suggest won't happen; I'm suggesting it would not have helped the Program Management team sell NextGen to Iger.

 

[SJFPKT]

And if they know that you bought a full price plush every time you passed one they won't offer you any discount at all. Maybe in the past they would have sent you a 20% off coupon since you were a frequent buyer. I think that's the point. Only offer a discount if absolutely necessary.

Well you have to think, they sell all of that crud online at 60% off. Then if you are using a Disney Visa you get another 10% off. So they can afford to throw you 10%-30% off in the park while you have that "Magical" feeling and most will bite. Those that don't know about the sales at the Disney Store online would snatch that deal up in a heart beat, all while TWDC is still making a 300% profit on whatever they pay people in China to bang out Mickey dolls.

 

[SJFPKT]

It could be this as well but just keep one very important point in mind: Igers hates discounts. To Iger, a discount represents Disney giving away money. You need to view MyMagic+ through Iger's eyes. Specifically, what would have been presented to Iger to get him to approve it? You have to get into Iger's head.

Offering more discounts is like telling Iger that Disney intends to give away even more money. I'm not saying what you suggest won't happen; I'm suggesting it would not have helped the Program Management team sell NextGen to Iger.

I don't doubt that, but like I said in my above post you can get the stuff online at up to 70% off. I am sure even at 70% off they are making a decent profit. They probably pay 2-3 dollars a piece for each plush out of China. Now where I really see this coming in to play and being a significant savings to offer the coupon is with seasonal items, like Christmas Mickey. It saves them having to package all of it up and send it to the warehouse for distribution to Disney Stores and Online. It is things like this where I would imagine the discount would come in handy to Disney.

 

[ParentsOf4]

Well you have to think, they sell all of that crud online at 60% off. Then if you are using a Disney Visa you get another 10% off. So they can afford to throw you 10%-30% off in the park while you have that "Magical" feeling and most will bite. Those that don't know about the sales at the Disney Store online would snatch that deal up in a heart beat, all while TWDC is still making a 300% profit on whatever they pay people in China to bang out Mickey dolls.

Right but the pricing strategy is to first raise prices 30% and then offer 30% "discounts" to only those who wouldn't buy the product without the "discount". Even better, data collected through MyMagic+ will allow Disney to target which individuals need the 10% "discount", the 20% "discount", etc. to make the purchase.

Disney already does this with "Free Dining" and "Room Only" discounts but it's very inexact. Additional data allows Disney to refine this.

The goal is to correlate park touring habits with spending patterns, not just at POS locations such as gift shops but for entire WDW vacation packages. Ideally, Disney wants to figure out your threshold of pain and make sure you are charged exactly that.

 

[flynnibus]

Looking at this simplistically, Disney is not going to offer you (for example) “Free Dining” if you are willing to book your vacation without it, even if every other person in the park is receiving “Free Dining”. We already see this principle at work, with many receiving "Free Dining" PINs for times that are not available to the general public. As Disney collects more data through MyMagic+, they will be able to target this sort of incentive more effectively, making sure the only "guests" who receive these discounts are those who would not visit WDW without them.

If the current trend continues, it seems likely that Disney intends to use the data it collects through MyMagic+ to effectively "punish" its most loyal customers.

I don't think so - what we see here is simply Disney being willing to raise prices where it knows people will keep paying them. The idea a fringe customer gets a greater discount than the 'normal' customer is not punishing the normal customer.. it's a discount to try to ATTRACT the fringe/lost customer back into the fold where they will pay the regular price in the future.

What is more unique about disney... is how little they have to do to keep customer loyality. The link is so emotional.

 

[SJFPKT]

Right but the pricing strategy is to first raise prices 30% and then offer 30% "discounts" to only those who wouldn't buy the product without the "discount". Even better, data collected through MyMagic+ will allow Disney to target which individuals need the 10% "discount", the 20% "discount", etc. to make the purchase.

Disney already does this with "Free Dining" and "Room Only" discounts but it's very inexact. Additional data allows Disney to refine this.

The goal is to correlate park touring habits with spending patterns, not just at POS locations such as gift shops but for entire WDW vacation packages. Ideally, Disney wants to figure out your threshold of pain and make sure you are charged exactly that.

I agree. That is why I stay off property if I don't have a discount. I can't justify, in my mind no matter how "magical" it is, paying a $120.00 a night for the same room on property that I can use my government discount right across Vineland Road for 1/3 of that or Downtown Disney for half of that. We just aren't in the room enough. My goal with Disney, Orlando, or wherever is to make Memories with my son. Stuff that he will remember for the rest of his life. Sometimes you have to weigh quality with quantity, but at 5 years old he doesn't give a rats tail what hotel we are in just that we are at Disney or Universal.

 

[flynnibus]

And if they know that you bought a full price plush every time you passed one they won't offer you any discount at all. Maybe in the past they would have sent you a 20% off coupon since you were a frequent buyer. I think that's the point. Only offer a discount if absolutely necessary.

That's pretty much how all business works.

Even loyalty rewards discounts are not because 'we really like you as a customer...' - their purpose is to increase revenue. To get you to spend even more.. even if at a slightly lower margin.

 

[ParentsOf4]

I don't think so - what we see here is simply Disney being willing to raise prices where it knows people will keep paying them. The idea a fringe customer gets a greater discount than the 'normal' customer is not punishing the normal customer.. it's a discount to try to ATTRACT the fringe/lost customer back into the fold where they will pay the regular price in the future.

What is more unique about disney... is how little they have to do to keep customer loyality. The link is so emotional.

I think we are saying something similar, just viewing it differently.

Simplistically, what I'm saying Disney's possible strategy is: "raise all prices 30% and then offer 'discounts' only to those unwilling to pay those much higher prices."

I view this as punishing WDW's most loyal customers.

 

[Bolna]

Right but the pricing strategy is to first raise prices 30% and then offer 30% "discounts" to only those who wouldn't buy the product without the "discount". Even better, data collected through MyMagic+ will allow Disney to target which individuals need the 10% "discount", the 20% "discount", etc. to make the purchase.

Disney already does this with "Free Dining" and "Room Only" discounts but it's very inexact. Additional data allows Disney to refine this.

The goal is to correlate park touring habits with spending patterns, not just at POS locations such as gift shops but for entire WDW vacation packages. Ideally, Disney wants to figure out your threshold of pain and make sure you are charged exactly that.

The same could also apply to the length of lines. If you track people you see who and how many people will go away if they see a wait posted of a certain amount of time. If they see that for some attractions enough people still enter the line at let's say a 30 minutes way, they could reduce capacity more precisely according to attendance (for example by having less vehicles running) and safe on salaries. Same goes for shops. How long will a Magic Band wait in front of a register until it walks away without making a purchase.

I guess that's the thing about Magic Bands: They allow Disney to watch closely the behaviour of a large number of people with regard to all their activities on property. A shop loyalty card only tells the shop what I buy there. Disney will know what I eat, when I eat it, how long I am willing to wait for it, when I enter and leave my hotel room, when I enter and leave a theme park. What I buy - maybe even what I look at and then don't buy. What kind of entertainment I like. Etc.

Regardless whether one thinks that is bad or does not matter, it gives Disney a huge advantage over other similar types of programs to really figure out individual profiles and do behaviour research.

 

[GoofGoof]

That's pretty much how all business works.

Even loyalty rewards discounts are not because 'we really like you as a customer...' - their purpose is to increase revenue. To get you to spend even more.. even if at a slightly lower margin.

Yep. And that is how someone sold the BOD on spending a billion dollars on this project. Get the guests to spend more. That's the name of the game.

 

[lebeau]

BTW, @lebeau Luke did not finish his training in ESB. He left after he had a vision of his friends in pain. Yoda begged him not to go. You should know this, man!

Congrats on slogging through all that. I skimmed a lot.

I knew someone would point out Luke didn't complete his training. But he went from neophyte to lifting darn near done. To the point where he could feasibly face Vader. And then her returns a short while later and Yoda tells him, nope you're a done. A Jedi you are. So for all intents and purposes, I'd say he completed the training. Yoda and Ben just liked to mess with him.

 

[flynnibus]

I think we are saying something similar, just viewing it differently.

Simplistically, what I'm saying is "raise all prices 30% and then offer 'discounts' only to those unwilling to pay those much higher prices."

I view this as punishing WDW's most loyal customers.

Perception is everything when it comes to this... because your conclusion frames their motivation. To punish would infer malice or intent to take-away/reduce. They aren't aiming to take away from the regulars - it's a side-effect.

When a business sets out to save a customer, through guest recovery, discounts, etc.. they aren't trying to punish the regular customers... even tho the regular customer isn't getting the same thing the fringe customer is.

If you go the extra mile for your wife... you aren't punishing your friend for not doing the same thing.

 

[GoofGoof]

The same could also apply to the length of lines. If you track people you see who and how many people will go away if they see a wait posted of a certain amount of time. If they see that for some attractions enough people still enter the line at let's say a 30 minutes way, they could reduce capacity more precisely according to attendance (for example by having less vehicles running) and safe on salaries. Same goes for shops. How long will a Magic Band wait in front of a register until it walks away without making a purchase.

I guess that's the thing about Magic Bands: They allow Disney to watch closely the behaviour of a large number of people with regard to all their activities on property. A shop loyalty card only tells the shop what I buy there. Disney will know what I eat, when I eat it, how long I am willing to wait for it, when I enter and leave my hotel room, when I enter and leave a theme park. What I buy - maybe even what I look at and then don't buy. What kind of entertainment I like. Etc.

Regardless whether one thinks that is bad or does not matter, it gives Disney a huge advantage over other similar types of programs to really figure out individual profiles and do behaviour research.

We have been focusing on the merchandise and discounting implications of the magic bands but the line ride aspect is pretty interesting too. The theory is Disney will use FP+ and the tracking bands to manipulate guests and spread crowds between parks and within sections of a given park. This is another way the project helps to cut costs for the mouse, but I actually think if executed properly this could have some benefits to the average guest as well. If FP+ reservations tell them AK is going to be extra busy today they can add additional cast members, open additional food stands and even add additional ride vehicles to popular rides. If people start bunching up in a part of the park they can offer incentives like an additional fast pass, merchandise coupon or meet and greet in the less crowded areas. I know some people object to Disney trying to control their behavior on vacation, but aren't they doing that already with fast pass?