Earning My Mouse Ears, Part III: The Disney Approach to Customer Loyalty

Blog

May 28

Soon after the completion of Walt Disney World someone said, "Isn't it too bad Walt Disney didn't live to see this?" I replied, "He did see it—that's why it's here."—Mike Vance, former Dean of Disney University

Note: We left off in Part II at the end of day one of The Disney Approach to Customer Loyalty: Creating Service That Keeps Your Customers Coming Back, a professional development program offered at the Disney Institute. This month I'll conclude with some of the more important lessons I learned.

FROM ZERO DEFECTS TO ZERO DEFECTIONS

To err is human, and Disney is no exception. Anytime you have 86,000 Guests wandering around 30,000+ acres—an area twice the size of Manhattan—you are sure to encounter service problems. How you handle those problems when they arise has a dramatic influence on whether or not a Guest will return. Disney has given its front-line Cast Members the ownership they need to rectify any Guest's particular problem, since the front line is usually the one closest to the Guest and best equipped to deal with them.

It's well known that customers' intent to return will increase dramatically if they encounter a problem, and the problem is resolved immediately to their satisfaction. Marriott has discovered the following regarding a customer's likelihood to return in each scenario:

No problems encountered during stay—89%
Had a problem during stay, and it was not corrected to customer's satisfaction—9%
Had a problem during stay, and it was corrected to customer's satisfaction—94%

This is precisely why customer complaints are such valuable kernels of information and wonderful opportunities to increase customer loyalty and goodwill.

During the Customer Loyalty course, an amusing incident occurred to one of the participants. On a break, he sat down on a bench outside of the classroom. When he got up, he noticed his pants were soaked—apparently, the victim of a nearby sprinkler.

Just as he was wondering what to do, a Disney Cast Member passed by and asked him how it was going. He said fine, "but don't sit on that bench." When the Cast Member asked why not, he showed him his soaking-wet pants. Instantly, the Cast Member made a call from his cell phone and a hair dryer was delivered. The Cast Member then proceeded to take the participant into the bathroom and blow-dry his pants. This story became somewhat of a legend in the class, but it is typical of Disney's approach to Guests' problems. They spend an enormous amount of time on training the front line to take ownership of the Guest's problem and correct it immediately. The payoff is enormous.

In any service business, you will encounter problems in dealing with people—zero defects is not an attainable goal. If you go the extra mile in correcting these problems, you will earn increased loyalty and goodwill among your customers. They will remember the satisfying outcome long after the original error has been forgotten. In fact, most extraordinary service experiences you hear about deal with a service recovery issue and not about a company "getting it right the first time." I'm not advocating that you deliberately make mistakes, only that you give your associates complete ownership of customer problems and the authority to correct them.

WINNING THE HEARTS OF EMPLOYEES

During day two of the course, we all traveled to the Yacht and Beach Club Resorts and got a chance to go behind the scenes with a designated guide. My group went with Steve, the Greeter at the Yacht Club. He's responsible for greeting people as they walk in, helping Guests with directions, making suggestions, and any other task he's called to do in order to make the Guests' stays memorable.

He gave us a tour of both resorts as if he owned them. He pointed out details that I'm sure the average guest would never notice—I certainly wouldn't. Features like alabaster lighting, marble stone from the sea that houses the world globe as you enter the lobby, an antique boat docked by the lake, etc.

If you've ever been to Disneyland or Walt Disney World, I'm sure you've noticed the fanatical attention to detail. Visit 100 times and you will notice something different each time, even if you visit the same places. I began wondering about why they do this, especially if the average Guest never notices or appreciates it. For instance, in the Hall of Presidents, where they have Audio-Animatronic figures of all 42 president of the United States, the Seal of the United States is in the lobby. There are only three Seals on display in public in the country—it took an Act of Congress to authorize Disney to display it. In the show, FDR is wearing leg braces, and Clinton has on an Ironman Timex watch.

It occurred to me after meeting Steve: Disney does it not so much for the Guests, but for the Cast Members. Steve said at the end of his tour: "I care about this place because they do" (meaning the company). How many associates in businesses around the country take that type of pride in their workplace and work?

On the last day of the course, our field experience was a trip to the Magic Kingdom to see the Legend of the Lion King puppet show. The puppets in this show are specially made and cost between $23,000 and $79,000 each. They have been modified many times, as Disney discovered that the audience will react with more emotion if the puppet can roll its head and blink its eyes. The Cast Member who gave us the tour again displayed the same pride in ownership of the entire show that Steve had displayed at the resort.

After the show, which is excellent and left most of the audience in tears, our group was discussing the emotional impact of the show—the music, the reactions of children in the audience, etc. Karen, one of our facilitators, made perhaps the most poignant point. As she was watching the show, she thought: "That's my company that did that!" Cast Members all understand how their work—no matter how menial it may seem—contributes to the overall happiness of the Guest experience.

WHAT'S THE DISNEY DIFFERENCE?

I challenge you to walk around your firm and ask your associates why they work there? Do they all have a single-minded dedication to a shared purpose? Do they understand how their jobs contribute to the success of your customers? Or do you get uninspiring answers like, "putting in my two years" or "I do auditing and tax returns"? If more firms had associates who were totally dedicated to their customers, morale would be higher, firm profits would be higher, and jobs more secure.

Next, visit the Disney store, and ask the Cast Members the same question. What's the difference? The difference is culture, which is handed down through education. I mentioned that all Disney Cast Members attend the one-and-a-half day Traditions course, in which they learn the company's history, about Walt, and why their jobs are important.

Most CPA firms invest in education, but it tends to focus on the technical aspects of the job, not the human elements of taking care of the customer. Then we wonder why staff morale is so low and turnover so high. As a profession, we have not invested enough in our people. I've even heard CPAs say that they don't want to invest in educating their associates, who will then become more skilled and eventually leave and become a competitor. I ask: But what if you don't train them and they stay?

Before we can win the hearts and minds of our customers, we first must win the hearts and minds of our associates. The way we treat them is the way they will treat our customers.

WHAT MAKES A CULTURE?

According to Mike Vance (former Dean of Disney University) and Diane Deacon, in their book, Break out of the Box, "cultures that engage in the most original thinking leave behind the richest legacies." They offer the following areas that will help your firm "establish (or reestablish) a creative culture in your workplace":

Your special traditions—your standards, values, what you uphold consistently
Your rituals—routines and ceremonies that make your firm unique
Your symbols and language—logos, terminology, or ways of communicating that set you apart and help inspire people to high levels of achievement
Your special ways of celebrating victories—Do you celebrate achievement and reward success rather than just punish failure?
Your work habits—How do people work? Must they work that way? Are your rules too rigid to allow flexible time or working from home or virtual office?

This is perhaps the one idea that Disney's Professional Development Programs will make you realize more than any other—the difference lies in the culture. What standards and values do we have? What behavior do we expect and what behavior will we not tolerate? What is the shared vision of the company? You can't motivate people with a zero-defects campaign, or profit and return on investment goals. True leadership requires that you offer people a vision of a preferred future. Martin Luther King, Jr. didn't say from the steps of the Lincoln Memorial, "I have quarterly objectives!" In what ways have you developed your firm's culture?

CUSTOMER FOR LIFE

In the Spring 1997 edition of Disney Magazine, I read a letter from a parent that sums up the entire Customer Loyalty course and epitomizes the Disney approach to creating Guests for life:

I brought my three-year-old daughter, Merri, to Disney World in September 1996. She asked me every day if she could meet Peter Pan. The only place that we saw him was in the afternoon parade at the Magic Kingdom. We asked every person that was escorting the characters if Peter would be appearing anywhere, and day after day the answer was no.
On the fourth day, we met a man named Toby at the character festival tent. He made a special arrangement for Merri to meet Peter after the parade. We went to City Hall, and they took us to a room behind the counter. When we opened the door, a dream came true for Merri. She ran right up to Peter Pan and jumped into his lap. She was so amazed that she didn't say anything for about 15 minutes. He talked to her the whole time. Then, he told her that they would go get into some trouble.
He took her by the hand down Main Street to Peter Pan's Flight, and rode it with her, narrating all the way through. Then he took her to Cinderella's Castle and said good-bye. He spent about 30 minutes with her and made a wonderful dream come true. I know we will always remember the magic.

Not only will she remember the magic, she'll become a customer for life, bringing her kids and grandkids to Walt Disney World many times. How much did it cost Disney to create that type of loyalty? Where is that captured on an income statement or balance sheet? How "efficient" was it? Where do you log that on a timesheet? What is the value of Merri as a customer for generations to come?

IS LOYALTY DEAD?

Pick up a business book today and you'll most likely read about loyalty being dead—the average customer only stays for five years, the average associate only stays for four years, and so on. I disagree. If you observe human behavior—again the revealed preference—you will discover that people, by and large, are very loyal to their spouses, families, neighborhoods, schools, churches and synagogues, and the nonprofit institutions where many volunteer.

No, loyalty is not dead in the business world. What's dead is a reason to be loyal. You must earn customer loyalty. You have to invest in the relationship, not just satisfy existing needs. You must move your firm from the Passive (satisfaction-based) to the Interactive (commitment-based) side of the Customer Relationship Scale and develop a long-term partnership with your customers. That is how Disney creates "Moments of Magic" and superior financial results. And you can do it, too.

Author's note: No one at Disney tried to control the content of this series, and any errors it may contain are my fault alone.