Numerous articles have been written in the past few months about Ford considering massive changes in their marketing department. I have some advice for Alan Mulally: hire someone from Disney. In fact, I would encourage the entire industry to begin benchmarking Disney when it comes to addressing customer demands and, above all else, building strong brand relationships.
Relationships are vital in business, especially when it comes to building word-of-mouth and keeping customers loyal to your brand. This became pretty self-evident to me after spending four nights aboard the Disney Wonder, one of the two cruise ships owned by the Walt Disney conglomerate. When boarding the Northwest Airlines jet heading back to Detroit I was figuratively smacked in the face with the realization that Disney knows what their brand stands for and what their customers expect; they consistently deliver above and beyond every expectation. It’s all about the details. And it is all about having that profound understanding of those whom you are trying to serve.
My thinking turned to the attention paid to relationships and details when it came to one the largest value purchases most of us will make in our lifetime: the automobile. When was the last time you were “wowed” by the brand that stands behind your vehicle? Do you even know what the brand of vehicle you drive stands for? Why it exists? Do you think the people who are responsible for it do, and if so do they as deeply as Disney does?
As the Detroit-based automakers continue to try to find ways to stem the raft of buyers sailing off in other directions, it may be imperative for them to take a look at what has made a brand like Disney so successful. It’s not about being the biggest player in the market or offering the lowest price. Disney accounts for less than 10% of the theme park, resort, cruise, and time share markets, generating nearly $10-billion in revenue last year. Yet, its flagship resorts around the world achieve a 90% occupancy rate with an average daily rate of $350. Load factors on its cruise ships run 50% higher than industry average, providing solid double-digit returns on its invested capital. More than 70% of the cabins on its first Mediterranean cruise sold out in one day.
You’d think this success would make Disney hungry to grab more of the market through massive expansion, kind of like when carmakers work their plants overtime when a product is hot. Not so. Disney has no plans to start an airline anytime soon or build theme parks in every facet of the country. They know they have to stay true to their credo as an “experiential” brand and make consumers want to go out of their way to experience what makes Disney, well, Disney.
Disney has not been without its own warts. During the early 2000s, the company experienced weaker earnings and lower attendance at its parks and management ordered heavy cost-cutting. The results infuriated Roy Disney—the nephew of Walt—causing him to make some scathing comments about those leading the company at the time: “You can’t fool all the people all the time. Nor can you succeed in our business by trying to get by on the cheap. Consumers know when they are getting value for their money and they know when you’re selling them second-hand goods,” he said in 2003. Sound a bit familiar? These are exactly the same tactics the auto industry has tended to follow.
Admittedly, there are a few automotive brands that know how to manage the ownership experience, with MINI and Scion at the top of the heap. They know who their consumers are, what they want and how to manage their relationship throughout the vehicle ownership process.
I am aware auto retailing and manufacturing isn’t the same as theme parks and resorts, but there are some notable similarities. Like the auto industry, Disney does not control where its products (tickets) are purchased. What it does control is what happens when you arrive at its parks, resorts or cruise ships, from the moment you walk through the gate until you head back home. Disney’s Imagineers pay careful attention to the details when it comes to interacting directly with their products, and everything follows the carefully crafted Disney theme. On the cruise ships, for example, Disney had to get a wavier from the U.S. Coast Guard to have their lifeboats painted in the same gold tone as the famous buttons on Mickey’s pants. The ship’s horn is also unique, playing the first seven notes of “When You Wish Upon A Star” as it leaves port.
What would it take for an automaker to provide the same amount of attention to detail and relationships as Disney does? The investment would be minimal at best, especially considering it typically costs between one-fifth to one-tenth the cost of attracting new customers.
The time has come for automaker’s to embrace the strategy of looking at their customers as more than just an account number at the captive finance company and come to the realization that relationships matter.