Creating Value the Disney Way with Lee Cockerell – 046

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Lee Cockerell is the former Executive Vice President, Operations of Walt Disney World Resort. He led a team of 40,000 cast members and managed 20 resort hotels, four theme parks, and two water parks. He is the author of three books: Creating Magic, The Customer Rules, and Time Management Magic. He also has a podcast called, Creating Disney Magic with Lee Cockerell, hosted by Jody Maberry.

Talking with Customers

• What is the most important thing you can share about pricing?
  • Pricing is truly about value.
  • It's not the burger, it's how great is the burger.
  • Quality wins out.
  • What can I add to make me worth more and have the customer consider me an investment, rather than a cost?
  • Lee helps people figure out how to pay for him.
  • Things like the exchange rate can affect the price to the customer.
  • Be flexible with non-profits and exchange rates.
  • If you do the right thing, better things will happen in the future.
  • Do not be greedy.

• How does Disney decide how to price?
  • Research how customers spend their entertainment dollars.
  • Interview two million customers per year.
  • Give a good experience so they will come back.
  • Movies and ski lift prices are discretionary entertainment spending and is competition to Disney.
  • Limit the number of people in the park per day so that everyone can see multiple attractions.
  • People with iPads are talking to the customers everywhere in the park – food lines, ride lines, airport, hotel check-in.
  • Disney thinks about things like the single moms, children with special needs, and dietary considerations when creating a package.
  • Treat people like individuals to offer huge value.

• Why did Disney lower its prices during the 2008 recession?
  • People were not going on vacation during that period.
  • Even employed people were scared.
  • For $1200, a family of 4 could come for 4-5 days.
  • Children ate free.
  • The overhead is big, and the parks needed people to keep coming.
  • The margin was affected, but Disney was able to keep its employees and attendance at the same rate.
  • The experience was not affected.

Time Management and Value

• What advice do you have regarding time management and value?
  • The number one problem most people have is time management.
  • Where you spend your time is how your life will turn out.
  • You should be aware of the top three places you will spend your time every day before your day begins.
  • Taking care of yourself is important as you cannot help others if you are not healthy.
  • Family is next. If you do not have your family, the money does not matter.
  • Business and finance should be the third priority.
  • You can then plan what you want to accomplish for each area.
  • Have a system for your life and be very intentional about it.
  • Raise your expectations – be clearer.

• What is the most important mistake a business can make with pricing?
  • Businesses do not think about all the value they can add.
  • Many companies under-price their products.
  • The ones who are pricing too high are not adding enough value.
  • Keep getting better every single day.
  • See what your competitors are doing.
  • When someone is doing a great job, customers do not go looking.
  • Buckle down and find out who is in your business and closely related to your business.
  • Ask questions to find the truth:
    • Is the spending discretionary or necessary?
    • Ask your employees what complaints do you hear most often.
    • Ask your customers, “What os one thing we could do better?”
  • If you are a leader or a parent of a teenager, you are going to have to work hard to know the truth.
  • Your customer should be part of your team.
  • The feedback from your customer is more important than the price they pay.

The Customer Rules

• Can you explain the rule, “Great service follows the law of gravity?”
  • Does the CEO want to have great service?
  • Does the CEO have an environment where everyone matters and they know they matter?
  • It starts at the top and goes downhill like gravity.
  • The CEO/President has to set the example.

• Can you explain the rule, “Become an expert at creating experts?”
  • In business, creating leaders is the job of an operations director.
  • Find the right people.
  • Train them correctly.
  • To be the expert, be better than everyone else.
  • Experts are in high demand today.
  • Put the responsibility on yourself to keep advancing.
  • Be reliable and have a good attitude and you will succeed.
  • Southwest Airlines is a great example of how this can be successful.

• Can you explain the rule, “Fish where fishermen ain't?”
  • Do not do what everyone else does.
  • Find ways to do what others are not doing.
  • Amazon and Chick-fil-A are great examples of how this can be successful.

• Can you explain the rule, “Don't make promises; make guarantees?”
  • Guaranteed, no questions asked; that is better than a promise.
  • Guarantees and reliability matter.
  • If you have strong reliability, your guarantee is not necessary.
  • You gain customers one at a time; you lose them thousands at a time.
  • Empower employees to fix the problem.
  • The Amazon call center has only one rule, “Make the customer happy.”

• What is one of your best stories about creating value for a customer?
  • Self-publishing gives Lee more flexibility to create value with his latest book.
  • He always wants to make sure he is enough for his customer and family.
  • “Do you considering yourself a teacher?”
  • The people he works with will get more than they expect.

About Lee Cockerell

• Investor and teacher at Thrive15.com
• Website: LeeCockerell.com
• Twitter: @LeeCockerell