Disney Customer Retention

Importance of Customer Retention: Disney movie is the most valuable movie in the world
Show its strength: Disney Movie Market Share, far superior than its peer,

To give you an illustration of Disney customer retention, consider this fact: since its opening in 1955, 10 years after World War II, The Mickey Mouse creator has raised ticket cost for Disneyland from $2.5 to $129, but the visitor still happily comes.

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In short summary, the importance of customer retention is: it guarantees the life of your company. Customer is life for business, without them, who will pay your bills? Here we explore Disney as a case example to give readers a deeper understanding of this topic.

Disney Customer Retention: In This Issue:

  1. Happiest Place on The Earth
  2. Business Model Shifting. Disney+
  3. New Adventure
  4. Key Takeaway

The only thing business pursue is profit. This is the first thing that we should discuss.

Revenue Possession: Happiest Place

Owning the customer means owning the market, owning the market means preserve your revenue and earnings. In the last ten years, Disney has expanded its earnings from 3,963 M into a behemoth level of 11 B.

In the same period, shareholders enjoy 489% capital gain. The market value of Snow White’s creator rose from 29,55 in 2009 to 144,63 price levels in 2019 before Pandemics dragged it down to level 101 in April 2020. The more good news is, shareholders also get a dividend payment with a 488% growth rate.

Importance of Customer Retention: Disney not only has strong financial performance, but also market appreciation for its share price
Disney economic moat translated into shareholder wealth
source: Disney annual report 2019
image source: pxhere, edited by me

In Disney, you see the luxury of “retained customer” bringing “the happiest place” for both shareholders and stakeholders.

Importance of Disney Customer Retention: When The Model Change.

Business – whatever its sector – lives in changing environment. Like an organism, evolution happens. Before the smartphone boom, the one-time purchase becomes the most common business model for every company: You buy Microsoft Office 2003, then you get that version forever, you buy Adobe Photoshop 8, then you own it for a lifetime. Same with Disney, you buy Aladin DVD and you can watch it anytime.

Technology revolutionizes that paradigm. Now with “computer” and internet in your hand, updating and upgrading services is easier: then the business model change. More compatible with many platforms: You can edit an xls file from your smartphone and get the result on your laptop. It also gives more benefit to the customer: It is self-updated and upgraded via the cloud, a no-brainer choice.

Disney experience that transformation too. You could watch Mickey Mouse from your laptop or iPad, not only playing on your boring DVD player. More agile, you “buy” the entire Disney Library, not only a specific title. You don’t own it – you just don’t need it – but you can access it anytime anywhere.

This is Disney+. A subscription platform that Mickey Mouse creator launched in November 2019 – a month before the first coronavirus outbreak in Wuhan. For $8 a month, Disney+ give subscriber to access Disney Fantastic Library.

And once again the magic happen.

The result of this shifting is even beyond the highest expectation from management. Disney+ global subscribers fly from 26.5 million in Q1 2020 to 95 million in Q1 2021.

This is how customer retention plays a significant role. When the model change, when the way how customer spends their money change, they keep sticking with your product.

importance of customer retention: when you raised your product cost, but the customer still hunt you. This is Disney.
Disney economic moat: casting higher price
source: slidego.com

The Family Friendly

The explanation of these customer fanatics is simple.

Imagine you come home from your 9 – 5 work1, you feel tired, exhausted, and see your kid around. In this family time, Disney always becomes your choice to watch. Another movie or series may be too “r – rated.

And even if you are tired of that kind of mythical world and story, Disney still has another advantage: ESPN. Watching Le Bron “King” James vs Steph Curry or Bayern Muenchen humiliated FC Barcelona may be the best choice for the rest of the day.

By the way, before Disney launched its “plus” platform, they had launched ESPN and this service also records a great result in terms of subscriber number: From 1,4 million in Q1 2019 to 12.1 million in Q1 2021 for the US only.

The magic of Disney is beyond the business model and technology revolution.

New Adventure

Another reason to keep your customer is it is easier for you to introduce a new products.

Disney could create brand new characters without losing the customer’s curiosity. Like the Frozen case or Moanna. Moreover, once the firm creates a new story, it can exploit and monetize that story in many ways: Frozen Castle Light-Up Figurine Limited Release for almost $150 for instance.

Sound simple?

Not every company has these privileges. Windows is well known for its productivity tools but fails when launching its forgotten “Lumia Windows Phone” or its ARM laptop. To get you the number of how this failure translates into financial, The Founder, Bill Gates said this opportunity cost is around 400 B.

If you doubt how good Microsoft is to lock its customer, you could refer here. My point, You can’t say it is easy when even the best fail.

Selling Hope, Marketing The Fantasy

The reason why Disney has extremely strong customer retention is they play with our psychology. Disney packages dream, fantasy, hope into a movie with a specific duration. Disney character resonates with the person you want to be, not only kids but also adults like us

  1. Freedom
    Moanna has inspired us. To stand on our ground and to fight for our beliefs. Even when all is a blur. To be free following your passion. We want to be like Elsa, finding our true selves.
    We hate to be silent. We love to express our emotions, our opinions, our thoughts. We hate to be speechless.
  2. Being special – and powerful
    Everyone loves to be special and have power as his or her identity. It always touching to see Elsa stomping on the ground to create her ice kingdom or when Tony Stark gets into gear. Having power gives us confidence. A uniqueness that differs us from others. A proof or purpose of our existence, something that defines us.
  3. Adventure
    No matter how old we are, going to a new place gives us the sensation that we have surpassed a hurdle. Disney invites spectators into places that none ever imagined. To name a few: Aladdin – jasmine flying carpet scene. The Elsa Frozen Kingdom, World of Avatar, or Intergalactic Journey
  4. Involved in something big
    Now you have power, freedom, how about save the world from villains? Aladin Jasmine (and Ginnie) save Agrabah, Avenger save the world, Elsa – Anna saves Arendelle. We love to see happy endings and how good defeats evil. This is the world we always want to be.

If your business sells dreams, hope, and how the world should be, who could compete with you?

How Disney retains us
a stock photo: pxhere

Disney Customer Retention: Key Takeaway

  1. Retain the customer is the most important thing for business. It keeps your company survives among the competition. In Disney’s case, customer retention translates into strong financial performance.
  2. For investors, seeking business with customer retention capability is a must. Investing deals with risk. You can reduce the risk of losing money by choosing the right company with a strong economic moat.
  3. Disney customer retention rooted in its creative and inspiring work which almost impossible to replicate.
  1. Suppose you are working at the office in the post COVID world []