How Would Disney Run a Bank [Podcast]

There’s a lot we can learn from other industries when it comes to Customer Experience. Making processes more efficient and cutting down wait times are only the beginning.

In this podcast, Maria Abbe sits down with Scott Morgan, VP of Delivery & Client Success at PrecisionLender, as he shares how the customer experience at Disney World can be translated into banking.

Podcast Transcript

Maria Abbe: Hi and welcome to the Purposeful Banker podcast. The podcast brought to you by PrecisionLender, where we discuss the big topics on the minds of today’s best bankers. I’m your host Maria Abbe, content manager here and I’m joined by Scott Morgan. He is our VP of delivery and client success.

Thanks Scott, for joining us. Today we’re talking about the customer experience and what we can learn from other industries. Scott’s here to help us expand our thinking and also to share some valuable lessons from some of the best minds in the world.

Scott Morgan: Maria, when I say the words “customer experience” let me ask you, what companies come to mind?

Maria Abbe: That’s a great question. Let me think. Apple, Nordstrom’s really great. Maybe Zappos? They all focus a lot of attention on customer experience, wouldn’t you say?

Scott Morgan: Yeah, they really do. Those are good examples. You mentioned Apple for example, they’ve established almost a cult-like following around their experience. Their customers are some of the most loyal people in the world. One that comes to mind for me is Disney. I think they’re a great example. In fact, I have their mission statement here in front of me. Let me quote it for you. It say, “We seek to develop the most creative, innovative and profitable entertainment experiences in the world.”

What I focus on in there is the word “experiences.” If you think about Disney, they don’t just make movies. They don’t just run a theme park. They develop the full experience. In fact, I’m actually taking my family to Disney World next month. I have to admit, as much as I hate and despise the high prices and the long lines, they’ve really got a way of sucking us back in again and again and again, don’t they?

Maria Abbe: I love Disney World and I completely agree. I would say it’s always such an amazing experience, but my question for you is how does this translate into banking?

Scott Morgan: I think there’s a lot that can be learned from how they handle their pain points and Maria, that’s what I want to talk about today. How can banks address their own pain points to better improve the customer experience. If you will, kind of put on your imagination hat and picture this moment with me. It’s our first day of our Disney trip and we’re pulling up to the front gates. You know, Mickey and all of his friends are waiting on the other side of those turnstiles, but there, right there pulling up at the same time with us are a billion other people racing toward that same experience.

That’s what kind of gets me frustrated. The thought of those long lines and all those people, I don’t about you but it can cause an anxiety attack for me. That’s one of the most frustrating things in the world for me.

Maria Abbe: Yeah. That’s extremely frustrating. Completely agree but then again on the flip side, the experience is incredible.

Scott Morgan: Yeah. Maria, that right there. That’s what I’m talking about. The problem or their pain point is the wait time but the experience makes it worth the pain. Most people don’t know this about Disney, but within Disney World they have a hidden base called the Disney operational command center or the DOCC. Their entire focus is on getting you to the fun faster. They do things like monitor the traffic in the park and then they make decisions on how to best handle the long lines and the overcrowding. Sometimes for example, it’s as simple as just adding extra cars to an attraction but other times they may be running at max capacity so they’ve got to look for other ways to ease those pain points.

In fact, we’ll link to a New York Times article that provides a great view into the typical day at the DOCC. Sometimes they’ll send out extra characters to long lines to just help entertain their guests and ease some of the frustrations. They realize if they can’t speed up the process, then maybe they can add a little value or entertainment while people wait. There’s another great example of how they dispatch impromptu parades to areas with less traffic and those parades will help lead people out of the busier areas into less crowded parts of the park and helps to balance out the overall flow through the park.

If you stop and think about it, they don’t want people standing in lines anymore than we want to be standing in the lines so the key here is that even when they can’t control the wait times, they proactively seek out ways to add to the experience. I came across another article that described how Disney changed their Dumbo ride. It’s been around forever. This has always been a very high demand attraction but the problem is it has a low capacity rate. Only a few people can ride the ride at the same time. In 2012, they actually doubled the size. They built a second carousel right next to the original one.

If you think about it, that second ride has its limitations as well. They did see an improvement in the wait times but it was just a small marginal improvement. The next thing they did, is they changed their focus and instead of trying to eliminate the problem, being the wait times, they looked to change the whole customer experience. They came back in and what they did is they added a huge air conditioned circus tent and that now acts as a staging area for both rides. If you’re at Disney in the middle of July or August, you’re not standing there in the blistering heat. All the Dumbo loving patrons, they can wait in the air conditioned protection of the big-top.

Then they also added things like jugglers and characters that walk through the crowd to provide some additional entertainment. There’s still a wait but it’s a much better experience now and in true Disney fashion they’ve added shops and restaurants so the people can spend more money and they almost forget that they’re still waiting in line for that same ride.

Apply this example to some of the problems experienced in the lending department. Customers are expected to wait weeks, maybe even months while the bank bickers and argues over the terms of their loan and they duke it out in the underwriting and loan committee.

Maria Abbe: Yeah, so is there anything that can be done to reduce these wait times?

Scott Morgan: You know, that’s a good question. I think so. If you stop and think about it, if we put some trust into the hands of the relationship managers who are booking these deals, I think we can cut the wait times down. For example, think about this; a lot of the loans that a bank sees are really mirror images of the loans that we saw last week and the week before that and even months before that. If the bank has instilled a trust in the lenders and they provide them with powerful solutions and then then also transparency of what’s expected of them, then I think the process can be streamlined. There’s no reason why these common loans have to have every single persons in the bank signature to get approving. I think we can put some faith and confidence into the lenders and know that they’re doing what’s best for the bank and streamline that process.

Now Maria, I know that idea right there could be very scary for a lot of banks and I’m not suggesting that we let the lenders make every decision. After all, there’s a reason why we have an exceptions process but I think we can give most lenders the authorization to make some of those decisions, especially when it’s an obvious benefit for the bank.

Maria Abbe: I can see how that could help with cutting down that wait time but I can’t imagine that it’s the only pain point for the bank customers. What are some other ways that banks can improve that experience?

Scott Morgan: I think there are four basic must-haves that every bank should have in place. Number one, an outline of your normal loan process. If you stop and think about it, do your lenders have something that they can share with their customers that explains your lending process? This shouldn’t be a complicated five or six page flow chart that says, “If yes, then no or if no then yes,” but rather just a brief simple outline that just covers the normal steps and expected wait times.

Number two, I think you have to have a game plan. Do your lenders develop a detailed plan for their borrowers? Do they set the appropriate expectations on what the borrower needs to provide and when they’re going to need to provide that information. This is one that hits home for me. I have to confess that there were times when I had to call customers 4:30-4:45 on a Friday afternoon and I’m begging them to send over one more year’s worth of tax returns before the underwriting team left for the weekend.

If you think about it, that’s not fair. It’s not fair to our own internal departments and our own internal teams and it’s not fair to the clients and that’s my fault because I wasn’t prepared and I didn’t inform my customer exactly what they needed to provide and when. Have a good game plan in place.

Number three, communication tools. I’m actually going to break this up into two pieces. Number three is going to be communication tools within the bank. How do your lenders communicate the details of their loan requests to other departments in the bank? The best banks that I’ve worked with, they’ve integrated their systems so that the lenders enter the details of their pricing request once and only once. That information is then pushed through the underwriting, the approval and the documentation process. If your employees are entering in the same data, into multiple systems and at multiple times, then we’re causing unnecessary delays. We’re actually inviting potential costly mistakes. This hurts the customer experience. It’s got to be something that’s addressed now as opposed to just letting it go.

The fourth and final must-have would be communication tools but with your client in mind. Your lending team should have provided the outline and the game plan early on in the process. Then there should be a plan in place to have systematic updates. If there’s every any kind of a deviation from the normal process, your relationship manager should pick up the phone and provide immediate information. The way that I think about it is if your client ever has to call to get an update then that should be considered a failure in my eyes.

Maria Abbe: That makes sense. Those are some great tips. Thank you for sharing. Is there anything else that you’ve learned from your Disney experience that you care to share?

Scott Morgan: Yeah there is. While I was preparing for this conversation I found an article on a more recent change that Disney is really still testing out. Late last year, they introduced surge pricing. The idea of surge pricing isn’t new but it’s new to Disney. They raise the price of admission during their busiest times of year and they’ll actually lower the pricing during slower periods. It’s a new model for them so the jury is still out but preliminary results show that attendance during the first three months was actually down. You may look at that and think that this is a failure but the park’s guests are actually spending more than they did last year.

In fact if you combined the higher ticket prices during those peak times along with the additional purchases, all of that led to a 4% gain in revenue as compared to the same time period last year.

Maria Abbe: Wow. I can’t speak for Disney but I would think a reduction in traffic and an increase in revenue is exactly what they were hoping to see. That’s an improvement in the customer experience and in an increase in profits.

Scott Morgan: Yeah, exactly. I would completely agree with you. Apply that same principle to banking. There are some products offered that seem to be less rate sensitive. Take for example, maybe like a construction loan for example. I’m not suggesting that we can charge whatever rate we want on our construction deals but I have seen that many borrowers are more concerned with the time it takes to get to the funding than they actually are with the rate itself. My question is, can we charge a premium on this service if we deliver a better customer experience? Could we for example, could we shorten the time it takes to get to a loan approval or better yet, can we reduce the amount of work and time it takes to get to an actual disbursement?

Builders want access to their funds instantaneously, not next week so can we gain a competitive advantage if we’re the most efficient loan shop in town? For other products. Think about those products that don’t exactly fly off the shelf. Banks should measure their appetite for growth. If the portfolio is balanced then change may not be needed. Maybe it’s just the same approach as we’ve always done.

However, if we have a hole that needs to be filled in our portfolio, then maybe we get more aggressive on the pricing of that product. Think about it. Just like Disney will accept a lower ticket price in January, maybe we should accept a lower margin on products we need more of.

These are just a couple of examples of how Disney looks to improve the customer experience but the big take-away is that they understand their limitations. Going back to the Dumbo ride for example, adding that second Dumbo ride, it’s not going to eliminate the wait times. That new ride, it also causes additional problems because it takes away precious real estate. That could have been real estate that could have been used on like the new Star Wars attraction for example. More rides aren’t the best answer but we’ll never go wrong by improving the customer experience. Things like an air conditioned big-top with acrobats and cotton candy. That makes the wait more enjoyable and that Maria, that right there is the sort of thinking that we need in banking.

The answer isn’t simply lowering our rates, it’s a better customer experience. People will pay a premium for a better service. You know, my final thought is if they’re not willing to pay that premium, maybe they aren’t the types of customers that we’re looking for.

Maria Abbe: Thank you so much, Scott. That was really insightful.

That will do it for us today. Thank you all for listening. You can always find more information about today’s episode at precisionlender.com/podcast. If you like what you’ve been hearing, make sure to subscribe to the feed in I tunes, SoundCloud or Stitcher. We would love to get ratings and feedback on any of those platforms.

Thanks for listening. Until next time, this has been Maria Abbe and Scott Morgan and this is the Purposeful Banker Podcast.

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