Tiered Benefits

[drusba]

Clearly everything is now speculation, but I would be interested in what kind of benefits people think DVD will actually announce for a privileged tier. Here are considerations in the evaluation:

1. Dean is correct that any tier system's main purpose from Disney's viewpoint is to bring in more sales and thus whatever benefits are created for the privileged tier have to be good enough to make many below that tier have a desire to purchase more points (or similarly make the lower tier feel deprived enough so a number of them will purchase more points). Thus offering further discounts on boat rentals, backstage tours, etc. would not impress.

2. Countering that is Disney's mentality. Based on DVD's (and Disney's) history it will be extremely hard for it to actually provide those "good enough" benefits. I mean something like free APs might approach good enough but DVD and Disney mangement would likely commit suicide before providing something like that. Many of us remember that it took about 10 years of constant begging for members to get an AP discount (off of which Disney still makes a huge profit). Before that they tried introducing what they thought was a "great" deal on a special five day park pass which then virtually no one bought because it wasn't a deal at all. Their mind set thinks that perks they often give are great even though the members believe most of those perks are of little benefit.

3. The mention that the tier system may also be related to number of referrals indicates that the Disney mindset doesn't really know how to create a tier system to accomplish the purpose of getting members to buy more points and may have already doomed the possibility of providing anything that is "good enough." No matter what benefits they attach to referrals that is not going to result in most members going out and knocking on the doors of people they know to generate referrals. Most members simply do not want to be salesmen for Disney. Providing incentives for referrals is not a tier system, it is just what it would be, providing something more than they already provide for a referral which anyone might get one time because some relative decides to buy.

4. Likely they are not going to mess with reservation rules. Besides possible legal issues, doing so really would not be that "good enough" for the privileged tier while at the same time it would anger far too many. Most who have or will buy a huge number of points likely fall into two groups -- they have most or all at one resort and generally don't care if they stay at another or they buy points at multiple resorts to have the 11 month window at each. The 11 month window is already fine. Those members generally get whatever they want at 11 months out. The 7 month window makes little difference to most of them because those who want to stay at other resorts have bought at the other resorts to get the 11 month window. In other words, getting some additonal priority in reservation time may sound like something but it really isn't "good enough." Moreover, if the tier has benefits based on referrals I seriously doubt the benefits will include any preferred booking time.


5. What that means is that DVD will probably come up with some perks but it is really hard to conceive of any that would be good enough particularly when you consider that the Disney mindset would want to assure that the perks really end up making them money, e.g., such as discounts off something where they still profit even at the lower price. For most perks, the DVD side of Disney has to have the agreement of the WDW and park side of Disney. I am not too concerned about the issue of one side charging the other for something. Never forget this is really all one company and in those situations you are simply talking about accounting as to which particular division or subsidiary gets charged for something but whether that occurs or not really has little to do with whether perks will be provided. However, the Disney mindset has a lot to do with it -- they really like to provide perks only if they also make a profit off of them. Maybe they will act differently this time, but that is a questionable maybe.

Thus, what are predictions for what they will actually provide? I am stumped. There is mention of free fastpasses. That is another doubtful choice unless it is very limited in number in which case it will not be "good enough." In other words, they are not likely to give enough FPs for the privileged group to basically rise to having ride priority for all popular rides all day long, which could be "good enough." Another mention was valet parking but there they would be negotiating with another company outside of Disney to which valet has been outsourced and that company cannot afford to provide free valet and Disney is not going to pay for it out of the goodness of its heart. Ultimately, I am guessing the Disney mindset will win out and when it is finally announced many will just go ho-hum.

 

[TisBit]

I think most of your tiers will be mainly perk based. Similar to how many cruise lines have gold, sliver, platinum members and the perks will be based on that type of system.

1-159 points regular dvc member
160-300 gold member
300-500 silver
500+ platinum

If DVC wanted to, they could even include resales into this system as well. So only direct buys count towards higher membership or at least one contract had to be purchased direct. Maybe even that the majority of points had to be direct buy. While this may upset some people, it would basically remove certain perks for people that purchased small resale contracts or even small direct contracts from Disney and grant extras to larger contract owners.

As for the perks that you might see, I would look back at some of the most loved perks that have long since been gone and are most missed/complained about. Jim Lewis hinted at it, when he mentioned that Valet parking had to go because the membership was too large, if they could shrink the membership who received this perk (through tiers), it could be reinstated.

While some of these perks might be discounts, some might be tangibles, gift baskets or preferred booking windows at non-home resorts, etc. While not giving them full 11 month access, maybe giving them 8 month booking instead of 7 month booking, it still gives owners a great advantage, but now your higher tiers get a good advantage too and might enourage them to purchase more points to take advantage....especially if they are on the cuff of making the next level.

Truth is, in our society, if there are people walking around with higher level membership cards, owners are going to want them and will put out $ to get them (within reason). But, it could also easily fail.

 

[DougEMG]

What about doing something like Universal does with a front of the line pass. The front of the line pass is the one reason I always stay on site at Universal.

Disney could do something like give you a room key/card that allowed you to enter any fast pass line any time you wanted as often as you wanted. This would not really cost anything extra and would certainly be something that would tempt me to buy enough points to get this benefit.

Seems to me that this type of benefit would satisfy the requirement:

1. Not requiring members dues to pay for
2. Is cheap for Disney to implement
3. Is a BIG enough benefit to tempt people to buy direct

A downside of course is Disney hotel guest might feel a little ripped off if they were not getting the same benefit seeing as they are also staying on site.

 

[disneynutz]

IMHO Disney's goal is to increase direct sales, period.

If the perk program hurts resales or upsets members then so be it, I don't think that they really care. DVD is under huge pressure from Disney to continue it's recent success so we are going to continue to see various marketing strategies put into place. Some strategies will be really successful and the will continue, others will not.

After spending a couple of weeks here at WDW and a week on the Magic, attending several DVC sales presentations it is very apparent that Disney's brand is so strong, they could sell ice cubes to Eskimos.

Bill

 

[drusba]

What about doing something like Universal does with a front of the line pass. The front of the line pass is the one reason I always stay on site at Universal.

Disney could do something like give you a room key/card that allowed you to enter any fast pass line any time you wanted as often as you wanted. This would not really cost anything extra and would certainly be something that would tempt me to buy enough points to get this benefit.

Seems to me that this type of benefit would satisfy the requirement:

1. Not requiring members dues to pay for
2. Is cheap for Disney to implement
3. Is a BIG enough benefit to tempt people to buy direct

A downside of course is Disney hotel guest might feel a little ripped off if they were not getting the same benefit seeing as they are also staying on site.

I mentioned unlimited fastpasses above and thought that probably would never happen but the more I think about the more I think you are right that the Fastpass Pass, the Unlimited Fastpass, or whatever you want to call it, would be the ideal perk for the upper tier. I mean can you imagine being able to get that and going Christmas Week too? That as you say would not cost Disney anything and would definitely create a high incentive for members to buy into the upper tier. Problem as you note is whether Disney could bring itself to do it for only high DVC members or even do it all.

 

[DVC Mike]

I'm all in favor of tiered benefits - as long as I benefit from them!

 

[Sammie]

I'm all in favor of tiered benefits - as long as I benefit from them!

I am sure you have enough points to be the leader of the band.

Be careful though there is some term, I can't remember what it is, that Dean informed me of once, about only being in favor of something if you benefit personally over others.

I have tried and tried to remember what he called it.

 

[Dean]

If they do a tiered option, it's unlikely that standard will lower than 300 and more likely 500. As I've stated before, I'm not anticipating a tiered system in terms of Bronze to Platinum but if they did something along those lines here's some likely break points.

1000 platinum
750 Gold
600 Silver
400-500 Bronze
under that standard. for 4 levels instead of 5, breaks of 500, 750 & 1000.

I also don't expect a new system that allows existing members to convert over. My best guess is something along the lines of no exchange options for resale buyers but intact reservations options for DVC resorts. I expect existing members to be grandfathered but only for the points they currently own. However, the possibilities are endless including the option to use points for cash (dues, tickets, DDP, etc), the addition of fees for banking, borrowing, etc, etc with free banking borrowing for insiders and a list of maybe 100-200 different options and variations. The other thing I'll say is that the first installment won't be the last one. They'll likely roll it out and see who salutes then revamp over time if needed.

A fastpass option is not feasible for Disney IMOs, free passes are but come with a cost thus the only was I'd expect free passes would be for a VIP system and only for the upper one or two levels, maybe 2 for Gold and 4 for Platinum in the above examples.

I'm all in favor of tiered benefits - as long as I benefit from them!

I know you're being funny Mike but unfortunately that seems to be the DVC member way even when the best choices are clearly in another direction such as the valet parking issue. Regardless, any change they make will help some and hurt others but is more likely to hurt more than it helps. With the issues being discussed, there are likely to be a lot of very upset folks. Take the venom and emotions of reallocation I & II, combine them and multiply by 100 and you're still likely underestimating the reactions we'll likely see.

 

[Sammie]

Dean, are you saying based on your chart, that anyone with 399 points and down will be out.

I know, you don't know but did not understand your wording of your guess.

 

[TisBit]

What about doing something like Universal does with a front of the line pass. The front of the line pass is the one reason I always stay on site at Universal.

Disney could do something like give you a room key/card that allowed you to enter any fast pass line any time you wanted as often as you wanted. This would not really cost anything extra and would certainly be something that would tempt me to buy enough points to get this benefit.

Seems to me that this type of benefit would satisfy the requirement:

1. Not requiring members dues to pay for
2. Is cheap for Disney to implement
3. Is a BIG enough benefit to tempt people to buy direct

A downside of course is Disney hotel guest might feel a little ripped off if they were not getting the same benefit seeing as they are also staying on site.

I actually do not see Disney ever giving this type of perk to DVC or any other onsite guest. One of the things they pride themselves on is that fastpasses are for everyone and not for the elite few. Everyone is treated "equally" during normal business hours regardless of income or staying onsite or offsite, etc etc. Now, we know that is not always the case and they do open early/stay open late....but thats outside of business hours, for their justification.

IMHO Disney's goal is to increase direct sales, period.

If the perk program hurts resales or upsets members then so be it, I don't think that they really care. DVD is under huge pressure from Disney to continue it's recent success so we are going to continue to see various marketing strategies put into place. Some strategies will be really successful and the will continue, others will not.

After spending a couple of weeks here at WDW and a week on the Magic, attending several DVC sales presentations it is very apparent that Disney's brand is so strong, they could sell ice cubes to Eskimos.

Bill

I pretty much agree with your statement, but think it goes deeper than how you put it. If the "tiered" system hurts resales, Disney will not be upset in the end for a number of reasons (to be addressed). Disney however, does not want to upset a large portion of their membership, because this could hurt all of their sales.

If a tiered system were to adversely impact resales, causing more buyers to go direct sales route vs resale, it could in a short term market hurt resale strategy, but in the long term DVC would ROFR more contracts and resell these at the higher prices as "direct" points....maybe not as high as current point prices, but higher than resale prices. You could ultimately have three price points, true resale prices without direct buy benefits (room only), resale through Disney (discount at sold out resorts, with direct perks) and direct new resort points or existing high demand resorts.

 

[Dean]

Dean, are you saying based on your chart, that anyone with 399 points and down will be out.

I know, you don't know but did not understand your wording of your guess.

I'm saying that IF a VIP system evolves, it's likely the cutoff for standard will be at either 400 or 500 and that if your definition of in vs out is being in a preferred VIP level, yes they would be out. The lower the number of levels, likely the higher the number of points required to be an insider.

 

[pcdvc]

I think the fast pass maybe an option given to the highest tier of ownership. Dvc already has the ability to give out VIP fast passes at the sales center on cards with a magnetic strip. It may be possible for them to encode room keys or just provide so many fast passes when you check in. It adds very little cost to implement but is a big plus if you travel during peak times.

We just added on and had some of these fastpasses and used them over Thankgiving trip and came in very handy. Even after fast passes were all given out for the day were able to get on Soarin and Toy Story right away.

It would have to be limited as to how many members were able to get these fast passes as to not overload the fast pass system.

Just my guess!

 

[Maistre Gracey]

I hope fastpasses are not the prize. Although I enter the parks daily, I ride very few attractions. When I do ride, I really enjoy the storyline which starts in the queue. When using a fastpass you actually miss part of the attraction.

MG

 

[culli]

I know you're being funny Mike but unfortunately that seems to be the DVC member way even when the best choices are clearly in another direction such as the valet parking issue. Regardless, any change they make will help some and hurt others but is more likely to hurt more than it helps. With the issues being discussed, there are likely to be a lot of very upset folks. Take the venom and emotions of reallocation I & II, combine them and multiply by 100 and you're still likely underestimating the reactions we'll likely see.

I doubt they will negatively effect any group except a possible option discussed that would give higher tiers an 8 month instead of a 7 month option - oh boy the disboards would blow up it this happened. Fastpasses, bigger AP discount or anything else free doesn't truly hurt or take away from others. However, people get so fired up if someone gets something and they don't. It wouldn't matter if they gave out free stickers that cost a $1 - a reaction by others that didn't get them would be screaming foul play, how could disney do this to us I hate disney etc. So watch out if anything of significance occurs - look at reallocation of points (as you mentioned) which is totally in their right and actually was mentioned to me in detail by our guide as a possibility and even vallet parking.

I personally agree with others that it will be some perk that really won't move the needle for them. Of all the perks we get as DVC owners the only one I consider of any value is the AP discount. However, there is probably a vast majority of owners that don't use this perk and makes it worthless to them. But if it was taken away everyone would scream even those who never purchased an AP and had no plans to ever buy one.

Remember DVD doesn't really care about members after the purchase unless it brings more $$$ in for the mouse. Whatever it is won't cost the mouse anything but they will want a huge return. If ROFR and resales is starting to be a pain for DVD I could see them come up with some bogus plan like Wyndham has for VIP and requires you to buy from the developer. However, that would probably be a big revamp of their current structure to go that far - but just a thought even if not a very thorough thought out thought!

 

[shellspb]

DVC has hired a research company in the SF area with questions regarding the DVC website. They are coming for a 1 1/2 hr. appt. to my home on Thurs. Has anyone else had experience with this? Where did you here about tiering of points?

 

[dizfan]

If Disney wants to truly reward those who help them, could they implement a tiered system where referrals could be treated like a frequent flier program.
The more referrals you get over a year, the better perks you receive.

Many members live in states that prohibit them from receiving monetary rewards. However, I suspect Disney could find some good perks to reward referrals.

When we purchased, our guide was well aware that many people use the Internet to offer to split their referral reward with a guest. There is little Disney can do to stop this.
However, if they implemented a tiered referral reward system, shared rewards would be dead.

Those who want the referral rewards would be forced to become better sales people.

Unless a customer will help sales (either buy more points or encourage others to buy), there is no incentive for DVD/DVC to reward them. (Unless the reward have no monetary cost).

 

[Sammie]

I hope fastpasses are not the prize. Although I enter the parks daily, I ride very few attractions. When I do ride, I really enjoy the storyline which starts in the queue. When using a fastpass you actually miss part of the attraction.

MG

I don't think fastpass would be option, that involves Disney parks. I really think this is going to be about things DVC can offer without involving other departments.

 

[dizfan]

I doubt they will negatively effect any group except a possible option discussed that would give higher tiers an 8 month instead of a 7 month option.

I suspect the large point renters are calling Disney and begging for this one.

 

[Sammie]

If Disney wants to truly reward those who help them, could they implement a tiered system where referrals could be treated like a frequent flier program.
The more referrals you get over a year, the better perks you receive.

Many members live in states that prohibit them from receiving monetary rewards. However, I suspect Disney could find some good perks to reward referrals.

When we purchased, our guide was well aware that many people use the Internet to offer to split their referral reward with a guest. There is little Disney can do to stop this.
However, if they implemented a tiered referral reward system, shared rewards would be dead.

Those who want the referral rewards would be forced to become better sales people.

Unless a customer will help sales (either buy more points or encourage others to buy), there is no incentive for DVD/DVC to reward them. (Unless the reward have no monetary cost).

Shared rewards would be dead but I could see members hanging out on forums just to try and make contact with someone considering buying.

 

[Sammie]

I'm saying that IF a VIP system evolves, it's likely the cutoff for standard will be at either 400 or 500 and that if your definition of in vs out is being in a preferred VIP level, yes they would be out. The lower the number of levels, likely the higher the number of points required to be an insider.

Do you think cutoff would be 400 because a large percentage fall under that, and this would be DVC's way to try and encourage them to move up.

However do you really think there is anything they can offer that would encourage buyers to buy larger amounts of points.

I mean do they have a large enough market for someone to put down $44,000 or more then dues on top of that.