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The Stakes are High

Will the strategy work? Theme park analysts and business strategy experts say it's a tall order—and a risky one. They suggest that Disney's new CRM strategy—ahead of that of rivals Universal Parks & Resorts and Six Flags Inc., and more comprehensive—represents an experiment in the way businesses might interact with customers in the future. "The problem with today's CRM is that it doesn't engage consumers as equal problem solvers in the quest for value all around," says Prahalad. "The way CRM has evolved, unfortunately, is by taking a company-centric view of customers rather than using customers as co-creators of value. With Pal Mickey and other initiatives as first steps in a longer journey, Disney is attempting to redefine CRM, using it as a co-creator of experiences to help find and deliver value." And making that fundamental shift won't be easy. "It's like everything that no one has done before," says Parkinson. "In theory, it's great. But in practice, there's a whole host of things you have to figure out how to do, from practical engineering-type things all the way up to measuring the acceptability with the target population segment."

Meanwhile, analysts warn that company officials need to be mindful of their product. "Technology alone is not going to solve the problem," says Patrick McKeigue, an analyst at Independence Investments in Boston. Adds Jessica Reif Cohen of Merrill Lynch: "It's important to keep the attractions fresh. To keep people coming, they need to have new attractions or events. That's the issue with theme parks—you have to constantly reinvest."

To be sure, it's a far-reaching experiment, say analysts. But it's a must-do in a corner of the entertainment business where competing for customers will be increasingly tough amid a sensory onslaught of digital and interactive experiences, an explosion of new digital and media devices, and a marketplace increasingly filled with customers who have no clue as to what it was like to be in an old-fashioned, digital-free environment.

"Disney's only real risk—and it's a big one—is to know when to be digital and when to be human, and therein lies the greatest challenge with the next era of CRM as defined by Disney," says Saffo. "Sure the technology is tough, but the real test will be in knowing what to control and what to leave to chance. Either way, Disney's experience will be a lesson to us all in how to do customer service for the 21st century."

This article was originally published on 12-01-2003
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