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SF Mostly Metrics Happy Hour
I’d like to buy you a beer if you live in the Bay Area on Thursday May, 14th.
Come hang with fellow Mostly Metrics readers.
I’ll be telling my favorite renewal rate jokes and I’ve asked the bar to play an eclectic mix of 80’s Joel and deep cuts from Creed’s second album.
Can’t wait to meet you IRL.
my wife is gonna be so pissed that I included a picture of her in my newsletter
What Going to Disney Taught Me About Pricing and Packaging
Who needs McKinsey to craft a pricing strategy when you can just take three kids under four to Disney World?
After 70,000 steps, two turkey legs, and approximately $6,000 I will never see again, I have a new appreciation for what it means to build a pricing strategy that meets the customer at their moment of maximum willingness to pay. Disney has more captives than customers (happy, sticky, mouse-eared, semi-ironic tee-shirt wearing captives). And they have engineered nearly every touchpoint - from the ticket to the hotel to the food to the ride exit - to extract value in a way that still somehow feels like fun.
Here’s everything I learned.
Three days of park tickets is cheaper than two
Disney prices their three-day ticket bundle lower per day than the two-day ticket.
There are even times where you can get a special promo for three full days that are cheaper in absolute dollars than two (that’s what we experienced)
That third day means another night at the hotel, two more meals in the park, more souvenirs, and another round of $6 water bottles on a 94-degree Orlando afternoon.
Disney is willing to discount the entry point to sell you another full day inside the ecosystem. The ticket is almost a loss leader.
Think of it as seat-based plus consumption.
Disney discounts the seat (the ticket) to maximize the consumption (everything you spend once you're inside).
The longer you stay, the more the usage revenue compounds.
1 more day = 1 more mickey ice cream
The MagicBand: $42 to upload your credit card
You pay $42 for a wristband that is, functionally, Apple Pay at Disney.
What it actually does is remove friction from every purchase decision for the next three days.
People consistently spend more when payment is invisible. Amazon built one-click checkout on the same insight. And Disney put it on ya wrist in 2013.
The extra wrinkle is that people actually like wearing them.
My kids refused to take theirs off for four days after we got home.
Plus, there’s a status element that makes the $42 feel like a souvenir rather than a toll. IDK what it is about human psychology, but it works.
Consumption-based models live or die on how easy it is to consume.
If your customers have to think about whether to use more of your product, they'll use less.
Dynamic pricing on Lightning Lanes
Lightning Lane is Disney's skip-the-line product… and the price is not fixed.
On peak days, it runs close to $300 per ticket.
But when you're there during off-peak days, it's closer to $150.
Many people don’t know this because they push you to lock in your pricing seven days in advance to “get a better price”
But it's more like game time tickets where you can actually get a lower price right before kickoff (or park entry) most of the time
With three kids who will ask me 12 times to ride the same ride again, I bought Lightning Lanes. Day of. Twice.
This is all incremental revenue on top of my park tickets, which I already paid for.
Their pricing architecture allows them to maximize for people's willingness to pay regardless of when they buy
The anxious planner pays a premium for certainty
The spontaneous buyer gets the leftover inventory at a discount.
Both feel like they won.
They let kids eat free (and then charged me $200 for pancakes)
Kids under 3 get into the parks for free + eat free at any buffets.
Fun fact, they actually moved the “free” cutoff UP from age 2 to 3 this year… so you think… more value!!!
Psych! It’s all baked into the parents pricing
The character breakfast is $65 per adult
1. Wut?
2. My kids ate approximately four bites each because they were too busy losing their minds every time Tigger walked by the table (my daughter would stand on her chair, swing her napkin like Petey Pablo, and yell LION LION LION)
I am not exaggerating when I say I spent the entire meal attempting to eat my weight in mouse-eared Belgian waffles just to feel like I didn't get hosed.
BTW: The check was still ~$200 after factoring in the $6 orange juices.
And honestly? I’m not that mad because the pricing must also take into consideration the clean up duty that follows.
The poor carpets at the Contemporary have amassed 30 years of kids smearing eggs and sausages.
For those running B2B software companies: If you have a free tier, know exactly what you're “giving away” and what you're getting in return.
Free only works if the paid side of the equation is priced for the full value of the moment (not the cost of the food). Speaking of food…
They rebranded a normal pizza as "jumbo" and charged $42 for it
OK, this was maybe the most egregious seemingly random act of pricing
Disney sells "jumbo" slices of pizza on the boardwalk.
my mans, you forgot to cut my pizza
They take a normal large pizza and cut it into four slices instead of eight.
They charge $10 for cheese. $12 for pepperoni.
My family ordered four slices (the layman’s 8) and they simply handed us a normal pizza in a box.
But then we had to cut it into smaller slices ourselves so the kids could eat it
So, like, I paid $42 for a large pizza and the privilege of doing my own prep work.
The part that gets me: people were walking around the boardwalk holding these things saying "yo! look how big this slice is!"
Sir, that is a normal pizza. I have been to a Pizza Hut.
Sometimes it’s easier to repackage something you already offer, and actually do less work for the user.
Disney cut two less times and made something cool by calling it Jumbo
Exit through the gift shop
Every major ride at Disney deposits you directly into a themed gift shop on the way out.
it’s smart. You just had the peak emotional moment of your child's young life. You are both still buzzing. Now here is a $38 stuffed animal of the exact character from the ride you just rode.
We bought the Pirates of the Caribbean swords. Also, my kids have never seen Pirates of the Caribbean.
The gift shop works because of when it shows up, rather than what's in it.
You can literally get everything sold in the gift shop for half the price on Amazon when you get home (swords were approx a 3.2x mark up)
But you’re willing to pay a premium to memorialize a moment, a moment when you're happy and your defenses are completely down (also, not a sword metaphor)
A BDR calling you 30 seconds after you hit your first value milestone in a product would be considered aggressive, yet smart.
Disney does the exact same thing and it feels like a natural extension of the experience.
The mistake many companies make is timing the upsell to the calendar contract cycle instead of the customer's best moment.
Disney doesn't wait for the annual review (or the marketing email asking you to come back to the parks next year). They put the gift shop right after the ride and go for the kill.
The commute to the park is part of the park
Animal Kingdom has a massive parking lot. Maybe the largest parking lot I’ve ever seen. I’m pretty sure 1/8th of the parking lot is in South America.
Getting from your car to the park gates requires a trolley ride.
Normally this is exactly the kind of logistical friction that puts you in a bad mood before you've even arrived.
Disney made it a bit.
The conductor told my kids that stepping off the left side of the trolley was lava. They screamed and laughed and thought it was part of the planned adventure.
The same principle runs through most of the wait lines.
Tiana's Bayou Adventure (old Splash Mountain) has theming built into the entire queue so the 45-minute wait feels like it's a wandering escapade, rather than dead time.
Every product has dead time.
Onboarding flows, loading screens, trial periods.
Most companies treat them as necessary friction.
Disney treats them as valuable real estate and part of the experience.
Florida resident pricing
Florida residents get 30-40% off park tickets.
This isn't Disney being charitable to locals.
A Florida resident doesn't need a flight or a hotel room.
The total revenue Disney captures per trip from that customer is materially lower than a family flying in from Ohio that's staying five nights in a Disney resort.
So they right-price the entry ticket for the segment to get more bodies in the park, and maximize LTV on additional food and merchandise.
Most companies have a version of this customer: lower acquisition cost, lower attached revenue, different economics across the full relationship.
The mistake is applying the same pricing to all of them and wondering why conversion is soft in certain segments.
You can get more customers, they might just not all be able to pay you the same.
Segment pricing is less about giving discounts and more about understanding what each customer type is actually worth (and willing to pay) across the full relationship, and pricing the entry point to match.
You cannot do Disney without the Disney app
Before you do anything at Disney - before you decide where to go first, what to eat, whether the wait time is worth it - you open the app.
You need it for directions
Except the directions are not great.
It doesn't tell you how far something is in actual distance? Like wtf I’m pushing a stroller with 700 pounds of kids and candy in it through 88% humidity
It just shows a path with fantastical street names and expects you to figure it out. I digress.
You order your food through the app ahead of time.
It's where they push the Lightning Lane upgrades.
So every time you open it to check wait times, you are also inside their sales funnel.
By the end of the trip the app is your guide, your cashier, your map, and your concierge.
It is also, from Disney's perspective, the most valuable data asset in the park.
Most companies would kill for this kind of owned touchpoint - a single interface the customer opens dozens of times a day, voluntarily, that doubles as a transaction layer.
I’m Tired
I limped out of Disney three days later having spent more money than I planned to spend and somehow still feeling like we got our money's worth. I think it’s a weird form of Stockholm Syndrome.
Disney doesn't win by being subtle about the pricing (an iced coffee is $7.50, nothing is subtle). They win because every part of the experience is connected to every other part.
How you get around.
How you pay.
How you skip lines.
How you order lunch.
How you decide what to do next.
It all runs through Disney. And it’s all a cohesive (high priced) experience.
Plus, there’s no escape valve. No third-party food vendor with normal prices. No outside tour operator running a cheaper Lightning Lane equivalent. Hell, even the Minnie Mouse decoraded Lyft you take to get there is Disney branded and Disney priced. Try getting an uber - it’s a literal dead zone!
Every company wants pricing power. But they usually think about it as a single product to be sold. Disney does (and creates) a world better - an ecosystem where the customer never has a chance to price shop. And one where every moment (and purchase) is interconnected to the next.
Make sure your pricing and packaging strategy contemplates all moments of the customer lifecycle, not just the one where they pay you.
Quote I’ve Been Pondering
“A friend of mine said he didn’t know how long he could wake up to to such horrible news every day. I suggested he shouldn’t wake up to news at all, and neither should anyone else”
Wishing ample net dollar retention,
CJ
