June 23, 2017
How the connected home fitness company creates top-notch customer experiences that get members back on their stationary bikes.
Photo source: Peloton
When it comes to its cycling workouts, Peloton is all about pushing the limit. The connected home fitness company applies a similar mentality to its customer experience and has grown into a $ 1.25 billion unicorn, per TechCrunch’s figures, as a result.
Brad Olson, SVP of member experience for Peloton, sat down with Forrester Research principal analyst Allegra Burnette at the research firm’s CXNYC Forum in New York to discuss the brand’s customer experience strategy and share tips on how to build loyalty.
1) Leverage showrooming
Peloton’s stationary bikes cost about $ 2,000, so Olson knows that they’re a “considered purchase” — one he said can take customers two to three months to complete.
“It takes time to educate our future members about what we’re offering,” he said.
But because the company has only two physical studios — the rest of its cycling classes are streamed live or on-demand — a lot of potential customers didn’t have the opportunity to see or test the bikes before they purchased them.
To solve this problem, Peloton opened two dozen showrooms across the U.S, according to its website’s count. The company’s bikes are also in select Westin hotels, a sensible partnership considering that Olson used to lead the loyalty program of Westin’s parent company Starwood Hotels and Resorts.
It looks like the showrooms are effective, too. After opening a new showroom at 9:30 a.m. in Bellevue, Washington, Olson said Peloton sold the location’s first bike at 9:32 a.m.
2) Build a community
Group workout classes are a social experience. But because most Peloton customers exercise in their homes, the brand has to find creative ways to produce this community feel.
One way Peloton does this is through friendly competition. Cyclists can track their performance and compete against others through Peloton’s leaderboard. Olson said they can also filter the leaderboard to compete against specific people, like men in their 30s or family and friends. Those at the top of the leaderboard might even get a shout-out from a live instructor. If they’d rather not partake in this competitive aspect, customers can hide the leaderboard altogether.
Another way Peloton fosters this social experience is through Facebook. According to Olson, 81% of the company’s members are active on the social network. Customers are invited to join Peloton’s Facebook group in an initial onboarding email and are encouraged to share their ride goals and performance with others. Having them take part in this community encourages people to get back on the bike, Olson said.
3) Create emotional loyalty
For Olson, Peloton’s Net Promoter Score is an important metric. And despite having a solid 91, he said the company is always trying to improve that score. Developing a sense of emotional loyalty among its customer base is key to achieving this goal.
One way Peloton fosters this emotional loyalty is by celebrating customers’ milestones, such as their 100th ride. When this happens, the cyclists get a shout-out from the live instrucutor and receive a free t-shirt, which they can then take pictures of and share on social media.
“It helps sustain that emotional delight of hitting that hundredth milestone,” Olson said.
He also said that the company likes to practice “service recovery”— taking a negative experience and turning it into a brand advocacy moment. If a customer complains about not receiving his Peloton bike when he took the day off to have it delivered, Olson said, Peloton will send that customer a handwritten note along with some free apparel.
4) Solicit feedback
To ensure that it’s optimizing its customer experience, Peloton surveys patrons throughout their member journey. This might include sending them a survey after they visit a showroom and again once they make a purchase, Olson explained. He also said that Peloton looks for trends across its email and social channels and shares uncovered insights across the company.
5) Empower employees
Every brand wants to delight its customers, but not every company gives its employees the freedom and power to do so. Olson said Peloton empowers its employees to deliver this delight and to deliver it at scale. This includes empowering the brand’s social team to share user-generated content, empowering the product team to develop new features that surprise customers, and empowering instructors to form one-to-one relationships with cyclists, he noted.
“Everyone is engaged and empowered to delight our members,” he said, “and that makes it easier to scale.”