Peloton’s connected fitness experience shot to success during the early days of the pandemic, then tripped, losing around 34% of its stock value by the end of 2021. Despite this uneven start, one metric has stayed steady: Peloton’s customer retention. As recently as February 2022, Peloton kept 92% of its subscribers.
Throughout its company history, Peloton has stayed focused on creating and maintaining a core following of devoted customers. Peloton has managed to keep stable support by using social media to build and sustain a virtual community of loyal users.
Community Is at the Core of Peloton’s Product
Peloton was founded in 2012 to offer engaging, on-demand cycling classes. That was envisioned as a solution for busy adults who wanted the shared experience that classes offer but who didn’t always have the time to make it to the gym.
While Peloton initially struggled to get investors, by 2016, the company attracted several rounds of funding while earning $60 million in revenue. Peloton saw steady growth until 2020 when the pandemic accelerated its popularity. By May of that year, sales had increased by 66%, and subscribers had gone up by a staggering 94%. By September, it reported $607 million in revenue.
The company’s core product, the Peloton bike, comes equipped with tech solutions to bridge the gap between at-home workouts and structured fitness classes. A touch screen lets customers follow along with their instructor, and a subscription to Peloton’s service lets riders interact and cheer each other on – just as they would in person. And, since their entire offering is built around supporting on-demand workouts, all of this can be done based on users’ schedules.
Innovative Tech and Community Marketing Built a Virtual Gym Full of Devoted Fans
Peloton’s tech-driven solution to a common fitness problem was innovative, but it wasn’t the only reason behind its initial success. The company also took extra steps to create and support a tight-knit group of fans, like:
- Working with engaging trainers who forge personal connections with customers
- Establishing a private Facebook group where members can connect
- Creating leaderboards to gamify the experience and foster friendly competition
While investors and media outlets were getting excited about Peloton’s disruption to the fitness industry, the company was hard at work building a “cult” following of devoted riders. That following has supported Peloton through periods of skyrocketing growth – and when the company went off track.
Peloton’s Following Continues to Support the Company
Following its meteoric success, Peloton has faced major controversies and challenges. Recalls, supply disruptions, and new competitors all contributed to layoffs and a change in CEO in February of 2022. Peloton’s value dropped to $9.8 billion (down from $50 billion in 2021).
Still, Peloton has managed to retain subscribers. In February 2022, it reported a 12-month subscriber retention rate of 92%. What’s more, Peloton’s connected fitness subscribers – those customers who purchase fitness equipment and pay for monthly classes – have grown steadily since 2020.
Those stats suggest that Peloton’s customers are still devoted to the brand. And giving customers ways to constantly engage with the brand through social media further fanned that fire.
The Peloton Playbook: Using Community Excitement to Build a Devoted Brand Following
From the beginning, Peloton has focused on community building. The goal of a connected fitness service is, after all, to bring the communal aspect of a fitness class into the convenience of your home. That focus is built into its products through community features like the leaderboard and tags, and that same strategy is at the core of Peloton’s approach to social media.
Peloton has 3.3 million social followers across the company’s primary accounts. Instagram draws in 1.8 million followers alone, while Peloton’s members-only Facebook group includes almost 470,000 members. Whether it’s through instructors-turned-influencers or user-generated content (UGC), those followers take center stage across Peloton’s social channels.
Peloton’s influencer marketing strategy is a little different from what we typically see. Rather than directly partnering with established influencers, instructors carry the Peloton brand and presence throughout their personal social channels.
That instructor-led approach to social influencer marketing has worked well. Instructors have earned enough notoriety that they’re featured in other media outlets, and some trainers have established even farther reach:
- Alex Toussaint is a global ambassador for Puma (while spotlighting Peloton)
- Cody Rigsby competed on season 30 of ABC’s “Dancing with the Stars”
- Robin Arzón is the New York Times bestselling author of “Shut Up and Run: How to Get Up, Lace Up, and Sweat with Swagger”
Each Peloton instructor brings their own unique personality and motivation style to their classes, so customers will get a different experience if they take classes led by different instructors. And, once a customer finds an instructor that they click with, they tend to stick with them. That’s how individual instructors draw devoted fans – and the engaging and motivating experience they create for customers may explain the company’s consistently high retention rate.
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Peloton taps directly into its devoted fan base with its refer-a-friend program. Through this program, customers earn up to $600 in credits each year for getting their friends to sign up with Peloton. For a product and subscription as pricey as Peloton’s, offering a referral-based credit like this one is a smart move. For products priced over $100, customers prefer to see numerical discounts (not percentage-based price reductions).
Peloton ratcheted up the referral marketing in early 2022 with its “Treat Yourself. Treat Your Friends.” promotion. With that deal, the company offered $300 off a new bike or treadmill that was usable for up to five eligible orders – meaning current customers and their friends got a powerful incentive to double down on their devotion to Peloton.
Referrals are a great way to harness word-of-mouth buzz and turn it into customer acquisition for your brand. Referral programs give your current customers an incentive to share codes over social and pique the interests of their friends while also offering a deal to new customers.
Referral marketing establishes brand trust by tapping into customers’ real-life relationships. While potential users may not feel swayed by your ad campaign, they’re much more likely to trust a suggestion from a close friend.
Social Media Listening
Social media listening helps you figure out what really matters to your customers and potential customers in your market. By tracking and analyzing the conversation happening on social media, you can pinpoint trends, shared interests, and customer needs. The goal here is to develop a process that addresses rapidly changing customer needs – which is a great way to grow your business.
Peloton routinely updates its services, adding new programs and expanding its exercise equipment line based on how it can best meet customer needs. It also recently launched a rebranding effort centered around the company’s core goal of motivating users to keep working out. That campaign is based on how Peloton customers find the motivation to keep working out:
“We wanted to get back to the core of what makes Peloton so special, and when we looked at our countless Member communities, as well as the research on barriers and drivers to fitness, one core idea kept coming up: motivation,” according to Peloton SVP, Global Head of Marketing, Communications, and Membership, Dara Treseder.
UGC is a low-lift way to drum up extra excitement online while engaging your existing customer community. Your customer highlights your product’s benefits, and you share the content. For a fitness brand, in particular, UGC is perfect for spotlighting the real results your customers have achieved thanks to the brand.
UGC works because it comes off as trustworthy. Customers are over two times more likely to see UGC as authentic (compared to branded content), and more than 90% say that authenticity matters when it comes to supporting a brand.
Peloton passes the mic to its users in a variety of formats. For instance, the Peloton Apparel Instagram account lets users’ photos and tags show off its exercise clothing in the real world. On the company’s main Instagram, the company shares engaging content that celebrates progress, like a user video showing off a week of workouts.
On YouTube, Peloton went the extra mile by bringing members into the studio to share what they love about their favorite instructors – before giving each member a chance to meet their idol.
In each of these examples, Peloton is sharing its platform (and follower count) with its customers, giving them a stage to tell their stories. That’s empowering for customers and inspiring for audiences – which is why UGC is such an effective marketing strategy.
Create Sustainable Customer-led Growth
Rapid growth can be a great thing for any startup, or it can bring about unsteady, tumultuous change that’s difficult to maintain. Growth alone isn’t enough to sustain a business long-term.
A devoted following, however, can provide that stability. When you take the time to build a community, you build a solid foundation that supports the business in between rapid growth periods. And you’ll keep making progress no matter what.
At Extole, our goal is to get you that customer-led growth. We help you build and manage strong brand advocates that can act as a referral network for your company. Sign up for a demo today and find out how we can help you grow sustainably.