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Peloton’s business of stationary at-home bikes, treadmills, and subscription-based workout classes, has blossomed during the pandemic as people (including this reporter, who is a user) searched for safe exercise options. The company capitalized on that fortuitous timing by meeting customers where they found themselves at the start of the pandemic — quarantined at home trying to establish new routines.
In early September, Peloton announced its first-ever profitable quarter: sales had jumped 172% year-over-year, revenue increased to $607 million and subscriptions more than doubled to about 1.1 million.
But to understand why Peloton is entering an exclusive rank of brands with cult-like status among users (read: Apple and SoulCycle), Business Insider spoke to experts who dissected its high customer satisfaction rates and what they say about the power of knowing your audience.
A survey from consumer research platform CivicScience found that only 2% of 3,298 Americans were Peloton users, but if you ask those 2% how they feel about their Peloton service, they’ll likely ooze praise about the brand. A whopping 69% of Peloton bike users were “very satisfied” with their experience while another 28% were “satisfied,” totaling 97%, according to a survey of several hundred users from the investment firm Wedbush.
What’s more, a majority of Peloton users say the product works — customers report weight loss, an increase in energy, and feeling happier, said Wedbush analyst James Hardiman, who co-authored the survey.
“If you think about all of the stuff you spend money on, not a whole lot of that stuff makes you feel happier,” Hardiman said. “Very few of those things make you feel healthier and Peloton appears to be accomplishing both.”
And Peloton executives say this is just the beginning: They forecast subscriptions will rise another 90% and revenue will nearly double again this fiscal year, according to its most-recent shareholder letter.
Building cult-status through customer satisfaction
One of Peloton’s tactics for boosting customer satisfaction is understanding what its clients like, what they don’t, and what they want to see in the future. Peloton does this by integrating user research into its platform and learning from those metrics, said Andrea Wroble, a senior research analyst covering health and wellness at market research firm Mintel.
For example, Peloton tracks which classes are the most popular, the times of day people work out, what music their users are listening to, and what might be missing from overall experience, Wroble said. “They take that information and continue to optimize their products in a consumer-centric way,” she added. “Peloton does a great job at listening to what customers want and responding in a meaningful way.”
Community is key
Peloton also built a strong sense of community among users, Wroble said. Live classes tap into users’ competitive spirit by comparing stats among participants and pre-recorded sessions that provide a similar experience for individuals who want to take the same class at different times.
Customers can also connect with strangers by high-fiving each other in class or personalize their profile by adding a hashtag such as #BlackLivesMatter. When users …read more
Source:: Business Insider