Peloton Has a Marketing Problem

A cultish vibe and a tin-eared ad campaign have landed the home fitness unicorn in hot water

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Dec 13, 2019
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Peloton Interactive Inc. (

PTON, Financial) has risen rapidly to the forefront of lifestyle brands thanks to its uniquely interactive digital offerings that serve to both empower and differentiate it from other sellers of home exercise equipment.

An intense focus on image and branding has helped Peloton win a deeply committed following, especially among least well-to-do consumers. Unfortunately, while Peloton’s original marketing has inspired nigh-religious fervor in its core membership, it has proven off-putting to many others.

Don’t call us a cult

As a company, Peloton is deeply aware of the importance of branding to its future; after all, without a differentiated brand, a Peloton bike is little more than an expensive stationary bicycle with an attached iPad screen. Even more importantly, Peloton is aware that its marketing needs to achieve widespread appeal in order to continue its record of rapid growth. Peloton’s keen awareness of this is reflected in a number of branding principles.

On Dec. 4, Patrick Coffee, Business Insider’s advertising correspondent, published a number of leaked internal marketing documents that cast Peloton in a rather unusual – and, to some, unflattering – light. One such document, titled “Who We Are/Who We Are Not,” highlights a number of words that should be used to describe Peloton’s brand, as well as many that should be avoided:

  • We Are: Motivating, Modern, Premium, Authentic, Enthusiastic, Captivating, Confident, Inclusive, Street-wise, Empowering, Optimistic, Community.
  • We Are Not: Preachy, A Fad, Exclusive, Sterile, Over-the-Top, Goofy, Aggressive, Cultish, Snobby, Religion, Satisfied, Cheap, A Fitness Brand.

It is quite interesting that, among the 13 words explicitly rejected in Peloton’s marketing documents, three deal directly with a sense of religiosity: “Religion,” “cultish” and “preachy.” This was no coincidence. For years, Peloton executives and employees demonstrated a propensity to refer to the company in quasi-religious terms. For example, in 2017, founder and CEO John Foley equated Peloton and Soulcycle to organized religion. This Peloton-as-religion attitude permeated out to much of the company’s core membership.

Peloton’s reputation for being discomfitingly cultish has become a real problem as the company tries to grow its membership exponentially. Peloton needs to expand its appeal if it hopes to achieve the eventual membership numbers implied by its unicorn valuation, so jettisoning the still-widespread perception of it as an insular clique is a critical corporate objective.

Going viral (but not in the good way)

To paraphrase Robert Burns, the best laid plans can often go awry. Peloton was reminded of that lesson last week when it released an ill-fated new digital and television ad, “The Gift of Peloton.”

In the ad, a young woman makes her husband a video diary of her Peloton workouts “as a thank-you for giving her the thoughtful gift of exercise.” As Digg observed on Dec. 2, the ad was so bizarre as to be virtually incomprehensible:

“We have so many questions here: why is the woman in the commercial so nervous about getting on a Peloton bike in the first place? And why oh why did the commercial have her film video clips of herself exercising and then make the creative decision of having her and her family watch those clips… on TV? We're very confused here, but don't get us wrong, we're also thoroughly enthralled by the sheer incomprehensibility of it all.”

The confusing ad caused widespread head-scratching among media, while spawning a litany of memes and parodies relentlessly mocking Peloton’s rarefied public image. As last week’s Business Insider Prime newsletter reflected, this latest mess is proof that Peloton’s marketing department still has a lot more work to do:

“Peloton's internal marketing vision was supposed to avoid this kind of fiasco...Perhaps words like ‘empowering’ and ‘modern’ mean different things to different people. Wall Streets seemed pretty clear though: Shares of Peloton plunged 15% amid the PR crisis.”

Peloton seems to be fully aware of the weaknesses in its branding and marketing, yet that awareness still failed to prevent a profoundly embarrassing public relations episode.

Verdict

Peloton may best be thought of as Silicon Valley’s answer to the home exercise industry and, like so many such “disruptive” startups, it has risen to unicorn-status in expectation of its eventual acquisition of massive market share (and hopefully profitability). As I discussed in a previous article, Peloton’s “grow at all costs” business model is likely not sustainable. However, none of these issues will even matter if the company cannot get its marketing straight.

Disclosure: No positions.

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