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In Peloton's brand strategy, value in old-school advertising

The buzzed-about exercise company is using old-school marketing to expand beyond a niche customer base.

By Kathryn O’Neill  |  November 30, 2017

peloton

Carly Chase, managing director of MIT New York City Startup Studio, and Carolyn Tisch Blodgett, senior vice president of brand marketing at Peloton.

Why It Matters

Brand strategies are not one-size-fits-all. At fitness startup Peloton, a quest to expand the customer base is steering the company to traditional advertising.

One of the fastest-growing companies in New York City is targeting new customers using old-school advertising, with marketing focused on TV, radio, and even billboards. 

Peloton, which makes a high-end exercise bike that livestreams indoor cycling classes, wants to step beyond its niche first customers — affluent suburban women. That sort of brand recognition doesn’t come from Facebook ads alone, according to Carolyn Tisch Blodgett, the company’s senior vice president of brand marketing.

As the company tries to reach a broader audience, it has invested in offline channels in addition to its initial focus on digital advertising, Blodgett told students in a Nov. 28 talk at the Martin Trust Center for MIT Entrepreneurship. “For us, we’ve seen by 2017 that every company is buying on Facebook, so it’s become more expensive and less effective.”

Doing TV commercials, radio spots, and direct mail campaigns is important because Peloton is still establishing its brand, Blodgett said. “We track awareness and our awareness is still pretty low,” she said. “So we have a product education story to tell.”

Part of that effort includes opening brick-and-mortar showrooms where customers can try the bike for themselves. The company has 29 showrooms with more on the way next year. “Trying the bike is a really important part of the purchase journey,” Blodgett said.

The company is advertising on billboards in an effort to drive customers to the showrooms, but digital advertising remains in the mix. Peloton’s first funding came from a Kickstarter campaign. And before Blodgett came onboard the bulk of Peloton’s media buying was on Facebook.

Blodgett said advertising on Facebook is only part of the strategy for Peloton to use to expand its customer base beyond its initial devotees.

Revenues for Peloton grew from less than $2,000 in 2013 to $137.5 million in 2016, according to Crain’s New York. That put it on top of the Crain’s Fast 50 list. The company is vertically integrated: Employees design the hardware, the software, teach the classes, and even deliver the bikes, Blodgett said.

Founded in 2012 to enable fitness enthusiasts to replicate the boutique studio experience at home, Peloton has found a loyal fan base: Existing customers drove much of the company’s growth through word-of-mouth, Blodgett said.

To spread the brand name further this holiday season Peloton rolled out a new TV spot that Blodgett thinks reflects the passion behind the company. “We spend a lot of time showing the product, but my favorite part is the scene where the daughter is riding a tricycle and looks up at mom on the bike.” The look conveys that the mother is working hard to become a better version of herself, Blodgett said. “That’s an emotional side of the product, and we’ve never really told that story before.”

Peloton is now trying to appeal to a broader range of people, building a community of those for whom fitness is a core value — making it worth their while to find the space and budget for high end fitness equipment (The Peloton bike costs $1,995 plus a $39 per month subscription fee for classes). “We’re always testing new media channels,” Blodgett said. 

Blodgett’s talk was co-sponsored by the MIT Sports Lab and the Martin Trust Center for MIT Entrepreneurship.