Peloton’s Masterclass in Brand-Building

Record sales and Peloton just cut marketing to zero — relying on a strong brand to drive word-of-mouth sales

Joshua VanDeBrake
Jun 17 · 5 min read
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Photo by Erlend Ekseth on Unsplash

Record Sales During a Crisis

Starting in mid-March, Peloton paused all advertising in most of its major markets. Meanwhile, revenue skyrocketed 66% year-on-year to $524 million during the period. As global demand for at-home fitness solutions reaches new heights, so too is the revenue of those companies who’ve prepared for it.

Peloton’s years of brand-building seem to be starting to pay off as sales grow organically through word-of-mouth and social media, despite cutting their advertising budget to zero.

But what does this mean for Peloton? How did they achieve this? And most importantly, how can we follow this success? You’ve got questions, I’ve got answers. Let’s ride.


What Does This Mean for Peloton?

Peloton’s largest markets are the US and UK. These markets also make up roughly half of the company’s marketing costs. With plans to keep advertising spend at zero, with continued revenue growth, this means huge cost savings for the company, as well as giving the team a moment to step back and reflect.

However, Peloton will continue supporting brand-building and advertising efforts in its emerging markets that could still have great growth potential.

How Did Peloton Achieve This?

Here’s exactly how they did that:

  • First, by leveraging the latest technology and manufacturing techniques, they created a stationary bike that was head-and-shoulders above the rest. Not only that but by using an iPad-like interface directly on the bike, users could tune into live-streamed or pre-recorded classes, getting the experience of a spin studio without ever leaving their home (a bit ahead of their time but perfectly positioned, I’d say). As far as tangible benefits go, I’d have to say that Peloton’s are pretty convincing. Enough to make it cost several times the next-best comparable product? That’s where the intangible comes in.
  • Second, they took a play out of Steve Jobs’ book — they integrated beautiful design, premium pricing, and the right tone of exclusivity to bring it to market. Peloton became a status symbol. It was the at-home-fitness equivalent of the early days of the iPhone. With a price tag of over $2,000, when other options could be purchased for just a few hundred, buyers weren’t simply buying the bike. If you were buying a Peloton, you were buying the status — the intangible benefit. Not only did you care about your health, but you truly invested in the finest tools.

It was that coupling of benefits that led to Peloton’s strong brand — a combination of tangible, measurable, objective benefits along with the intangible, self-empowering, status-boosting benefits.

How Can We Replicate This Success?

Well, Peloton has demonstrated the value that a strong brand can provide, even in a climate of global uncertainty. But it’s not as simple as posting a few photos on Instagram. It’s about creating a community people are proud to be a part of.

To replicate this, the first step is to take a hard look at our own businesses. We must objectively look at what intangible benefits we offer to our customers. Intangible benefits — things like community, status, and pride of ownership — are what build a strong brand that keeps people coming.

Branding is the intangible benefit that turns into a tangible bottom-line benefit for the company. And looking at the price of a Peloton bike versus the competition, it’s clear that there is a real, tangible value to those intangible benefits.


Final Thoughts

But this success isn’t without its challenges. Peloton has had to make some huge adjustments due to disruptions brought on by the coronavirus — the very thing that is pushing subscriptions to the moon. All of the company’s retail stores have been closed since March, and it has closed its production studios for the time being as well, leading its fitness instructors to stream sessions from their homes.

And despite halting advertising in its key markets, this move is temporary. As Peloton develops new products further down the line, the company will reignite their marketing efforts accordingly.

But for now, Peloton is enjoying the benefits of a long-term brand strategy and setting an example for how to pivot and thrive in an emerging market. One that, hopefully, we can replicate in our own companies as well.

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