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New gadgets always grab attention. But for a brand to be successful in the long run, any cool gadget needs to be backed by an exceptional customer experience. Done right, it creates a cult following.

Home fitness startup Peloton epitomizes how excellent CX drives consumers to buy into a new device. And in this case, it’s not a wearable, it’s a rideable. And a walkable. Its debut product was a $2,000, internet-connected spin bicycle with a 22-inch touch screen, and it just launched a $3,995 treadmill at CES with a 32-inch screen.

So beyond the cache that comes with being an early adopter with money to burn, what’s the appeal to Peloton’s enthusiastic fan base?

“The gadget itself isn’t as important as the service”

Peloton’s loyal customer base can be attributed to following the playbook of successful “cult brands.” The company found a niche and used customer insight to inform its decisions.

According to the New York Times, the fancy fitness equipment maker did almost $400 million in sales in 2017, more than double the previous year. The reason: Peloton has prioritized service over just delivering a shiny piece of hardware for cash-flush fitness freaks.

Driving the popularity of its treadmills and bicycles is a comprehensive online service. When riders turn on the screen, they are connected to live fitness classes inspired by their level of ability and preferences—an experience that other expensive fitness machine makers such as NordicTrack and Bowflex lack.

Peloton users have to pay $39 for this online service, but they subscribe because the company has created compelling on-demand programming that creates a communal and interactive experience.

People are willing to pay premium price for great experiences. Find out the pain points of your customers, and invest in memorable experiences that address those pain points.

Get closer to your customers

The company's price point is definitely higher than most established companies in the fitness equipment market. But why hasn't the company's pricing deterred new customers from buying Peloton gadgets? 

Great customer experience is certainly part of it, but it's not the only thing.

As Peloton SVP Graham Stanton tells The Drum, the price tags of its spin bicycle was based on research, which found “there are tens of millions of Americans who spend more on fitness than the cost of a Peloton bike when averaged over three years.” Insight showed that the Peloton bike is a bargain compared to high-end gyms and fitness studios.

When you're charging a lot for your products, customers expect a lot from them. So naturally the company asks customers for feedback, so it can continuously improve its product and experience. Peloton surveys its members throughout their journey, and looks for trends across its email and social channels. It also makes sure to share those insights company-wide.

Avoid undervaluing your products. Use customer insight to determine the right pricing, but also listen to customer feedback to ensure that your products and services deliver the experiences you promised your consumers.

Be ready to shift gears

Peloton uses customer insight not just to validate pricing and improve products—it also leans on research to evolve its marketing plan. For example, when the company first launched, it lacked a compelling a brand story and focused mainly on a core, affluent audience. But, through research, the company realized it needed to change course. 

One insight convinced decision-makers in the company that the brand needed to get the word out about the convenience of bike and how it could connect riders and create a community around its leaderboard of rider data. In fact, research showed there was broader market it could target: less affluent consumers who will spend a little extra for a convenient way to get fit.

The company initially targeted potential customers in the suburbs, but found there were also opportunities in big cities, in part thanks to the growing popularity of boutique class fitness companies like SoulCycle.

Ultimately, the company believes that regardless of income, age or marital status, those committed to improving their physical fitness will find a way to buy a Peloton bike or treadmill.

Challenge your assumptions about your go-to-market strategy. Use market research to validate and optimize your marketing strategy.

Great gadgets need great CX

The shine on any new gadget fades quickly. Peloton is the latest reminder that great products alone don’t build a big following. It’s the experience that accompanies them, and that’s something you can only provide if you know the attitudes and motivations of your customers.

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Kelvin Claveria

Kelvin Claveria was the former Content Marketing Manager and was responsible for Vision Critical's blog and social media marketing program. Before joining Vision Critical's global marketing team, Kelvin worked at Dunn PR, a Vancouver-based public relations firm. His experience includes working with lifestyle, real estate, and non-profit clients to develop social media marketing and PR strategies. Kelvin has a Bachelor of Business Administration from SFU's Beedie School of Business.
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