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Reaching Your Power Zone In Pricing: The Success Of Peloton

Israel Rodrigo January 26, 2021

Last year, around this time, I gifted my wife a Peloton bike. A good friend of mine had been raving about it for quite a while but I was skeptical since he’s the type of guy that would religiously get up at 3:30 a.m. every day to work out for 60 minutes since immemorial times. Since I was running out of time, I figured that although this pricey piece of equipment didn’t seem worth it, I decided to be a good husband and forked the money.

Nobody is a stranger to workout programs. This blog from my colleague Jamie Kreppein on his journey to losing weight made me think about what makes some of them so sticky and successful. They all share the same basics: setting a realistic goal, executing the plan towards achieving those goals, measuring, adjust and repeat in order to ultimately reap the benefits of a well thought & executed plan. If they all intrinsically agree on the WHAT, it might be that the key to their success has to lay on the HOW and WHY.

As I started interweaving my “work from home” job with my “workout from home” program, I couldn’t help but draw some parallelisms between the key to successful organizational transformation initiatives and effective workout discipline. For both, achieving the expected results is a balancing act involving many facets. For example, challenging the status quo versus tackling process redesign.

Executing the plan with the enabling support of technology and managing change is an appealing and necessary framework. All by taking small and incremental steps that will fuel success, ensuring adoption while enforcing accountability.

For me, this is one of the key catalysts, and one of the reasons why an offering like Peloton has climbed successfully and disrupted a very matured market in such a way by connecting the user experience to the customer need. It has effectively combined the three key critical (Process, Platform, and People) ingredients for successful transformations.

Rethinking the Process: How Do You Change to Get Better?

One of the earliest pivotal mindset shifts I went through in my Peloton journey was that early on, I realized that I wasn’t only investing in a piece of equipment, but committing to a membership/subscription targeting changing habits by achieving measurable outcomes.

When on a bike, there are only two levers to delivering a sustainable output; combining cadence with resistance. They are both equally important to qualify the quality (significance) of a workout but if we are thinking about end goals, sustaining the outcomes is a different story.

So why is this different? In theory, exercising by sitting on a stationary bicycle for 45-60min pedaling harder or faster sounds less than motivating to me in the long run so, what is Peloton’s secret sauce? It’s a fully immersive, tailored experience where the user is in control and empowered to make changes. Going in, you know that fortitude and commitment are the currency for joining any class. It’s the sense of transparency, accountability, and belonging to the playfield what makes it fun and enjoyable.

A similar analogy can be made to the business environment in that agility, fairness, and transparency are the rules of the game in any commercial setting. Resistance is the fortitude needed to sustain and execute according to the plan and cadence the speed at which to react and adjust to changing conditions while delivering to the plan. If you are either a pricer or a seller, the key is to be fully immersed in the design, execution and measurement of the results that fit that framework.

So how can you change the process and transform to be better? By trusting the experts while taking ownership and control of the task at hand. Pricing fortitude can only be gained if the execution is ultimately aligned with objectives than obey a broader plan but can be deconstructed and achieved through small tasks keeping deliverables at a reasonable velocity. For that, results need to be measurable so the user is accountable.

In the case of Peloton, a vast array of classes are completely tailored to user needs. Some classes are around technique, others around endurance, speed, but in all of them, there’s a public benchmark (leaderboard) that shows what optimal, average, and low outcomes look like (the market). It’s up to the user to decide, select and measure themselves against that benchmark.

Similar to where you are in your pricing maturity journey, there has to be a holistic and contemporary approach to delivering outcomes, different classes apply to different circumstances, the technology and the process doesn’t change, just the execution.

Reinventing the Platform. How Do We Measure and Show Tangible Results?

The convenience of working out from your basement in an online yet private setting has reduced the fear of public embarrassment for low performance which in turn has appealed to the masses. This non-intrusive, non-shaming platform has demystified what endurance and discipline looks like for the average consumer and brought within reach healthy and sustainable habits

These primary motivators have been hugely critical to mobilizing the users to adopt the technology. But I think it has been the technology paired with the coaches’ expertise that has provided an overall unprecedented customer experience and brand following. You still need to work hard to deliver but the toughness required by the coaches to perform in any class, always appeals to a deeper layer of motivation from the user such as self-assurance, well-being, adopting, and embracing change from within. This leads to a strong sense of community, belonging, and trust in the process.

Being able to bring all these elements together at the time of delivering outcomes is the perfect example of how not only technology, but also how developing a strong sense of partnership with experts, can help organizations that trust the process to make the best decisions one at a time, over and over.

Technology alone is just a piece of the equation. You can define the strategy and execute on it, and technology can allow you to measure outcomes almost instantaneously. This removes questioning or second-guessing; it’s clear how much you are able to deliver by combining the different levers your organization possesses. At the same time, you can compare yourself against various benchmarks that give you a realistic point of view on whether or not your effort achieves the expected outcome.

But without a coach that can anticipate pitfalls or hardships ahead, those outcomes can be short-lived. It’s only when you’re in full control, trusting the process, paired with the enabling technology and with an expert partner by your side when you’ll be truly able to transform and deliver over the long term.

Leading People and Managing Change: How Do We Make This Stick & Keep Evolving?

Very simply put, I think the only way you can improve is if you can measure what success and progress look like.

A few years back, during my last visit for my annual checkup, my doctor put things in such a way that his perspective really made me think about healthy habits differently. “Before 40, we think about our health like spending money on a credit card. You think, don’t worry about it, treat yourself now, since you will pay later, but as you hit midlife and gray hairs are not the exception, you can’t any longer live on credit but starting paying cash. Everything you do now, counts and affects the bottom line”

As a numbers guy, this pragmatic, matter-of-fact, quantifiable way of measuring health really stuck with me. In order to deliver and improve, you need to have a benchmark, where you can measure how good or bad you are doing, have some guidance that is contextual about what is appropriate but also different options and levers to adjust to the changing environment. 

This is exactly what commercial excellence is at its best. Sales organizations recognize the constant need to change and innovate. But they often overlook how important is to provide guidance in full transparency about what success and good practices look like. Designing new go-to-customer models, engagement programs, processes, and management programs is difficult and time-consuming.

But without visibility or accountability on achievements, too often the results of these programs fall short, even with the best design. If the sales force refuses to change their behavior, the introduction of new practices can lead to confusion and mixed results. It is not enough just to “manage change” through these phases. It is imperative to “adopt change.”

A Partner in Change Can Help You Find the Way

Fear, tiredness, excitement, pain, inability to change, and lack of motivation are all legit feelings prior to tackle big efforts. Prospects and customer approach their commercial excellence journey differently but in my experience, I would say that in most cases they overestimate the reliance on technology and underestimate the value of a coaching partner to help them through the change in process and people.

Change adoption is critical for maximizing the impact new initiatives can have on supporting strategic objectives, motivating the sales force and encouraging differentiated results. Rolling out a new program and ensuring adoption are two different things.

So, as you evaluate and launch your 2021 initiatives, keep in mind that while technology can help you to adjust in the uphill or downhill, fast or slow, being able to know objectively where you are, and having a trustworthy coach that can guide you on how you are doing will allow you, through sweat, resiliency, and determination, to reach your end goal in better shape than where you started.

See you on the road…