Peloton CEO talks ‘insane value,’ marketing challenges—but not that controversial ad
Speaking at the UBS annual tech and media conference Monday morning, John Foley, CEO and co-founder of Peloton, addressed many things, like growth opportunities, profitability and the brand’s value proposition for consumers. He did not, however, speak about one of the most widely-discussed commercials of the year, Peloton’s “The Gift that Gives Back,” which was mocked so much last week that the actress in the spot secured herself a role in another brand’s commercial.
Instead, Foley spoke about how to get consumers to try, and fall in love with, the 7-year-old fitness brand. Peloton has been building up its digital streaming offerings as well as its products, which now include a treadmill as well as the stationary bike that launched the brand. The challenge as a marketer, Foley says, is convincing shoppers that Peloton is actually an affordable and value-laden brand.
“They see sticker shock, it seems very expensive,” he said. “The opportunity for us is to really connect the dots,” he added, noting that with financing, the bikes can be purchased with monthly payments of just over $50. “It’s an insane value,” Foley said. “We’re changing lives, allowing people to get more fit, more healthy, more endorphins…be better versions of themselves and all this existential stuff, but we need to communicate that better.”
Jill Woodword, Peloton’s chief financial officer who was also speaking at the conference, noted that “the two biggest barriers to purchase are price and the question of will I use it.” She said that Peloton recently introduced the $58 monthly cost into its advertising to try to court consumers balking at the high price of bikes. They typically retail for around $2,000 but there are financing options available. Woodword said that in fiscal 2019, nearly 20 percent of the bikes Peloton sold were to people who make less than $75,000 in annual household income.
Woodword noted that there is more Peloton can do to continue to pound the table on the “value proposition.”
Unlike last year’s holiday ad, in which a man and his wife both take turns secretly using a Peloton bike—a double use Foley notes enhances the value of the product—this year’s spot merely focused on one already-trim woman’s year-long journey of using the bike, which her husband had given her as a gift. Both spots were created by Mekanism. The new spot, which one expert called a “male fantasy ad,” was parodied on Saturday Night Live and Funny or Die. In addition, Aviation Gin, the liquor brand backed by actor Ryan Reynolds, tapped the actress, Monica Ruiz, to star in an ad on Friday. In that commercial, Ruiz toasts to “new beginnings.”
Hear from more fitness brands at Ad Age Next: Health and Wellness, a conference taking place Feb. 6 in New York City. Buy your tickets here.