How Peloton Uses Data to Get Customers

SEO Strategy, First Party Data, Leveraging Content for Acquisition

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Today, I’m unpacking Peloton’s growth marketing strategy. A masterclass in executing beautiful content with a clear purpose, showing how to position a DTC brand to attract customers. After diving into their strategy, it’s clear that their overarching focus is on personalisation. So, today, you’ll gain insights into their personalisation strategy that breaks out into wider growth marketing concepts and examples.

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In today’s edition, I’ll be covering:

  • Collecting and activating first-party data

  • Unlocking opportunity through dynamic ads for growth & retention

  • Role of content in their acquisition strategy

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FEATURE CASE STUDY
Peloton

Peloton, founded in 2012 by John Foley, has redefined at-home fitness with its connected equipment and digital content. Their DTC model disrupted traditional gyms by bringing high-quality, interactive workouts to home users. Peloton's growth soared during the COVID-19 pandemic, with a 172% sales boost in Q4 2020. Their strategy of pairing premium hardware (bikes and treadmills) with a subscription-based content model paid off, hitting $1.8 billion in revenue in 2020. Despite facing product recalls and market saturation, Peloton's smart marketing, stellar user experience, and relentless innovation keep them at the forefront of connected fitness.

THE STRATEGY
Focus on Personalisation

Personalisation is now more critical than ever for DTC brands. It’s the only way that brands can stand out and build a loyal consumer base that keeps coming back for more.

Peloton’s digital strategy is built around the idea of personalised experiences for its customers. They are selling a tough product. It’s expensive, lacks physical experience and is difficult to showcase its subscription model's long-term value.

However, Peloton found success by focusing on their customers' needs. To attract online customers, they used two main ideas:

  1. Feedback Loops: Asking for feedback after each workout.

  2. Workout History/ First-Party Data: Collecting a range of data at different points

THE PLAYBOOK
Three Tactics That Helped

1. Collecting and Activating the First Party Data

Peloton is a technology company, and for them, their first-party data is a core part of their growth and retention marketing strategy. Here are the different data sets they collect:

  • User activity → detailed data on user activities such as workout, frequency, duration and types of exercises and performance metrics like heart rate, resistance levels and cadence.

  • Profile information → this is where they get more insight into their target customers; they collect information like age, gender, location and fitness goals.

  • Engagement → how much someone engages with their content, classes they take, favoured instructors and social features they use.

  • Purchase history → Equipment and subscription details that are tailored to upsell and cross-sell.

  • Website interaction → They use a customer data platform that streamlines pixel data across multiple platforms and their website.

  • Biometric → Heartrate and performance metrics, allowing them to provide personalised workout recommendations.

They use the collected data to test specific tactics like upsells and cross-sells but it’s used holistically across the entire brand and marketing funnel, some examples include:

  • Personalised marketing campaigns: sending targeted emails with workout recommendations based on the user’s past activities and preferences.

  • Content personalisation helps them recommend specific classes or instructors based on the user’s workout history.

  • Community building is a core pillar of their digital strategy. They’ve used data to create features that foster a sense of community like leaderboards and social integration capabilities.

  • Retention works alongside growth. They use this to identify at-risk customers. If a user’s activity drops, Peloton will go on the offence by sending personalised re-engagement emails or offering incentives to encourage them to return.

  • Inform paid social campaigns to run efficient campaigns on channels like Facebook and Instagram.

Key takeaway:
Use first-party to update your ideal customer profiles and to inform your current ad campaigns. The goal is to be as relevant as possible and strategically use offers to entice the right people.

2. Leveraging Real-Time Optimisation via Dynamic Ads

By activating rich first-party data across multiple advertising channels, Peloton can leverage dynamic ads to bring personalisation into their digital ads.

Dynamic ads help Peloton serve personalised ads based on real-time user behaviour and preferences.

At the top of the funnel, their goal is to relate and stay relevant. Here’s how they do it:

  • Personalised ad creatives → Using dynamic creatives helps them automatically generate multiple versions of an ad, tailored to different audience segments.

  • Interest-based appeal → Target specific users based on what they consume on social media. For example, users who frequently engage with fitness-related content will see Peloton ads featuring new offers that are tailored to their interests.

  • Remarketing to non-converters → A new customer might see remarketing ads for Peloton’s latest offers or first-time discounts if they previously checked out their website but didn’t convert across all of their social feeds.

To increase the lifetime value of their existing customers, they use retargeting campaigns to upsell and cross-sell. Here’s what they do:

  • Promote other products → Run retargeting campaigns showing personalised ads that promote complementary products or higher-tier memberships.

  • Product recommendations → Based on past purchases and activity, they personalise product recommendations through dynamic ads.

  • Push notifications → Trigger personalised messages based on user behaviour and preferences. Say someone completes a series of cycling classes, they might get pinged with a notification encouraging them to try Peloton’s yoga or meditation classes.

Key takeaway:

New customers → Your ads should speak to their pain points or interests. If you can attach an offer within your ads, this typically drives up engagement and conversions.

Existing customers → They’ve already bought from you. It’s a matter of showing them that your brand understands them. Stay top of mind through remarketing ads and recommend products that make sense for them to buy based on their past purchase behaviour. If done right, this is a cost-efficient way to increase your profit margin and extend CLTV.

3. Increasing Customer Acquisition via Content & SEO

Solely relying on paid media to acquire new customers can be expensive and unsustainable. Content marketing helps offset costs and makes customer acquisition sustainable. Peloton’s content strategy revolves around growing its community, providing diverse content formats and education.

Community

  • Encourage users to share their workout experiences on their socials using branded hashtags. It’s authentic and trustworthy. Peloton frequently features user posts and success stories on their official social media channels. Seeing real people achieve their fitness goals with Peloton can be highly motivating for potential customers.

  • Interactive features like leaderboards, challenges and badges have gamified the workout experience for Peloton users. It makes it more interesting, competitive and appealing. A smart strategy that not only keeps existing users engaged but attracts customers who enjoy social workout environments.

Diverse Content Formats

  • Live on-demand classes are appealing and designed to cater to different fitness levels and preferences. Through their app, Peloton can provide thousands of classes something that can be attractive for new potential customers looking for flexible fitness solutions, especially busy professionals.

Educational content to support SEO

Through their blog and social pages, they provide valuable fitness tips, hacks and educational content that solves a specific problem for their customers.

  • The blog (called ‘the output’) generates 13.9m monthly organic traffic and looks like a well-oiled SEO machine. Their educational content covers a diverse range of topics including, workout tips, healthy recipes, motivational messages and general fitness advice.

  • Content structure and readability also help with SEO. They keep it simple, using clear headings, short paragraphs and bullet points to keep prospects and existing customers coming back for more.

Key takeaway:
By focusing on keyword optimization, creating in-depth content, and ensuring a well-structured format, Peloton’s blog attracts organic traffic and educates potential customers effectively. Plus, you can easily re-purpose long form content into bite size pieces for channels like Instagram and TikTok.

DIGITAL TOOLS
Peloton’s Tech Stack

  • CMS - Contentful

  • A/B Testing - Optimizely

  • Live Chat - Drift

  • Affiliate Program - Impact

  • Analytics - Amplitude, AppsFlyer, Google Analytics, Datadog

That’s all for today, thanks for tuning in!

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