Part 3: Peloton’s Move to Monetization

In this Peloton series, we’ve covered everything from onboarding to user experience, the quality of the classes, and features we would want Peloton to include to their app. While Peloton created an amazing user experience that kept me highly engaged, the goal of any freemium model is to convert trial users to paying customers. A task that is easier said than done.

This series began when I saw a promotion for Peloton’s 90-day free trial. Prior to this promotion, Peloton was offering 30-day free trials. The extension to 90 days began last year in March, which was a great reaction to the start of lockdown. When I started my trial, I was required to give my credit card information to activate the trial, but they made it clear that they will notify you 1 week before the trial expires that you will be charged. They also allow you to immediately stop any future payment without ending the trial.

Retaining Users

An important part of retaining users is by creating engaging content, something that Peloton’s app has already done. In addition to creating quality content, it’s important to track what actions lead to users keeping their subscription after their trial period is over. Peloton should track and guide users to features that are indicators of engagement. This could include experiments on driving users to features that encourage more use of the app. They also should surface which features drive new subscriptions and ultimately higher engagement. Here’s an example of how they could create this experiment:

• Hypothesis: If a user participates in a workout program or challenge, this behavior is an indicator of a highly converted user behavior, and future experiments can be geared towards this. Getting users to participate in programs and challenges will lead to higher conversion to paid subscriptions.
• Experiment: Prompt users early on or on different screens to join a challenge or program.

Feature recommendation: In order to ensure customers take advantage of all the features on the app, Peloton could create a tutorial highlighting the main features of the app that lead to conversion. Alternatively, part way through the free trial, they could add in a feature which shows users what parts of the app they haven’t explored yet. This could be beneficial if a user has not taken a key action which historically leads to higher engagement.

Prior to the free-trial ending, Peloton should re-engage with users who have not accessed the app regularly to remind them to take advantage of the free workouts before their trials ends. I noticed that they already try to engage power users who may have taken a break from the app. One day I skipped a workout and received a notification that I was close to unlocking a workout achievement as a reminder for me to re-engage. I’ve also received notifications to try classes I haven’t accessed yet.

Alternatively, they could emphasize what power users would miss out on if their free-trial were to end. This would be a great opportunity for Peloton to remind users of what features they’ll be missing out on if their subscription is canceled. People respond more to lose than gain, so by emphasizing what they’ll lose by not remaining as a member, it could further incentivize people to keep their membership.

Segmenting Users

A great way to create personalized and relevant messaging is by segmenting users. When a users free trial comes to an end Peloton could send segmented emails based on a users activity. This could encourage non-active users to take advantage of the rest of their free trial, or remind power users of what they’ll lose. In addition, they could offer a discount, coupon code, or free-trial extension to non-active users as a way to re-engage them. Power users would not receive the same promotions as they’ve already indicated intent and see the value in the app since they use it so frequently.

Other Methods of Monetization

Another route Peloton could take to make money off their app is to include paid add-ons. An example of this could be customized workout playlists. In my last post, I mentioned that if I could have any feature on the Peloton app it would be to have custom workout playlists made for me based on my fitness goals. My previous post also mentioned several other features I would like to see which could be opportunities for Peloton to include them as premium add-on features. This could be helpful in monetizing off of people who may not convert to a subscription, or to have these features as incentives to subscribe. 

Experiment Recommendation: Peloton could test if offering additional features as paid add-ons or promoting them as features for paid members is more effective.

Conclusion

When creating an app, everything from onboarding, user experience and engagement have a role to play in monetization. I believe that Peloton had a great user experience and from my use of the app, I can tell they have a large group of power users. When ensuring users have an optimal experience which drives conversion, testing and experimentation is more important than ever. With Taplytics, you can run code-free experiments, send personalized emails, and send customized push notifications to users to ensure they’re taking actions which lead to your goal of monetization.

Viresh Rustagi, Peloton’s SVP of Product Software Engineering said, “because 2020 brought about a heightened interest in at-home workouts, in 2021, Peloton, an exercise equipment and media company, is focusing on creating more innovative ways for members to workout and connect with one another”. I’m looking forward to seeing how Peloton continues to improve its app and find new ways to engage users.

Check out our TikTok of features we wish the Peloton app had. If there’s another app you’d like to see a review of let us know!