How psychology perfected the PELOTON experience

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Hi there - Jen here :)

Fitness brand Peloton might be going through a rough patch at the moment, but they still have a cult following of people who LOVE their spin bikes, treadmills, and apps.

Despite their recent setbacks, things are looking up for everyone’s favorite lockdown workout:

They recently announced a partnership with the world’s 3rd largest retailer, Costco, to stock their products as they slowly make their way back toward positive growth:

Peloton aren’t a comeback story just yet, and hundreds of thousands of devoted fans who still love the brand are holding their breath, hoping their favorite way to exercise doesn’t disappear (myself included).

🧠 Today we’re talking about why Peloton’s fans love it so much, and the psychology behind the "addicted" feeling many users describe.

You’ll learn:

• How the Halo Effect, Sunk Cost Fallacy, and the Mere Exposure Effect eliminates risk and makes the product easier to buy and try.

• Why the Goal Gradient Effect, Streaks, and Gamification keep people working out (and gets them to come back and do it again).

• How you can create product habits with principles like these that keep customers coming back for more 

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How the Halo Effect, Sunk Cost Fallacy, and the Mere Exposure Effect eliminates risk and makes the product easier to buy and try 

Buying a new piece of fitness equipment is always a risk - they’re big, expensive, and if you don’t use them you end up with and embarrassing and pricey laundry rack:

1. The Halo Effect

One way Peloton de-risks itself in the minds of buyers, is through celebrities sharing their experiences using the bike and tread.

Because celebrities like Hugh Jackman, Leonardo DiCaprio, and Michael Phelps have professed love for Peloton, they create a Halo Effect around the product itself. ⁠⁠

The risk of trying a Peloton is lower because people we “know” and like have vouched for it.

Why? It’s down to the Halo Effect.

✅ This describes our tendency to let one positive trait guide our overall opinion of a person or product. In this case, the Halo Effect of the celebrities and sports figures rubs off on the Peloton brand.

2. Sunk Cost Fallacy

Peloton bikes and treadmills are expensive - there’s no way around that. But the cost of a Peloton - $2000+ plus a monthly subscription - is part of the reason why people actually use it. ⁠

Why? It’s down to the Sunk Cost Fallacy:

✅ This says people are more likely to start or continue an activity if they’ve made an investment - in time or in money.

3. Mere Exposure Effect (Familiarity Bias)

A Peloton bike or tread’s sleek design and small size means users can display it in prominent areas of their homes. That creates a perfect stage for the Mere Exposure Effect to take hold.

✅ The Mere Exposure Effect (also called Familiarity Bias) says that the more people see a product or brand, the more affinity they’ll have for it.

And in Peloton’s case —  the more you see the bike parked in your living room or bedroom, the more likely you are to use it.

Why the Goal Gradient Effect, Streaks, and Gamification keep people working out (and gets them to come back and do it again).

Getting people to buy a Peloton bike or tread is difficult, but getting them to stick with using it month after month is even harder. Here are a few ways Peloton do it (and why their customer retention rate is an impressive 92%)

1. ✅ Peloton Pairs Psychological and Physical “Rewards”

To create a habit, people need to feel rewarded. That’s why Peloton users earn output points, achievements, and can rank on leaderboards - it’s what drives that “addicted” feeling users talk about. ⁠

2. ✅ Streaks

Peloton streaks keep track of how many weeks in a row you’ve completed a workout.

Each time you login to your Peloton to kick off a workout, you’re reminded of the length of your streak so far, and motivates you to keep exercising so you don’t break your streak.

Duolingo - the language learning app - did some experimentation and found that including streak challenges increased their daily active users (DAU) by 3% and in-app purchase revenue by 600%.⁠

3. ✅ Doubling Down on Gamification

In Peloton's Lanebreak mode, Gamification completely takes over the experience.

Instead of biking along with a group class and a human instructor, users earn points and a final score by following the game-like prompts. This mode is perfect for riders who need a change of pace to stay motivated.

How you can create product habits with principles like these that keep customers coming back for more

Peloton knows to keep customers coming back, it has to create habits through its marketing and user experience (research even says that customers just “forgetting to use” a product is why most new products fail).

If you want to create an ethically habit-forming product, start by asking yourself:

• Do we include triggers to use in our product in our marketing comms or user experience? For example, this email from dog supplement brand YuMove is a great example of reminding people to give the product to their dogs.

• How much thought are we putting into making the product experience engaging? Have we considered how tactics like gamification and principles like the Goal Gradient Effect could help keep people engaged? Language learning app Duolingo are masters of this.

• Is our product or user experience rewarding? Not just in the physical sense (for example, Peloton rewards you with a fitter body), but in the psychological sense too?

Until next time,
Jen