Joe Bertolami
- Jun 10, 2021
- 20 min read

Peloton Crisis Communication Plan

Updated: Dec 9, 2021

Organizational Analysis

Peloton Interactive, Inc. is a fitness company that uses technology to connect its consumers to classes all over the world. A relatively young company, Peloton was founded in 2012 by John Foley, who currently serves as CEO. The idea of creating Peloton came to Foley when he realized his self-directed workouts were not as productive or rewarding as a fitness class being led by an instructor. However, an issue with in-person spin classes, in particular, was that there are a set number of bikes, so it is first-come, first-serve. Foley loved cycling, but for these reasons, as well as not being able to fit it into his busy schedule, he was not able to partake in these classes as much as he would have liked (“The Peloton Story,” 2021). Foley’s idea was to bring fitness classes to homes, with the same benefits of an in-person class. This vision came to fruition, by designing bikes that had tablets attached to them, so consumers could follow along with spinning and various other fitness classes while at home.

Despite being a young company, the organization is making waves in the world of fitness and media, with on-demand fitness classes that have grown more popular each year. Peloton is considered by many to be “The Netflix of fitness”, as stationary bikes and treadmills come with an attached screen where workouts are streamed and uploaded for everyone to watch and participate in (Stevenson, 2017). The company’s business model is based on three streams of income, which are the bikes and fitness products themselves, apparel, as well as subscription revenue that users pay for the streamed classes. Workouts can be sorted by instructor, music genre, length, and much more. As of now, Peloton bikes are able to be purchased in the United States, United Kingdom, Germany, and parts of Canada. 2021 also saw the company make it public that they plan on expanding to Australia later this year (“News Release, 2021).

Peloton’s main headquarters and studio are in New York City. The organization currently has over 4.4 million members on the platform and saw its stock price increase over 250% in the year 2020. As of May 4th, 2021, their stock price is at $96.70, decreasing substantially from 2020 highs, but still far greater than its original IPO price of $25. While many companies struggled during the coronavirus pandemic, Peloton has seen just the opposite effect. With gyms closing as a result of the pandemic, Peloton saw a surge in demand, as people wanted to stay healthy while being stuck at home. The company’s first-quarter sales more than tripled in 2020, totaling close to $1 billion. While the current and future success of Peloton does look promising, this was not always the case. When the company went public back in 2019, many investors felt the company’s valuation of $7.6 billion was overpriced (Trainer, 2019). This was due to the company’s lack of progress towards profitability and declining true cash flows from 2018 to 2019. The questions of profitability raised some real questions, but Peloton has shattered expectations since going public, both in their earnings and stock price.

Despite being a true disruptor and innovator in the world of fitness, Peloton has gone through its share of PR crises as well. The company underwent harsh criticism for an advertisement in December of 2020. The advertisement was criticized both in traditional and social media platforms, as it was mocked as being sexist and out of touch (Ortiz, 2019). One thing that stands out to me in Peloton’s advertisements is how it typically consists of very healthy and active people. While I think being healthy and active are very important aspects of life, it could intimate those who are looking to lose weight and who might not be in the best shape just yet. I think this is something that could hinder Peloton going forward, as they look to grow their user base. The Christmas ad crisis had major implications on the value of the company, as Peloton’s stock price dropped a whopping 9 percent in one day following the holiday ad (Gross, 2019). It became a meme on social media, late-night talk shows, and was a buzzing topic of conversation around that time. The company continues to advertise, so this could be a “potential crisis” that comes up again. Another recent crisis was one related to safety, as a child passed away in a tragic accident involving a Peloton treadmill. There have also been 39 recorded incidents involving the treadmill, showing a safety concern with the product (Pisani, 2021). There are many other potential crises the company could face, as it is such a complex business with many moving parts. However, the crisis I decided to focus on is the issue of safety that is very relevant currently. In particular, I am looking at a situation where a Peloton member injured their Achilles on a bike, as their shoe became unclipped during an intense sprinting portion of a ride. This is something that could definitely happen in the real world at Peloton, as many members will purchase specific “Peloton shoes” to clip into their bikes for a ride. While not required, it is a popular footwear choice for cycling workouts. I will explain this further in detail during the “potential crisis” section of this plan.

Going forward, It will be very interesting to see how Peloton adapts and continues to innovate. They are on the cutting edge of boutique fitness and have not even been around for a decade. As they continue to grow, it is integral that the company maintains a strong culture built around togetherness and positivity. Culture is something that can be difficult for a company to maintain as they grow and scale, which has been seen over the course of history. With massive companies and brands like Amazon and Goldman Sachs being under harsh scrutiny lately due to working conditions for workers, it shows that bigger is not always better from a cultural standpoint. Peloton will continue to grow, as they are now an employer of 3,281 people. This 2020 statistic shows an increase from 1,800 employees in 2019, and the company is continuing this upward trend (Salchert, 2020). I am looking forward to diving deeper into the company in the coming weeks for this project.

Peloton SWOT Analysis:

A SWOT analysis of an organization is integral to assessing what the company does well, but also how it can improve and get better. This SWOT analysis consists of four main points for each section (Strengths, Weaknesses, Opportunities, Threats).

Strengths:

Peloton has many strengths as an organization that has set them up as a successful company in the health and fitness industry. For starters, the company has a great reputation with a large majority of customers. The 97% customer satisfaction rate displays the level of gratitude and enthusiasm people have for Peloton products (Canal, 2021). Another major strength is the alternative that Peloton provides for gyms and other fitness facilities. This has been especially relevant with the coronavirus causing many gyms to shut down for months. The popularity of Peloton soared all throughout the year 2020 due to coronavirus lockdowns. Not only does Peloton provide a substitute to gyms, but the quality of the workouts could be viewed as superior as well. Peloton members have access to top-notch trainers in the fitness industry, being able to access them from anywhere with the use of the Peloton app. Consumers are also given the opportunity to tailor their workouts in a variety of unique ways. They can participate in cycling, strength, meditation, yoga, and more.

Weaknesses:

The first weakness that immediately jumps out for Peloton is the recent crises the company has dealt with internally. These crises have massively hurt the company financially as well (Hickey, 2021). While they were able to rebound from the controversial advertisement, it was a major story both on social media and traditional news stations. However, the main crisis right now is in regards to safety, as the company had recalled all treadmills. A child died in a tragic accident involving a Peloton bike, and there have been many more safety incidents as well (Hickey, 2021). While the pandemic has resulted in a positive impact on Peloton’s overall business, this could partially be seen as a weakness as well. As more people get vaccinated and the world goes more back to normal, the demand for in-person gyms could rise going forward. With the company consisting of so many different aspects of its business, it can be difficult to devote full attention to all of these areas of focus. Peloton is by no means a startup company, but it is also not a juggernaut that has been in business for decades.

Opportunities:

A crisis does present an organization with a major opportunity to learn and improve. With the recent crises regarding safety, there are certainly opportunities for Peloton to improve the safety of its products and to gain back the trust of customers. A specific action that Peloton could take as a result of a safety crisis is including Safety straps with every bike. The straps are what riders can wear if they opt to not use the shoes and instead wear their normal sneakers instead. As of right now, the straps must be purchased separately from the bike. This would be a great way to hedge against riders slipping out of the bikes due to a shoe malfunction, which is what I am focusing my potential crisis on. Another opportunity for Peloton is to educate its consumers. In addition to the countless hours of video content that the various classes provide, there could be a great opportunity for the company to put more emphasis on safety tutorials for riders. Video tutorials that advise Peloton users on the correct way to use products and how to stay safe during workouts is an opportunity that will put the customer first, as the organization preaches. Another opportunity I looked into was Peloton expanding its studio locations. They are currently very popular in New York City and London, England, but have room to grow as well. In March, the company announced expansion plans into Australia (“News Release, 2021). This will be a great initiative to continue growing the global footprint that Peloton has. There is also an opportunity for more fitness products to be launched moving forward. Currently, the main products that consumers purchase are bikes and treadmills (before the recall). There are many more aspects of Peloton fitness as I mentioned in the strengths section. This creates a good opportunity for the company to release company-branded weights, yoga blocks, and more. Overall, Peloton has seen immense growth over the years, and should continue on this trajectory as there are many enticing opportunities for the company to explore.

Threats:

Peloton’s brand and customer support could be put in serious danger as a result of some of the recent crises that have ensued. As was mentioned in the weaknesses section, a child recently died due to a Peloton treadmill. Peloton originally responded to this Investor support as another threat that could arise from the crisis for Peloton. As a public company, Peloton faces the pressure of appeasing to investor expectations. While the company’s stock price is still much higher from its IPO debut in 2019, the past few months have not been very promising. Peloton (PTON) is down 20.2% in the last month, and a whopping 43.6% over the last three months (Morning Brew, 2021). Much of this concern from investors comes from the news of the company voluntarily recalling treadmills in response to safety concerns. The threat that can also arise is the outside competitors. Myxfitness, Lifecycle, Soulcycle, NordicTrack, and Echelon are all alternatives to Peloton that could take advantage of this crisis. Echelon at-home bikes are also $300 cheaper than the Peloton bike, with a comparable subscription fee to Peloton. NordicTrack is another company that is getting more buzz as of late, with its added high-tech features. This bike also allows users to stream movies and TV on the screen that is attached to the bike (Purewal, 2020).

Crisis Communication Plan

Peloton Communications Team

May 6th, 2021

Table of Contents

Introduction …………………………………………………………………………………….10

Acknowledgments…………………………………………………………………………….11

Rehearsal Dates ………………………………………………………………………………...12

Purpose & Objectives ………………………………………………………………………….13

Key Publics………………………………………………………………………………… 13,14

Crisis Team ………………………………………………………………………………….14,15

Crisis Team Directory ……………………………………………………………………....16,17

Media Spokespeople …………………………………………………………………………...17

Emergency Personnel ………………………………………………………………………….18

Key Media Contacts …………………………………………………………………………....19

Crisis Control Room …………………………………………………………………………...20

Pre-gathered Information ………………………………………………………………….21-25

Key Messages …………………………………………………………………………………...25

Dissemination …………………………………………………………………………………..26

Crisis Scenario ……………………………………………………………………………...27-32

Evaluation ………………………………………………………………………………………33

Reflection ……………………………………………………………………………………33-35

References……………………………………………………………………………………36,37

Introduction

Dear Peloton Community,

Our organization is committed to building and maintaining one of the top brands in the world. In order to ensure we are doing this, a Crisis Communication Plan has been created, as we must be prepared for anything that could damage the brand we have worked so hard to build. Just as our trainers preach preparation before every workout, we are applying the value of preparedness and discipline into this plan as well. The year 2020 and the coronavirus pandemic showed everyone how quickly a crisis can occur. With the release of this plan, we are determined to be as ready as possible when adversity inevitably strikes.

During times of crisis, we will have a set of actions and tactics that can apply to all sorts of different crises. As our employees and stakeholders know, we are a company that consists of so many different aspects. Software, hardware, media, music, and of course, fitness are a few of the many areas that are integral to our business. That is something we considered when implementing this plan. Resources that are present in this plan include:

Rehearsal Dates
Crisis Team
Media Spokespeople
Crisis Control Room
Key Messages
Tactics used during a crisis
Evaluation of Plan

This plan is very detailed and complex, but is crucial for our entire organization to review. As an organization, we expect everyone to learn all components of this plan so that we will be ready at all times. As Senior Peloton Instructor Alex Toussaint preaches, “Stay ready, so you don’t have to get ready.” This mindset aligns perfectly with the culture at Peloton, and applies very well to our Crisis Communication Plan.

Best,

John Foley

Chief Executive Officer, Peloton Interactive, Inc.

Acknowledgments

Each member of Peloton’s Crisis Communication team and key executives at the company have read through each step of this plan, and signed off on the enactment of it.

John Foley

Chief Executive Officer

William Lynch

President

Jill Woodworth

Chief Financial Officer

Tom Cortese

Co-founder, Chief Operating Officer, & Head of Product Development

Hisao Kushi

Co-founder, Chief Legal Officer

Dara Treseder

Senior Vice President, Head of Global Marketing and Communications

Karina Kogan

Senior Vice President, Head of Global Product Marketing

Dion Camp Sanders

Chief Strategy Officer

Mariana Garavaglia

Chief Business Operations Officer

Tim Shannehan

Chief Revenue Officer

Shobz Ahluwalia

Chief Information Officer

Rehearsal Dates

Our organization will practice Crisis Communication rehearsals three times per year. These rehearsals will be spread out throughout the year, as the schedule below shows. The pandemic has complicated people’s lives all over the world, and this is certainly true for businesses. With that said, we hope to return to the office for work in September of 2021. While that has been our goal, we are prepared for this rehearsal both in-person and remotely. The schedule below displays a meeting time, location, and zoom link for those unable to attend in person.

2021/2022 Rehearsal Dates:

Date: June 1, 2021

Time: 1:00 p.m EST

Location: 125 West 25th Street, 11th Floor, New York, NY 10001

Zoom Link: https://peloton.zoom.us856465223785

Date: October 5, 2021

Time: 11:00 a.m EST

Location: 125 West 25th Street, 11th Floor, New York, NY 10001

Zoom Link: https://peloton.zoom.us176345997443

Date: February 10, 2022

Time: 12:00 p.m EST

Location: 125 West 25th Street, 11th Floor, New York, NY 10001

Zoom Link: https://peloton.zoom.us376836901284

Purpose and Objectives

Purpose Statement:

Peloton is committed to building products that help our customers become the best version of themselves. We also want to ensure that everyone has a good experience using Peloton, and will utilize this Crisis Communication plan to stay on top of any and all crises that may hinder us from achieving this goal. As the coronavirus showed us, adversity can be inevitable, but we are determined to respond in the most professional and transparent way.

Objectives:

These are five objectives that can help guide our decision-making process during a crisis:

Become aware of a crisis situation and gather everything that has occurred
Communicate with key stakeholders and the publics in a way that is transparent and timely
Take action that can help us solve the issue
Learn from the crisis and use it as an opportunity to grow
Stay true to the Peloton culture and value of putting our members first

Organizational Key Publics

Key Publics for this plan include:

-Chief Executive Officer

- Executives/Managers/Senior Instructors

- Crisis Communication Team

- Members of the board

- All Employees

- Customers

- Suppliers

-Shareholders and Investors

- Competitors in the Industry

- Media

These are key publics for this Crisis Communication, both internally and externally. Those who work at Peloton are key publics for this plan, as are external groups such as customers, shareholders, and the media.

Crisis Communication Team

During an organizational crisis, we have selected a group of people who will lead the effort of Peloton’s Crisis Communication Team. to determine the best strategies to resolve the crisis situation at hand. This team will be responsible for: communicating with executives, creating media statements, making crucial decisions, and communicating with key publics.

Manager

Dara Treseder, Head of Global Marketing and Communications

The team manager will be the key leader in making decisions for the Crisis Communication team. The manager will also have a critical role for leading meetings and rehearsals. Dara Treseder has a wealth of experience in the world of communications and we are confident in her ability to lead this team.

Assistant Crisis Manager

Karina Kogan, Senior Vice President, Head of Global Product Marketing

The Assistant Crisis Manager is second in command to the Manager. This role will consist of working directly with the Crisis team manager to help them make major decisions. The Assistant Crisis Manager also has the responsibility of acting as Manager if they become unavailable during a crisis.

Control Room Coordinator

Mariana Garavaglia, Chief Business Operations Officer

The Control Room Coordinator is tasked with everything related to the control rooms for a potential crisis. The function of these control rooms will be explained further later in the document.

Crisis Team:

While the manager and assistant crisis manager have important roles in leading our Crisis Communication team, it is very much a team effort that will require the work of everyone. We have assigned various Peloton executives and employees who each bring a unique skillset to the crisis team. These people are:

Jessica Kleiman, Senior Vice President, Global Communications

Joanna Lee, Vice President, Global Brand

Dion Camp Sanders, Chief Strategy Officer

Shobz Ahluwalia , Chief Information Officer

Hisao Kushi, Co-founder, Chief Legal Officer

Crisis Directory

Team Manager

Dara Treseder, Head of Global Marketing and Communications

- Phone: 1-866-679-9129

- LinkedIn: linkedin.com/in/daratreseder