Peloton, a top-tier fitness brand, recently discontinued their unlimited, no-cost app offer due to low numbers of non-paying users converting to paid subscribers. This decision was unveiled by CFO Liz Coddington at a Morgan Stanley gathering.
She elucidated that a small percentage of non-paying users were becoming paying subscribers, which nudged the company to end the no-cost, unrestricted app access. Now, the objective isn’t just to bring in new users, but to persuade them to become paid members.
This new course of action, the company believes, will spur more consistent growth and help augment both revenue and profit margins. They could now concentrate on affording high-quality service to their paid customers.
The discontinuation occurred a few weeks back, and it was a key facet of Peloton’s growth strategy. Existing users, however, who activated the offer prior to its end, will continue to enjoy it.
The unexpected policy adjustment has created a stir among users who had planned on activating the offer.
Peloton terminates free app to promote subscriptions
Clear communication was emphasized to circumvent any confusion or misinterpretation among existing and potential Peloton users.
Peloton offers two pricing options for new subscribers- a $12.99 monthly or a $24 monthly subscription, following a week-long trial. The cheaper option provides basic access, while the pricier one adds live classes, new content priority access, and it can be shared with two other users.
As part of a major overhaul last year, Peloton presented their digital app as the zenith of its promotional efforts. This gave birth to an integrated system combining the beneficial features of online fitness resources, underlining Peloton’s commitment to delivering workout experiences tailored to each user’s needs and finances.
The move from selling physical products to promoting the fitness app was steered by Peloton CEO, Barry McCarthy. McCarthy, a former executive, expected complimentary users to eventually turn into paying subscribers. The new software-focused business direction represents a significant transformation for Peloton, a gamble that’s yet to be proven effective.
