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From Controversial Marketing To Customer Service, Peloton In The Hot Seat, Yet Again

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Matt Wujciak
06/22/2020

customer service

“It is rare for a company’s stock to fall sharply after a poorly received advertisement, but recent history shows fitness-equipment maker Peloton Interactive Inc. shouldn’t expect lasting damage from social-media backlash over its recent commercial,” the WSJ reported on December 6th.

Peloton shares fell 15% over just a 2 day span following a controversial commercial during the holiday season, erasing nearly $1.6 billion in market value. Late-night comedians, influencers, and reporters mocked the company’s holiday ad via social media - in which a man presented his wife with a Peloton bike.

It turns out the WSJ’s prediction was right not to expect lasting damage, so it seemed. Peloton is certainly in the minority of brands that have thrived during the pandemic, as fitness consumers found alternatives to gym closures, and continued to spend more time at home. 

Peloton’s sales surged 66% in the first three months of the year as consumers flocked online to invest in the $2,000 bike.

The company ended the most recent quarter with more than 866,100 subscribers that have bought either the bike or the treadmill, a 94% increase from the year before. But if the brand wants to keep its momentum going, it will likely need to address other concerns as well. 

While ecommerce sales continue to boom and consumer trends continue to shift in a digital direction, many customers across a wide array of industries and demographics are getting used to purchasing products and services online - products and services that they hadn’t traditionally utilized online. 

CX demands more than sales alone

Yet, as sales increase, naturally, so too do customer inquiries. A business can have the best sales reps in one of the most lucrative markets (ecommerce during the remote era), but if the supply of customer service can’t match efficient sales efforts or consumer demand, the business stands little chance of retaining optimal customer satisfaction scores (CSAT), customer-lifetime-value (CLV) metrics, or customers in general. 

As I mentioned on Tuesday, in a recent CCW Digital article

Make no mistake, online sales and customer volume is booming in ecommerce. Online sales grew nearly 50% at the peak of the pandemic as consumers stayed home but continued to shop. As ecommerce is currently booming (on paper) for obvious reasons, and call volume is increasing, many business media outlets have recognized that retailers such as Lululemon, Macy’s, Best Buy, and many more are sacrificing the long-term customer experience (and along with it, retention). 

…it’s largely due to the fact that large corporations are struggling to adapt to accommodate an influx of consumer volume, lagging behind in consumer behavior research combined with archaic customer service technology

And this seems to be the case with Peloton, as consumers are beginning to take their frustrations to Twitter after not receiving a timely response from Peloton’s customer service department. 

Read More: Online Customer Service Delays Crippling Our Favorite Retailers

@onepeloton with ZERO notice (no call, no email) you failed to show up and deliver the bike I had been waiting 7+ weeks for. This is super disappointing and if you value the integrity of your brand you will take greater ownership of this systemic problem,” said one angry customer. 

A spokesperson for Peloton declined to comment on the abundance of customer complaints, the lack of responses to customer inquiries, or even why some orders had been canceled in the first place - but did acknowledge the delivery delays (which can take between 9 and 12 weeks, according to their website). 

A Peloton case study

Peloton "appreciated the patience" of impacted customers and that it encouraged anyone experiencing issues to contact its Support team, according to Business Insider. Mistake #1, customers are not patient, and downplaying a problem (such as an abundance of customer inquiries left unanswered) only makes those customers more frustrated with the brand. 

Robert Brinkman, who was scheduled to receive his new $2,000 bike between 10 a.m. and midday on June 2nd, said that he received an email at 7 a.m. on the morning of June 2 saying that "due to extenuating circumstances" Peloton would not be able to complete the delivery.

Brinkman, along with other Peloton customers were told they would be contacted by a member of the Peloton delivery leadership team within 72 hours to reschedule a failed delivery. When Brinkman didn’t hear back within the three days promised, he contacted Peloton’s customer service department himself - mistake #2, overpromising and under delivering. 

"The rep told me that my ZIP code was in an area with protests and the deliveries were limited but could not give me any information," said Brinkman. He was having his bike delivered to his home in Brookhaven, a suburb outside of Atlanta. While Atlanta was under curfew, Brookhaven was not.

Mistakes are made, which is largely why customer service exists in the first place. But timeliness to an inquiry is everything, not to mention Peloton’s absence of an apology, but rather an excuse – mistake #3. 

Four days later, he received an email saying that his delivery had been rescheduled to June 22. 

Read More: How To Guide: How To Scale Conversational AI

"Please note no earlier dates are available," the email read. "Should this date and time not work for you, please reply to this email to coordinate with a member of our Delivery leadership team."

Brinkman said he replied to the email asking to speak with a live customer service agent about the delivery. Customer service mistake #4, and arguably the most problematic - not deploying agents to deliver human support regarding more important, personalized, or serious inquiries. 

Identifying the right channels

As seen in a recent CCW Digital report sponsored by Salesforce, 69% of consumers say that personalized care influences their loyalty to a company, helping organizations obtain quality incoming customers. Yes, that takes more employees to handle personal customer inquiries. It also takes the proper aggregation of resources (whether it be self-service technology, or customer service employees) to create contextual overview and efficient customer service, aligning the right channels with the right inquiries. 

Read More: Special Report Series: State Of The Voice Channel

Customers are calling, brands are struggling, and trends are emerging. It’s important for brands like Peloton to understand that while volume is increasing, fewer percentages of customers are calling with simple, transactional issues - meaning, the more important the inquiry is, (like a drastically delayed product shipment in Brickman’s case), the more likely a customer like Brickman will try to turn to the IVR or phone channel in hope of reaching a live agent to solve this complex (or personal) problem. 

Two days later, Brickman received a note back saying that this was the earliest date available with no additional explanation. 

Consumers, for the most part understand that mistakes can be made, especially when they are of an operational nature rather than a lack of customer care.  

"I 100% am empathetic to the times and the strain on demand that they are experiencing," Brickman said. "However, they are hiding behind recent events as excuses, as opposed to transparency to the real problem, which is probably my biggest issue.”

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