buyer's market

Why Paying More for Fitness Is Part of Peloton’s Proposition

A still from That Peloton Ad. Photo: Peloton

One of the frequent refrains I heard during the controversy over That Peloton Ad was “who pays $2,000 for an exercise bike?” But of course, you can say this about all sorts of ways people exercise. Peloton — which makes high-end, internet-connected home exercise bikes that allow you to participate in video group fitness classes, for which it charges a monthly fee on top of the bike price — has a high upfront cost but looks cheap compared to twice-weekly sessions with a personal trainer or SoulCycle twelve times a month, both of which are also things people pay for. Why do people do any of these things when they can run for free, or pick up a cheap home exercise bike for $200, or join Planet Fitness for $22 a month?

Of course, there are a lot of reasons, including that the expensive options may be more pleasant or more fun ways to get fit. But a big reason is follow-through: A $2,000 exercise bike you’ll keep using is a better value than a $200 one that you’ll use five times before turning it into a clothing rack, and people buy Peloton because (they believe) they will actually use it.

Lots of fitness spending is aimed at overcoming problems of intertemporal choice: We wish we had exercised yesterday, and we want to exercise tomorrow, and yet we often choose not to exercise right now and proceed to regret that choice the next day. Products and services that bring our current actions into line with our past and future preferences can be very valuable, even if they don’t seem strictly necessary for the actual practice of exercise.

So, for example, 24-hour cancellation policies for fitness classes or personal training sessions help companies manage capacity and avoid leaving space unsold, but they also help customers by locking them into workouts: Since I have already paid for a SoulCycle class, I will feel silly if I do not go, even if I am tired and very tempted to skip working out. A Peloton customer may feel the same way about an expensive bike: Now that I have paid $2,000 for this thing, I had better use it.

But this strategy of upfront financial commitment is not foolproof. Unlimited monthly gym memberships are supposed to help us work out more, because we don’t pay at the margin the more times we go. Yet a 2006 paper in the American Economic Review found members at one network of American health clubs paid over $70 a month to work out just 4.3 times on average — spending more than if they had paid the $10 single-visit fee each time they went. Even a substantial and non-refundable per-class fee does not ensure completion of every planned-and-paid-for workout, as you know if you’ve ever shown up at a sold-out SoulCycle class without a reservation and watched the staff call out booked-but-unclaimed bikes for resale.

There are also more aggressive commitment strategies than simply paying upfront. “Commitment contracts” are designed to make not exercising more expensive than exercising. Participants agree to set aside money that will be released to them only if they complete a goal, such as a desired number of workouts in a month; otherwise, the money is given to charity. Such an approach appears to be modestly effective, and is available through services like StickK, but hasn’t yet achieved wide uptake, maybe because it feels weird to punish yourself by donating to charity.

An alternative to financial accountability is interpersonal accountability. This is what That Peloton Ad was supposed to be about: A customer, using her expensive new piece of equipment to form and stick to a positive new habit, and demonstrating to those around her that she was doing so. Of course, this could be (and was) read in a creepy way: That her husband, whom the Internet decided was abusive, was pressuring her to work out or else, even though she was already thin. But as Amanda Mull describes in the most recent issue of the Atlantic, a more positive form of interpersonal accountability is a key part of what Peloton customers are intending to buy.

Mull writes in particular about one customer who started getting better use out of her Peloton bike after she found the right, supportive Facebook group to share her workouts goals with. This is at the core of Peloton’s proposition: It takes the interpersonal networks that bolster the effectiveness of in-person group fitness, but moves them online. From Crossfit to yoga to bootcamps, one of the benefits of group fitness is developing social links with people — both instructors and other participants — who expect you to do something and may notice if you fall away. To the extent these networks reflect their participants’ own desire for interpersonal accountability, that is a good thing.

And besides the commitment aspect, merging an exercise experience with a communal or even “spiritual” one helps make the exercise seem like less of a chore, reducing the degree by which it looks more appealing to do tomorrow than today. That is the holy grail of fitness commitment: not finding a way to lock ourselves into doing today what we will wish we had done tomorrow, but changing our own preferences so they align across time — making ourselves into the sort of people who actually want to work out today, right now. Of course, changing yourself is really hard. But many people will keep paying as they try to find the way that works for them.

Why Paying More for Fitness Is Part of Peloton’s Proposition