Peloton Sets Sights on Building a Small Business Ecosystem

One of the best ways to grow is to find a new channel.

And targeting small- to medium-sized businesses (SMBs) is emerging as one of the most attractive strategic growth drivers for businesses looking to add a little oomph to their approach.

Peloton announced Thursday (Aug. 17) the launch of Peloton for Business, a new B2B offering designed to meet customers “anywhere and anytime.”

The offering is described as a unified portfolio of B2B wellbeing solutions for enterprise clients that are being distributed across seven key verticals, including hospitality, corporate wellness, multifamily residential, education, healthcare, gyms and community wellness.

“Our goal is to be a solution-oriented partner that provides customizable options for each client’s unique needs, regardless of a company’s size,” Greg Hybl, senior vice president and general manager of Peloton for Business, a newly created role announced in tandem with the new B2B offering, said in a statement. “By offering both holistic and individualized solutions, we can now widen our client base to include [SMBs] in addition to the larger enterprise businesses we currently serve.”

Already, Peloton has inked a deal to put 5,800 of its stationary exercise bikes in Hilton hotels in the United States, United Kingdom, Germany and Canada with the goal of “a bike at every property.” The company has also partnered with the YMCA to get equipment into the nonprofit organization’s fitness centers.

Commercial Peloton bikes will allow for an unlimited number of users to ride at no charge to them, and the offering also allows for access to fitness programming on the Peloton app.

Corporate customers can provide more reliability than typical consumer customer audiences, and many firms are increasingly turning to B2B offerings as a strategic growth driver in today’s shifting macro landscape.

After all, Peloton had not been doing so hot with its consumer business, CNBC reported in February.

Read also: Why Firms Should Focus on Individuality to Build Their Own B2B Ecosystems

Looking to the B2B Channel for More Growth

Business clients make for good business, and organizations are realizing that targeting SMBs can serve as a revenue flywheel accelerant.

That’s because the B2B space comes with a stickier customer base that features less churn and lower acquisition cost on a unit economics basis than legacy business-to-consumer (B2C) approaches.

Still, building an SMB pipeline requires nuance and a pointed approach.

“Targeting SMBs looks quite different from your standard B2B marketing or retail marketing strategies,” Charles Zhu, vice president of product at data intelligence platform Enigma, told PYMNTS in May.

“The revenue an SMB could be making might be $10,000, $100,000, $10 million or more,” he added. “The potential lifetime value varies so much, there’s no analogous situation in other types of [B2B] approaches. What if we told you one of the consumers in your pipeline was worth a thousand times the value of another?”

But savvy operators know that a foundational principle of business is understanding that not every organization out there is an ideal customer. B2B clients won’t be swayed by run-of-the-mill standardized offerings; SMB customers demand solutions that align with their unique challenges and objectives.

That’s why businesses looking to optimize their B2B approach need to use data to make informed, accurate decisions around identifying potential customers with the greatest return on investment and the lowest risk.

See also: Why B2B Tech Will Drive the Next Innovation Cycle

B2B Engagements Borrow D2C Lessons

At least for now, the commercial landscape remains relatively less competitive than the broader consumer market.

PYMNTS has reported on how the digital health industry is undergoing a shift in strategy to focus on commercial customers, something which Peloton’s new B2B offering touches on too with its wellness-focused pillar.

In order to compete and win in this new commercially focused marketplace, organizations are bringing with them consumer-facing learnings around streamlined experiences and data-driven personalization.

“Small businesses, midsize businesses, large corporate customers are [now] expecting an experience more similar to what they get in the consumer part of their life, with intuitive use cases and a streamlined process,” Todd Manning, head of commercial strategy, M&A and alliances at American Express told PYMNTS in July.

As Pegah Soltani, head of payments products at enterprise cryptocurrency solutions provider Ripple, told PYMNTS: “Most of the companies in the world are actually [SMBs].”

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