CEO of the wildly popular indoor cycling studio SoulCycle, Melanie Whelan, came to campus to talk specialty retail with Wharton undergrads and MBAs in “Principles of Retailing” (MKTG 225).
Over the course of the semester, instructor Bari Harlam, W’83, G’89, GRW’91, has invited an impressive roster of industry leaders to give her students an inside perspective on retail as a whole and the choices involved in implementing a winning retail strategy.
Harlam, a Wharton undergrad and PhD alumna, knows retail firsthand from a successful career in consumer marketing and product development as Senior Vice President of Marketing at CVS Health, Chief Marketing Officer at Swipely (now Upserve), and Senior Vice President of Membership Marketing and Analytics at BJ’s Wholesale Club.
Whelan talked with students about the company’s evolution into a “boutique fitness” icon and how to build a strong following in a niche market.
Founded in 2006 with a single cycling studio on New York City’s Upper West Side, SoulCycle now has a dedicated following of “spinners” in more than 85 studios across the U.S.
Here are 5 takeaways on creating a successful business and marketing strategy from her talk:
1. Make Space for Innovation
SoulCycle wasn’t always a household name. When the company was first founded in 2006, it didn’t fit neatly into the fitness industry. “It was a really tough sell — boutique fitness didn’t exist,” Whelan said. “We always joke that we had to create a marketplace to put our product into.”
With more than 10,000 spinning classes across the country per day, the company doesn’t have any trouble filling bike seats now. “Thirty percent of our weekly reservations are gone by Monday 12 p.m.,” Whelan said.
2. Recruit the Best Talent and Treat Them Well
Whelan attributes much of SoulCycle’s success to its instructors, who go through a very competitive audition process. “At the heart of what we do are our instructors,” she said. “We run American Idol on a bike.”
Many talented fitness stars want to work for SoulCycle because of the company’s reputation for valuing employees and their careers. “Our [instructor] retention rate is 96 percent,” Whelan said. “Don’t worry about the board, don’t worry about your boss. Worry about the people working underneath you, and make sure they’re having a phenomenal experience.”
3. Market Through Your Customers
With an ever-growing following on social media, word-of-mouth publicity is a strong component in SoulCycle’s marketing strategy. “SoulCycle is a community business around personal transformation,” Whelan said. “People want to share about us. A lot of marketing is taken care of by riders.”
4. Evolve with the Times
While the company’s original clientele consisted largely of young working mothers, the company is expanding its target market. “A huge millennial population is coming to SoulCycle before going to drinks, coffee, etc.,” Whelan said.
She believes that SoulCycle’s rapidly expanding customer base is a result of the conscious changes they continue to make to their business model. “You’ve got to keep evolving. If we were still doing the same thing we did 12 years ago, we would fail.”
5. Pay Attention to Detail — and Understand the Customer Journey
SoulCycle is revered for its engaging, high-energy atmosphere among riders — including those in the MKTG 225 class. “I love the attention to detail. I like how no matter where I go all over the country, it always smells the same,” Bradley Smith, W’20 said.
That’s part of the company’s objective: to create a sanctuary branded environment where they strive “to be the best part of our rider’s day.” To understand what clients want, Whelan explained that businesses need to take a holistic approach.
She shared SoulCycle’s customer journey map, which tracks the SoulCycle consumer from 7 a.m. to 9 p.m. “We see our riders for 45 minutes a day, and they’re begging us for more. What can we give them in the remaining 23 hours and 15 minutes? That’s what we’re spending a lot of time thinking about,” she said.
— Linda Zou
Posted: March 13, 2018