Peloton · Metrics · Mid · 45 to 60 minutes

Which retention bet should Peloton make?

Peloton is a fitness company that sells connected exercise equipment and a subscription for live and on-demand workout classes. Answer this product management case and get it graded line by line against a weighted rubric.

Metric diagnosis
Prioritization
Retention strategy
Experiment design
User segmentation

The situation

Peloton's VP of Product for subscriptions has asked you to recommend how the member product team should tackle rising churn. Peloton sells connected fitness equipment and a recurring membership that gives access to instructor-led classes at home and in the app. Assume paid member churn has moved from 4.2 percent to 5.3 percent over the last two quarters, and finance wants a credible plan before next quarter planning. Several leaders have different instincts: some want more class and community features to make the product feel richer, some want a habit recovery program to re-engage members whose routines are slipping, and some want to simplify the first weeks so new members form a workout habit faster. The problem is that all three paths sound plausible, but there is only capacity to fund one major retention initiative this quarter. You have access to product usage, basic cohort retention, and member lifecycle data, but not a full market research study. Your recommendation needs to show how Peloton should decide where to place its bet and how it will know early if the choice is working.

What to produce

A 1 to 2 page recommendation memo.

Your answer must

Define the retention problem in metric terms and name one leading usage signal you would test as a predictor of churn.
Choose one priority member segment or lifecycle stage to focus on first, and explain why.
Evaluate at least three options: richer product features, habit recovery or re-engagement, and onboarding changes.
Recommend one next-quarter initiative, including the mechanism by which it should reduce churn and the main risks.
Outline an experiment or phased rollout with success metrics, guardrails, and a decision point within one quarter.

Constraints

Do not rely on price changes, hardware launches, or major brand marketing.
Assume you have one product squad plus shared data science support for one quarter.
Use only data Peloton likely already has, such as membership status, workout activity, and basic cohort retention.

Format

Use short headings for diagnosis, options, recommendation, and experiment plan. Make any assumptions explicit.

How Peloton actually played it

Describes how Peloton cut churn by giving members a second way to use the product rather than adding many features. It starts from a retention statistic that should have worried the product team.

Find the usage stat that predicts churn
A second use case can raise retention more than extra features
Expand the job, not just the feature list

Built from Peter Stern Cut Peloton’s Churn By 26% In One Quarter. Your Employee Software Needs The Same Fix by James Bickerton (Your Product Sucks).