Several weeks ago the U.S. Consumer Product Safety Commission (CPSC) issued an “urgent warning” for the Tread+ and Tread treadmills made by Peloton, urging people to stop using the products immediately. On Wednesday, the at-home fitness company announced it was recalling the exercise equipment.
As reported by the New York Times, the recall comes less than a month after Peloton fought the U.S. Consumer Product Safety Commission warning that dozens of injuries and the death of a child had been linked to the machines. “Peloton is offering a full refund for the $4,295 machine with a 32-inch touch screen that allows runners to work out with the aid of instructors,” according to the newspaper.
Peloton did not immediately respond to a request to comment for this story about its delay in recalling the treadmills.
In a statement posted on the company’s website, Peloton CEO John Foley said, “I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset. For that, I apologize.
“Today’s announcement reflects our recognition that, by working closely with the CPSC, we can increase safety awareness for our Members. We believe strongly in the future of at-home connected fitness and are committed to work with the CPSC to set new industry safety standards for treadmills. We have a desire and a responsibility to be an industry leader in product safety.”
Andrew Moyer is a crisis management expert and the executive vice president and general manager of Chicago’s Reputation Partners. He said, “Peloton missed a clear opportunity to build on its brand equity and reputation when it did not proactively work with the CPSC to recall the Tread/Tread+ products when first given the opportunity.
“Coming out of the global Covid-19 lockdown and strong shift in consumer fitness trends to home equipment, Peloton was well positioned to continue building on not just the loyalty of its passionate members (full disclosure: I’ve had a Peloton bike for several years) but on a broader reputation as a leader in the home fitness and wellness sectors,” he said.
What Peloton Should Have Done
Moyer observed that, “Peloton failed to appreciate—and should have predicted—the strong emotional reaction of many when they heard ‘urgent warning’, ‘death’, and ‘children’ in the same sentence. Instead of issuing a tone-deaf statement pushing back against the federal safety regulator’s warning to consumers,” he said the company should have:
- Proactively announced a recall “out of an abundance of caution” or at a minimum committed to working on a solution jointly with the CPSC
- Undertaken a rapid pulse survey of its members, and the general public, to understand their stakeholders’ expectations and concerns
- Made clear that safety comes first by not letting it appear that profits were more important
Waiting Too Long
Ross Steinman, a consumer behavior professor and researcher at Widener University, said “Peloton waited too long to recall their treadmill products. For safety-related issues, brands should always take immediate action to voluntarily recall the products under question.
“The stay-at-home fitness company’s slow response resulted in a child’s death as well as numerous reported injuries. Peloton’s reactive stance highlighted their focus on maximizing profitability over concern for their customers. This is disheartening because the ‘Peloton Community’ is a hallmark characteristic of their branding. I would not be surprised to see more widespread consumer backlash due to their poor handling of an obvious product recall situation,” he predicted.
Advice For Business Leaders
Steinman said there are several lessons corporate executives can learn from how Peloton responded and managed their crisis. The lessons include:
A focused, customer-oriented, proactive approach to crisis management is essential to maintaining the relationship between the consumer and the brand, even if there are significant financial implications to doing so.”
In crises, business leaders must act swiftly to manage the transgression while reinforcing to their customer base that concern for them is paramount.
Empower And Engage
It is important that business leaders empower key segments to voice their displeasure, engage them in constant dialogue, and ultimately partner with them in the crisis management process.
Consider The Consequences
If they do not successfully implement a carefully curated crisis response, then they risk irrevocable damage to the consumer-brand trust that likely has taken many years to establish.
Helio Fred Garcia, president of The Logos Consulting Group, a crisis management/strategic communication firm, said that, “A foundational strategy in effective crisis management is to do what you know you’ll have to do anyway, while it can still do you the most good, whether you like it or not.
‘The latest development in the Peloton treadmill saga provides a cautionary example of what happens when leaders choose to abandon this strategy— and prolong the crisis and its negative consequences as a result,” Garcia said.
Jen-Ai Notman is a branding expert and founder of the Eshe Agency, a marketing firm with a focus on communications, affiliate marketing, and branding. Notman said she “… found it refreshing that [Peloton CEO John Foley] admitted they made a mistake, instead of burying the apology under excuses or company process time. [He] took responsibility not only [for] the safety around his product, but also around the delay in doing this recall.
“Business leaders should take note that customers do not want an essay of reasons or rationalizations for your mistakes and shortcomings, they want leadership to acknowledge mistakes, be transparent and commit to doing better,” she said.