Jamie Beck, VP of Field Operations at Peloton, joins Sarah to discuss the company’s perception of service as a strategic differentiator and how field operations is being used to deliver a first-class customer experience.
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Sarah Nicastro: Welcome to the Future of Field Service podcast. I’m your host, Sarah Nicastro. Today we’re going to be talking about Peloton’s investment in field service as a strategic differentiator. I’m excited to welcome to the podcast today Jamie Beck, Vice President of Field Operations at Peloton. Jamie, welcome to the Future of Field Service package.

Jamie Beck: Thank you, Sarah. Great to be here.

Sarah Nicastro: Absolutely. Thanks for being here. So we’re going to talk today about the Peloton field service story, and I’m very excited to do that. Before we dig in, can you tell our listeners a bit about yourself and your role with Peloton?

Jamie Beck: Sure. I’ve been with Peloton a little over four years. Joined as the VP of Field Operations back when it was really just coming off of a pilot, and so really been a part of, I guess, the meteoric growth over the last few years, and in this role, I oversee our internal teams that do the delivery, repair, and refurbishment of our products to our members. Prior to Peloton, I spent some operational roles. I was at Fresh Direct, which is a large online grocer in the New York area, spent a little bit of time at Target, and then spent time at Cintas as well, the large uniform company, where I was in a number of different roles, and then going way back, I was in the Navy. I did ROTC in college, so I spent four years in the Navy. So most of my career has been in the operation space. A lot of it in the delivery, both B2B as well as B2C prior to Peloton.

Sarah Nicastro: Okay. Very cool. So you and I connected, Jamie, and talked a bit about the Peloton story as it relates to service, and I love it because I think it is a really good illustration of a lot of the trends we see right now with companies in all different industries, recognizing the opportunity that exists to use service as a strategic differentiator, and so this story is very representative of that, and I think it’s a very interesting one to dig into, how field service is such a valuable tool in being the face of a brand. So let’s talk a bit about that. So you mentioned that you joined the company after the decision was made to invest in field operations and field service. So can you talk a bit about some of the reasons that the company’s leadership felt it was important to make that investment?

Jamie Beck: Sure. As I think back, there’s probably three reasons that I think about. And so John Foley, our CEO, they started selling bikes in 2014 and as we started to deliver them, one of the early important things as a company was to put our members first, and we call all of our customers members, and really to deliver to them a great brand experience, and I think John took a look to say, “Hey, how can we make this delivery experience better than what we’re currently doing?” And so they started with a pilot in the New York area in order to test this out. Can we deliver better brand experience than what we’re currently doing? And so I think that’s the first thing. The second thing was we know that over time, these are big bulky products and they’re bikes and they could break, and so I think the investment in field service was not only about the delivery, but I think thinking ahead to how are we going to service these? And how can we control that experience so that our members have a great experience, not only on the delivery, but also on the repair and service so that we can get into their homes and fix them quickly?

Jamie Beck: I often equate it to if your iPhone breaks, you take it to the Apple store. If something goes wrong with your Peloton, you can’t simply put it into your car and drive it to one of our showrooms. We have to come to you. The third thing I think was … and I think this was John’s foresight as a leader was this is back in 2015 when this category was really just being created. Competition was going to come. If we’re successful, competition is going to come, and so it’s an investment in field operations. Obviously there’s probably cheaper ways that we could do this, but we knew that by investing in this field operations team, delivering this great brand experience, being able to service and repair your products, it helps put a strategic moat around what we were doing as a business, and I think those three things are really what we thought about, what John thought about when we decided to make this investment in field operations.

Sarah Nicastro: Okay. So prior to doing this, the delivery and installation was handled by third party providers, is that correct?

Jamie Beck: That is correct. Yep. Yeah, and we still use 3PLs today. It’s a mix of internal and 3PLs. We’ll always have 3PL partners. Our relationships with our 3PL partners, they’ve actually probably gotten stronger since we’ve started our field operations team, because we’ve been able to learn from each other, but as we move forward, we’ll always have those 3PL partners, and today the majority of what we do is done by our own teams, but we’ll never be at a point where we’re a hundred percent field operations, whether it’s in the US or any of the other countries that we operate in.

Sarah Nicastro: It’s a good point though, having that function internally gives you the wealth of knowledge to help foster those relationships and, train those third party providers on what you’re doing yourself as the field operations of Peloton and therefore what you would like them to do or what you would expect them to do. That makes sense, and I think the idea of … I think when people think of Peloton, they think of a premier, exclusive product. So desiring to provide a service that is on par with that brand perception makes a lot of sense to me. So those were the three reasons that the CEO felt it was important to do this, and that makes sense. As I said earlier, investing in field operations, seeing an investment in field operations from a brand like Peloton is representative of how we see businesses perceiving the opportunity around service and how they can leverage a frontline workforce in really being the face of a brand, particularly if it’s a product scenario where you buy online.

Sarah Nicastro: You might come to a showroom and you might have a face to face interaction, or you may buy online and not have that face to face interaction. So when that delivery person shows up at your door, that might be the first face to face impression you have of the company you’re purchasing from. So can you talk a little bit about with this investment and with the field operations team that you’ve built, what is the user experience that you desire to provide to your members?

Jamie Beck: Sure, and going back … I don’t anymore, because the scale has been too much, but I used to interview every field specialist that would be going into the homes, and I think that the litmus test we would always use is would I feel comfortable with this person coming into my home? And I think we still do that today, obviously at a much, much larger scale, but it’s one of those where you get the branded van that pulls up, you get the team that comes out of the van and they’re wearing the branded Peloton gear, athletic looking, similar in line with what we promote around fitness, but then they walk up to your door, they’ll introduce themselves with their name and then they will walk the path, but the first thing that they do is they’ll ask, “Would you like me to remove my shoes before I come into your home?” And it all goes back to we’re being invited into your home and we respect that and we’re going to treat it and respect it in that way, and so whenever we go into the home, those are some of the things we do.

Jamie Beck: Once we bring the product into the home, into room of choice … and the bikes are about 90% prebuilt. We do that so that we can get good quality and test data, and it also … we realized early on when we were delivering them in the box and building in the home, it wasn’t really value add, and actually, from an experience standpoint, it was uncomfortable, because does the member talk to us? Do we talk to them? It just was something that we said, “Hey, this is non-value-added. Let’s make sure that the time in the home is complete value add.” So we’ll bring it into room of choice, we’ll size them to the bike to make sure that the settings are correct to that member. We will have them try on the shoes and learn how to clip in and clip out, because if you’ve never clipped out of a cycling shoe, out of the cleat, it can be difficult.

Sarah Nicastro: Yeah. You don’t want them to get stuck.

Jamie Beck: Right. Completely, and these are all things that we’ve learned along the way. We do customer satisfaction surveys with every member and we get a great response rate and things that we’ve learned. We connect them to their WIFI. We get them set up on their account, but we do little things too. One of the things that the bike asks you during setup is to enter your height and weight, and so when it comes to that point in the screen, our team member will step away in a way that demonstrates to the member that we respect your privacy, but at the end of the day, the experience of the delivery is so that when we leave, you are ready to ride and you can enjoy your Peloton from there forward.

Sarah Nicastro: So I think those are really interesting observations, and I think that what you’re describing sounds like you could achieve the … and you did achieve the function of delivering the bike and setting up the bike without doing that yourself. I mean it’s totally possible, but this goes back to the concept of investing in this field function as a way to differentiate the business. So when you talk about what you’re doing … so you said, the bikes are 90% prebuilt. You’re not going there just to build the bike. You can do a lot of that before you arrive, but you’re going there to provide a Peloton customer experience. You’re going there to make that member feel valued and important and appreciated for the investment they’re making. So a lot of the things you’re talking about, the interactions you would have with them, how it’s personally to that person, and how you make them feel important in terms of let us help you get completely set up so that when we leave your house today, you can get on and ride and get the full value out of your investment. It’s really about using service as a way to reinforce that Peloton brand and the feel you want those folks to have from buying the product that you provide.

Jamie Beck: It is. It is, and it is about an experience. That’s something we talk about. It’s not necessarily about the delivery. It’s about the experience, and I think one of the things that helps us differentiate that too, is that the majority of our teams delivering our products have their own bike at home. It’s something where a few years ago, our president William Lynch actually lowered the price of the employee bike so that they could have that, because it’s so powerful when you walk into someone’s home and they’re asking questions, and you can say, “Well Hey, I was on my bike last night and my favorite instructor is Robin, and this is my favorite type of class.” It’s more about that experience, because we know … and it’s the experience, obviously. They’re going to go tell their friends about it or their family to say, “Hey, not only did I get the Peloton, but let me tell you about the delivery experience.” I mean that’s how we think about it. It is a true differentiator to what we’re doing.

Sarah Nicastro: Yeah. That’s a really good point. If they can say, “Hey, let me show you this cool function. This is my favorite thing,” or to your point, “This is my favorite class, my favorite instructor,” it’s a really good point. So I have a couple of questions then about how you’re preparing these frontline workers to provide the service experience. So what type of training are you giving? What type of expectations are you setting in terms of what they should be doing while they’re there? And the reason I asked this, Jamie, one of the things that came to mind as you’re describing this experience is you’re really doing this to set yourself apart, not to “turn and burn.” You’re not saying, “Get out there and deliver more bikes, more bikes. Drop them off, move on.” You really want them to spend time and invest in providing that experience. So what resources do you provide to equip them to do that, and what, I guess, metrics or objectives do you put around what you want them to be measured on in terms of their performance?

Jamie Beck: Sure. It starts with hiring. I think we look for people, like I said before, that you would feel comfortable coming into your own home. A lot of our employees … there’s a whole wide range. We don’t necessarily look for, hey, this is the prototypical field specialist for Peloton. We have former division one athletes. We have people that have worked retail. So it runs a lot, but it’s generally just good people. It starts there. The training we provide obviously is knowledge about the product, but the thing that we don’t do is we don’t give our team a script. We don’t expect them to go into the home and say, “Hey, you have to say this and in this order,” and we learned that through benchmarking some other delivery companies, because let’s say you’re going through your script, but the member only is concerned about, “How do I clip out? Because I’ve heard that clipping out is hard,” and so they’re going to be patient, and I think that’s a key word that we’ve learned in the experience is they’re going to be patient with a member.

Jamie Beck: And in order to do that, they have to have the knowledge around the product and how it works, which again, is helped by the fact that most of them are owners. Even if you’re not an owner, we have our products set up in our warehouses, and so if you want to do a ride when you get back from your day of working before you go home, that’s something that we encourage, but they’ll go in and really it’s about listening to the member, and so I think as much as product knowledge, it’s just customer service training and being patient, and it goes back to what you said. It’s not about dropping off X number of bikes a day. We want every member to feel that they have all the time in the world, and so if you have a hundred questions, we’re going to stay there and answer all 100 questions, going back to that goal of when we leave, you’re ready to ride. And I think one of the things that we tell our team is whether it’s your first delivery on Monday morning or your last one on Friday afternoon, that members should have the same level of experience, and so I think going back to your question, obviously there’s product knowledge there, but more important is how do you deal with members and be patient with them?

Sarah Nicastro: So a couple of questions on that. So would you say that you hire more based on personality and the ability to provide that customer experience or technical aptitude?

Jamie Beck: Yeah, great question. I think more about their personality right now, and obviously when we first started, it was a lot about delivery. It’s still mostly about delivery, but the service component and the repair component and the field service component for us is only going to continue to grow. As we get products that are older and have more use in the field, and as just the sheer number of products that we have in the field grows, the amount of service and repair work that we have to do is increasing, and so sometimes we’ll find people maybe that worked at a bike shop and have that level of service, but for the scale that we have been growing at, that would not allow us to hire enough people, if we just looked at technical skills. We can teach the technical skills, and so as we’ve grown, we have built in what we call our master technician courses that allows that field specialist to promote into a role where now they can go into the home and they’re not delivering anymore. They’re just providing service, and so traditionally we’ve looked for more personality, knowing that we can train the skills in order to do the service.

Sarah Nicastro: Yeah, and that was what I was expecting, because I think that’s in line with … when you look at companies providing service to a consumer, I think that tends to be more the case. It’s more important to get the right fit in making them feel the way you want them to feel while you’re there and once you leave, and the stuff you’re actually doing while you’re there can, most of the times, be taught. So that makes sense. Now in terms of measurement of performance, is that mainly based off of those customer satisfaction surveys then?

Jamie Beck: Yep. Yeah. So we send out a survey, whether it’s a delivery or a service or repair, and we have a very high bar. We measure it on a customer satisfaction, on a five star scale. As a company, we also measure net promoter, NPS, of existing members, but when it comes to our internal teams, we strive for a near perfect five. We’re not there, but overall, over tens of thousands of surveys, we’re at about a 4.92. So it’s a high bar that we set, and we have locations, individual locations that are at sometimes a 4.97, 4.98, and our teams really thrive on that, especially when if you see in the comments, “Hey, I got my delivery today. Wow, I was blown away. Jamie and Sarah did an amazing job.” It’s recognition and our teams love to see that. So we make a big deal out of the success that our teams have, and at the same time we look for areas or trends where we can improve the overall experience for our members.

Sarah Nicastro: Sure. Okay. That makes sense, and I think it’s interesting, when you look at the employee engagement and how that relates to the customer experience, promoting that culture of even being a part of something that is as “elite” as Peloton, and feeling invested in being able to provide those experiences. If you have employees that are excited about doing that, and you promote a culture that rewards them for doing that, that’s going to help them just be excited about showing up and giving that customer the feel you want them to have while they’re there. You’re not asking them to just, “Can you show up, can you check these boxes and can you move on?” To me, it sounds like if you can find the right fit, like you said, from a hiring perspective, it’s a job that would be really fun for folks to do, because if they like engaging with people and they like that customer service aspect of it, they have great opportunities to be able to do that.

Jamie Beck: Certainly.

Sarah Nicastro: So you mentioned this Jamie, that as you started with field operations, the focus has been more … just the nature of the relative newness of the business and of the equipment, the focus has been more on the delivery side. So I’m curious, over time, how do you see the evolution of the service side of the business and how do you see this investment in Peloton field operations as an ability to continue to differentiate?

Jamie Beck: Sure. The service component’s only going to continue to grow. I think the biggest opportunity for us is right now, we work in a more reactive or break fix service area. So you’re riding your bike, something goes wrong, then you have to call into member support and we’ll send someone out to fix it, but I think with Peloton, obviously it’s a connected product and we have data. We know how many rides you’ve done. Every member that hits a hundred rides, it’s called their century ride and they get a tee shirt that they probably wear that says, “Hey, I’ve done a hundred rides,” and so we have that data, and I think where we’re going to be going with this over time is how do we get to predictive maintenance?

Jamie Beck: Because we know that, hey, this bike and this home has … similar to your car, it’s got 3000 miles and it’s time for an oil change, and so how do we utilize that data that we’re capturing to say, “Hey Mr. or Mrs. Member, we’d like to come out and do a bike tune up for you to ensure that you can continue riding. You’re someone that rides every day. We want to make sure that you’re not interrupted in any way,” and I think that’s the way that we’ll be able to do it. Another interesting component obviously is how can they interact with us without potentially even getting off their bike? So through the touch screen on the bike that enables them to access our full library of classes, is there a way just to contact member support? There are a number of things that we have in the bike where you can send data from the bike to our member support team if there is something going on, and so those are all areas that we’re exploring, but I think over the coming years, that’s where we want to get to, is being able to make sure that people that want to ride or run every day can continue to do that because we’re getting ahead of their potential problems before they happen.

Sarah Nicastro: Yeah. That’s a good point. I mean it’s the evolution of, of service. So if you look at, hey, it’s great if people call us and we’re there quickly and we fix their problems quickly and they have a good experience while we’re there, but what’s even better than that? What’s next is how do we predict those issues? How do we get ahead of that? How do we prevent them from even happening? So that makes sense to me. So as you look back at your time with Peloton and the huge potential that exists for the field operations division with the company, what’s the thing you’re most excited for in the future?

Jamie Beck: Yeah. I think our growth has been crazy in a good way, and I think that COVID is obviously … we’re one of the few companies that I think has, in a way, grown even faster due to what’s going on right now. I think what I’m most excited about is just the way that we continue to innovate as a company, and I think that’s at our core. It’s not just about innovation in products or content. It’s how do we innovate with field service as well? And so I think there’s a lot of opportunity to continue to innovate, whether it’s predictive maintenance or using the internet of things in order to make our company more successful.

 

Sarah Nicastro: Okay. So Jamie, in the time that you’ve been at Peloton, and as you look at what’s on the horizon as the field operations division grows with the company, what are you most excited about as you look at the future?

Jamie Beck: Yeah, I think, obviously, we continue to grow at a really rapid rate, but I think more than anything at our core, Peloton, we’re an innovation company. We happen to be in the fitness space now, but how do we think about innovating, whether that’s in hardware, in content, or even in field operations, and so how do we improve the member experience? And I think what excites me is there’s so much opportunity out there that maybe people aren’t doing today. For example, in the big and bulky delivery space, this high touch, white glove experience, not many people are doing that, and so we continue to use technology to even improve that level of experience. How do we use the predictive maintenance, the internet of things, artificial intelligence? I think there’s so much out there for us, and as a technology company, I think we’re in a position where we can harness that, because we’re using it in other areas of our business to bring that to our field operations team. That’s probably one of the things that excites me the most.

Sarah Nicastro: Yeah, and I mean 2014, it’s a relatively young company and it’s a hugely known brand. I mean the impact that you guys have made in a relatively short amount of time is just staggering. The other thing that’s interesting is if you look at the current situation that we’re in with COVID, I know that home fitness stuff has been one of the industries that has been positively impacted by what’s going on, and I’m sure that that creates some craziness for you all, I would imagine, with trying to keep up with that demand, but it’s giving you a chance to expand the footprint even further and to have a bigger customer base from which to consider, how do we innovate? How do we expand? And you’re right. I think the opportunities are really significant. So it’s a very cool story in a very cool company to be a part of. Last question I wanted to ask you, Jamie, is with your time at Peloton, leading the field operations function, what’s the biggest lesson you feel you’ve learned so far?

Jamie Beck: Yeah. Great question. When I started four years ago, I was the VP of Field Operations, and today I’m the VP of Field Operations. My team has gone from maybe 20 people to 2000 people though, and so even though my title’s the same, my roles and responsibilities have changed a lot, and I think one of our value statements as a company is to hire smart creatives and get out of the way, and we talk a lot about empowerment at Peloton, especially within the field operations team, and it goes down to if you’re a field specialist delivering a product and maybe you don’t have the answer, but you know it’s a good decision for the member, it’s a good decision for the company, and it’s a good decision for you, then make a decision. I think the worst thing that a member customer wants to hear is, “Let me check with my manager.”

Jamie Beck: And so I think the biggest thing that I’ve learned as a leader is to really step back and empower your team and trust them, and I think that goes not only to helping the member, but it really helps our team as well. You mentioned before engagement of the team. When you empower teams, they are so much more engaged and they are doing what you want them to do and more, and I think that’s the biggest thing I’ve learned is as we’ve grown in scale, putting people in positions that can do that and just continuing to step back and let them lead at their level has been the biggest lesson, and I think it’s going to be critical for us because our growth is only going to continue, and so making sure that we’re designing for that for the future as well,

Sarah Nicastro: It’s a really good point that you just made and it makes me think about how earlier you said that you aren’t at all prescriptive with what you want your field team to do or say on site. You want them to accomplish the objective of making the member happy and having them ready to go when they leave, but how they do that is up to them.

Jamie Beck: Correct.

Sarah Nicastro: So you’re not prescriptive and you empower them to make those decisions, and I think as we look at how do companies leverage field service more strategically, those are two really important points. It is hard to provide the type of customer experience you’re seeking to provide if you’re trying to tell someone exactly how to do that. “Here’s what you should do. Here’s what you should say,” and making them feel that they can’t problem solve on their own or they don’t have that empowerment to make decisions and not fear repercussions for acting in the member’s best interest. I think it’s not only important to consider how that approach benefits the customer experience, and therefore Peloton’s ability to use service strategically, but also for you to hire those type of people that you want to hire, giving them that freedom to be themselves and to do that job the way that’s natural to them, as long as they’re accomplishing those goals. I don’t think you could get those people and then be prescriptive with them. I don’t think they would be happy.

Jamie Beck: Agreed.

Sarah Nicastro: So I think those are really, really good points for people to consider. I think if you look at companies that have historically had a field service function, a lot of them are coming from a school of thought where it’s very efficiency, productivity driven, and therefore it is prescriptive and it is get in and get out and do more and do more, and those employees oftentimes don’t feel empowered to be themselves or to make decisions, and I think that there’s something from the Peloton story for those people to learn from today’s discussion, which is how do we evolve our thinking around what our service function means and how do we think more strategically and how do we empower those folks more? I’ve really enjoyed having you, Jamie. I think it’s an interesting story in a lot of ways. I really appreciate you joining us and sharing it today and would certainly love to have you back in the future and talk about how that service part has evolved and what’s new and what you’re learning. So thanks again for joining us and for sharing.

Jamie Beck: Awesome. Thanks, Sarah. Thanks for having me today.

Sarah Nicastro: Absolutely. You can check out more of our content by visiting us online at www.futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter @theFutureofFS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS Service Management Solutions by visiting www.ifs.com. As always, thank you for listening.