In 2006, SoulCycle opened its first studio in New York City in what used to be a funeral home. There were no signs on the door, but the lobby had a memorable energy. The company’s goal: inject fun into the workout experience through instructor-led, music heavy, indoor group cycling classes. Since then, it has created a tightknit community of devoted riders of all ages in cities across North America.
Melanie Whelan, CEO of SoulCycle, became the COO of the company in 2012. Since becoming its CEO in 2015, she has led SoulCycle’s growth in the U.S. and Canada to more than 90 locations and is preparing for SoulCycle’s launch in London in June. In each of the company’s locations, a consistent product and experience, combined with contagious energy in its studios, not only moves people and the world while democratizing fitness, but also brings SOUL to a global audience.
On Tuesday, March 12, 2019, Bloomberg Television’s Scarlet Fu sat down with Whelan as part of the Cornell Tech @ Bloomberg Speaker Series at Bloomberg’s Global Headquarters in New York City and discussed how customer relationships drive its business, the importance of a consistent customer experience, and how SoulCycle’s employees reinforce its brand values.
Whelan learned about entrepreneurialism while growing up in Baltimore in the early ‘80s. Her father owned transportation companies and messenger businesses and, as technology evolved, he exited and started businesses where he saw opportunity. Each day, he awoke at 5 AM to exercise – fitness was core to his routine – and then he’d commute to Washington, D.C., where his businesses were located. Her mother helped run payroll on their living room floor while she and her sister did their homework. On weekends, she helped her father set up offices.
No matter where the family took a vacation, her father always carried a cell phone – which was the size of a briefcase at the time – because he believed that, as the CEO of a company, if something went wrong, it was his responsibility to listen to his clients. He would always take a call when something escalated because he believed that people just needed to be heard. He might not be able to fix the problem, but listening to someone won that relationship for life.
“This sort of DNA of an entrepreneur is very much in my whole family history, and it’s really influenced a lot of the decisions I’ve made in my career,” said Whelan.
Subsequently, Whelan has embraced that spirit of hospitality throughout her career, during which she’s worked at Starwood Hotels and on the team that started Virgin America. As Vice President of Business Development at Equinox, Whelan was responsible for developing and executing brand and business extension initiatives. On the cusp of the financial crisis in 2008, while looking for strategic ways to drive the fitness brand’s growth –she was looking for companies Equinox could either buy or partner with – she discovered SoulCycle.
Rooting the Customer Experience in Hospitality
Pregnant with her first child, Whelan visited SoulCycle’s only location on the Upper West Side. The next day, she received a package – a SoulChild onesie in a silver SoulCycle retail bag – along with a handwritten note from SoulCycle co-founder Elizabeth Cutler thanking her for her visit. She immediately found it interesting there were no coupons or promotions in the package.
“What I really took away from it was this is something totally different – this is a community of people that really get it, and this is a group of people that really want to be part of something bigger than themselves,” said Whelan.
Equinox acquired the majority of the business in 2011, and Whelan joined as COO with the goal of growing the business from seven studios in New York City to studios in New York, Los Angeles, and San Francisco – all while maintaining that same sense of hospitality and connectivity.
“At SoulCycle, at our heart, what we really do is create a community space that’s all about hospitality,” she said. “What we really believe is that people want to be seen, heard, acknowledged, and appreciated.”
Talent is the Soul of the Brand
SoulCycle’s brand is deeply intertwined with its instructors and the energy they bring to their classes, and recruiting the right talent is a very high priority for the company. During SoulCycle’s recruiting process that’s been aptly referred to as “‘American Idol’ on a Bike,” recruiters look for the same 10 core values in future employees that SoulCycle’s leadership listed out eight years ago.
“We travel around the country, we pop up studios, we audition hundreds of people for every training slot that we have,” said Whelan. “The reason that being an instructor at SoulCycle has become a coveted career is because it’s exactly that – it’s a career.”
The fitness industry hasn’t historically given instructors a place to call home because they’re constantly hustling versus investing in one place. SoulCycle offers its instructors full-time salaries, health benefits, paid vacation, and retail allowances – staff costs are about 45% of revenue. They also offer them career trajectories, and many instructors have become training officers, scouts, and managers of other pieces of the business.
As a result, SoulCycle has experienced very little turnover. This is not only because the instructors have helped build the business, but also due to the high level of quality control around the brand’s growth, which has been very disciplined and measured.
“We invest just as much in the ongoing operation as we do in the future of the business and the brand because we want to make sure that our riders stay with us day in and day out,” explained Whelan. “Ultimately, I believe a brand is a promise, and your promise is only as good as your product, and our product is people – we have to make sure that we have the right people in the right seats to deliver that promise.”
A Unique Customer Relationship
SoulCycle classes provide an inspirational trainer-led, music-driven moment. It’s an opportunity to get in a room with 60 other people, listen to music and have an instructor tell you that you can be stronger on the other side of this hill.
“[Our instructors] share these lessons in life, which you think are just coaching you through the bike, but are actually things you can take out into the world,” said Whelan. “Riders take these messages to help them face their problems at work, home or within other parts of their life.”
Outside the brick and mortar experience, SoulCycle seeks to provide a whole lifestyle. One such way is through a vertically integrated retail business so riders can take a piece of the experience home with them. In the last 18 months, SoulCycle has built a team to create its own athleisure products.
“It was really important that we, from the beginning, build a product suited for our workout, co-authored by our instructors and our riders, to be best for our workout, but also best for their lifestyles,” said Whelan. “We birthed something called ‘Soul by SoulCycle’ that we’ve launched in our own studios, and we just partnered with Nordstrom on a wholesale distribution partnership.”
Connecting Throughout the Other 23 Hours and 15 Minutes
Classes are only 45 minutes a day, so Whelan and her team are constantly looking for ways SoulCycle can meet its riders outside the studio throughout the day. This could be through its retail products, inspirational text messages, an Apple Music playlist layered with inspirational coaching, or an experiential concert – the first concert was held in Harlem, and others in Las Vegas and Los Angeles.
While riders put their mobile devices down for the 45-minute classes, SoulCycle’s sign-up process and hospitality platform is tech-enabled to provide a seamless experience. This also helps the brand understand who and where its riders are.
In the future, the brand could add streaming classes or at-home bikes, for example, to further enhance the experience. While other players in this space utilize leaderboards, SoulCycle looks for other opportunities to provide more information to riders about their performance as a way of enhancing its customer experience.
“The core of our ridership comes to disconnect,” said Whelan. “Now, if we were able to tell them more about how they performed, and they were able to opt into it, maybe that’s something that they would want. Sometimes consumers can’t articulate exactly what they want, and you have to show them what they want over time, but we’ll be very mindful in terms of how we do that so that, for those in the room that really just want that tech-free experience, we will always have that for them.”
You can watch the entire discussion below: