Written by: Vickie Sullivan | April 05, 2022
Peloton’s Fall Has Lessons for All Businesses
Wow! Peloton has taken a mighty fall. In 2020, the company surpassed $1 billion in quarterly sales during the last three months of the year and its stock was a sure bet. Now, in 2022, sales have plummeted, safety concerns caused models to be pulled, the company cut its annual revenue forecast by $1 billion, and the company is weathering bad PR because an actor (Chris Noth) included in one of its ads.
A Vox article about Peloton’s sad situation points out a bigger question we all need to heed. What’s the difference between a temporary surge in demand and a long-term upswing?
Are You Experiencing a Short-Term Surge or a Long-Term Increase?
Small- and midsized business owners face the same dilemma. To avoid this trap, here are two things to discern whether you are experiencing a short-term surge or a long-term upswing:
• The reasons for the surge. It’s easy to confuse a temporary change in the market with your work being the next big thing. Are the circumstances behind the change based on fleeting interest? In Peleton’s case, the company assumed its strong fan base and marketing drove increased sales. That assumption led to costly mistakes. Lesson: Don’t believe your own press.
Listen: 2 False Stories We Tell Ourselves During Good Times
• Opportunities beyond the initial purchase. When times are good, business owners rarely take that dreaded short trip to the dark side. But you need to ask the hard questions: What else do your buyers want after buying what they need? Do you have enough offers that a committed fan base will buy? If you have more viable options after the big initial purchase, you can build upon that big first buy.
We all love it when changes in the marketplace create a big demand for our work. The key is to be clear about those changes so you can tell the difference between a stroke of temporary luck and a long-term trend on which you can build your business.
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