Here's How SoulCycle Keeps Customers Paying $34 For A Spinning Class

SoulCycle just might be the hottest thing in fitness right now.

On a typical day, some 6,000 people will slip on their spinning shoes and climb atop a stationary bike in one of SoulCycle's 25 studios across the U.S. The lights will dim and, for the next 45 minutes or so, riders will surge up in down in sweaty, unified motion as the instructor barks out commands and inspirational sayings over the throb and sway of the music. Most of them will pay upward of $34 for one class.

Part boutique exercise class, part dance rave, part cult, SoulCycle is a carefully marketed and differentiated exercise service. Its challenge? To grow its following while keeping loyal customers coming back for more pricey spin sessions. For that reason, the target SoulCycle customer is not just someone who wants a workout, but someone who yearns to take part in a communal experience that is at once trendy, energized, and healthy. To go to SoulCycle is to be young and hip.

SoulCycle advertises itself as a full-body workout that has "revolutionized indoor cycling and taken the world of fitness by storm." The company currently has 18 locations in New York and seven in California, and is planning studios in Massachusetts and Washington D.C. It boasts an 85% retention rate among riders, and revenue has risen 60% each year since 2010.

Its social media metrics are similarly impressive. SoulCycle has nearly 30,000 followers on Facebook, another 25,000 followers on Twitter, and some 23,000 followers on Instagram. Its digital strategy is a simple extension of its feel-good branding. Online, the company posts stories and responds to tweets with a cheerful, upbeat persona and a liberal dose of exclamation points and smiley faces. It also recently launched "Soul Tunes" to compile the hottest hits from the studio and share them through a Spotify profile.

All in all, SoulCycle has come a long way since co-founders Julie Rice and Elizabeth Cutler opened their first studio in a Craigslist sublet on Manhattan's Upper West Side in mid-2006. The building didn't have a front desk and wouldn't allow them to post an outdoor sign, so at first the pair struggled to market their company. They handed out fliers and gave away tons of free classes to bring in riders. But Rice and Cutler also saw SoulCycle as filling a fitness niche in New York and, because of that, trusted that people would come.

"Elizabeth and I started SoulCycle because we were actually the customers - we were looking for an exercise experience that was going to be fun, exciting, challenging," Rice explains. "There were a lot of workouts, but there was really nothing out there that was efficient, that was joyful, that was about community, that was something that you really looked forward to."

Joy, fitness, and community. That was the central philosophy that Rice and Cutler emphasized again and again to would-be riders. It was also their answer to the most commonly voiced skepticism: "I could do this for free at my gym. Why would I come to you?"

It is, undoubtedly, a fair question. SoulCycle is many things, but cheap is not one of them. The regular single-class price is $34. Add in the $3 shoe rentals (you need special cycling equipment to participate) and a $2 water bottle, and you've hit $39 a session. By comparison, plenty of spinning classes in New York can be found for closer to $25 apiece.

SoulCycle also doesn't offer monthly passes, and its multi-class packages are barely discounted: 5 for $165 (that's $33 a pop), 10 for $320 ($32), 20 for $600 ($30), and 30 for $850 ($28.33). Those packages also come with expiration dates, so it's use it or lose it.

Why are SoulCyclers willing to spend so much? "People value what they pay for," Cutler says. "If someone pays to take that class, they are going to come in and work so hard that the energy in that class is going to be epic."

Rice points out that money spent on one SoulCycle class could as easily be thrown at two or three cocktails in New York. "It is so easy in this city to spend dumb money on things that don't matter," she says.

Customers certainly have bought in. Just six months after it opened in 2006, SoulCycle had long waiting lists, and the first studio became profitable. Its rider base has since expanded from mainly 30-something moms to men, teens, tweens, and even the elderly (one customer is 89). Its merchandise line now features dozens of items, including sweatshirts that retail for $125 and tank tops that go for $54.

"We used to say to people, 'This is really different; this is going to be an experience that you'll remember,'" Rice says. "[SoulCycle] will change your attitude about fitness."