4 ways SoulCycle built a cult following — and you can too

Customers of the popular and profitable SoulCycle fitness centers pay up to $40 per class to bike to music, and many of them gush that the exercise community has changed their lives. That is exactly what SoulCycle founders Julie Rice and Elizabeth Cutler intended.

Riders, who often pay $148 for a SoulCycle sweatshirt and $66 for a SoulCycle T-shirt, identify strongly with the brand because they report feeling transformed since the first time they "clipped in," or had their feet locked into the pedals. They say SoulCycle has ignited their self-confidence and overhauled their bodies.

Riders responded to a recent Instagram post asking what SoulCycle means to them, enthusing that the exercise class signified everything from "strength" to "therapy," "escape" to "community."

Devotees, it seems clear, feel like "warriors" who are part of a "tribe."

"We always say it's like yoga for people with ADD," Rice told CNBC at the Iconic conference in Boston at the end of September. "The music is blaring, everyone's on the same pedal, the lights are low, the candles are going and just at the moment that you think you can't make it any further your instructor, who is the spiritual guru of sorts, they give you one sort of line of encouragement: 'You can do it, you can be better than you thought you could be.'"

Turning your customers into ambassadors who profess to get their life energy from your product is advertising that nobody can buy.

Cutler and Rice struck gold when they opened the first SoulCycle location in New York City in 2005. They wanted to create a workout that they couldn't find, one that they wouldn't dread going to. 11 years later, the fitness franchise has 66 locations across the country and annual revenues topping nine figures, and SoulCycle has filed the paperwork to go public.

SoulCycle had revenues of $112 million, up from $36.2 million in 2012. Profit in 2014 was $26.5 million, up from $7.8 million two years ago. (Since the co-founders won't disclose more current company financials, these figures come from a financial document filed with the Securities and Exchange Commission ahead of the company's impending IPO.)

"We always say that a cult can be looked at as a positive thing. A cult is just something that people are really obsessed with because it makes them feel a certain way," says Rice. "Part of the addiction is that people feel they really matter in these communities."

Part of what gets SoulCycle customers amped is the chemical biological response of the body to endorphins that come with sweating, but it also feels good to be part of a community of like-minded people trying to improve their bodies and lives. "Their cardio health is improving, or seeing their bodies improve, their physical life is improving," says Rice, "but what really has transcended this experience is the emotional reaction that people have had to it."

So while some of the appeal of SoulCycle is unique to the experience of sweating in low lighting to loud dance music, there are lessons that can be learned from what Rice and Cutler built that can be applied to other businesses.

The first step to building a community is catering to your customers and really getting to know each one. Customer relations means much more than processing payments.

The SoulCycle founders, from the very beginning, were always "really listening to our customers, what they liked, especially what they didn't like and figuring out a way to turn any kind of negative experience into a positive. You can always find a yes in anything," says Cutler. The co-founders would make sure that every time a rider came into their studio, that person left happy.

In addition to careful listening, the SoulCycle founders introduced customers to each other, sparking friendships and building a network within the customer base.

"For example, when we were at the front desk — in the early days Julie and I worked at the front desk — and we would know you have a 5 year old and you're having trouble getting them to sleep in their own bed, maybe this person just did that and they came up with some solutions for that and just thinking about people's own personal experiences and how to connect those," says Cutler. "What happened in a lot of the studios is that if I rode on Tuesday, Thursdays and Saturdays, I would see my friends, people who became my friends."

SoulCycle started in New York City, and its founders knew that a common lament of Big Apple residents is that a city teeming with people can feel lonely.

"People in big cities really want to be a part of something, and so when we were working at the front desk, we made every effort to really connect our customers to each other and to us so that they became a part of something," says Rice. "Between accountability and the relationships that they formed, it became something that really was a founding pillar of our business."

SoulCycle trainers are rock stars in their own right. Their classes are sought after and customers elevate them to a near guru status. That's facilitated in large part by the way that Soul Cycle uses social media.

"In any business that sort of showcases personalities, like the trainers at SoulCycle, I think giving individual people a chance to really showcase their personalities and make that personal connection with the audience is very interesting," says Rice.

It also gives riders a way to get to know the trainers. "Especially as the business grows, it really allows our riders to make one-on-one connections rather than feel like sort of this big company is emailing you or Instagramming you, or you know, sending you a Snapchat."

In addition to featuring the trainers, SoulCycle features the stories of both famous riders and riders who have had transformative experiences. For example, in Beth Heller's SOUL story, she talks about how SoulCycle helped her learn to love herself again after her father's untimely death.

"For me, I had to deal with death at a young age and I struggled with confidence and body image. SOUL has helped me to acknowledge my self-worth and not define myself by a number on the scale," Heller writes. "Every time I get on my bike, I am reminded that I am in control and even when I do get off track, I bounce right back."

A sense of community comes pretty easily amid a small, upstart group trying something new together. It's harder to hold onto that feeling of community when the group starts growing.

"It's still a 'think global, act local' type of business," says Rice. "Every SoulCycle should feel like it's the SoulCycle. So whatever SoulCycle you are in, it's its own community, It's got its own devotes, it's got its own front desk staff, it's going to welcome you with open arms. It's got its own instructors that are gurus to that particular population.

"You have all these sort of little tribes within this big tribe but those tribes keep this business feeling really small and really personal and really connected."

Keeping a lot of those little tribes happy can add up to a popular, profitable, and rapidly growing business with more than $100 million in revenue.

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