After a “Failed Launch” in 2005 – P90X Fitness Program Earns Revenue of $700m

Inc. Magazine just did a great story “The 22nd Time is the Charm” on entrepreneurship, failure, perseverance, and finally success. When Beachbody first launched the P90X home fitness DVDs in 2005 the product was a huge failure: it was costing too much to make and the sales were dismal. By the end of that year the company’s revenues had sunk from $100m to $83m. With all of the production and marketing expenses involved in launching the product the per order costs were at roughly $250 (much of this due to sizable fixed costs and low sales volume) and they were only selling the DVDs for what they thought customers would be willing to pay at $120 per set – obviously not a sustainable business model.

Beachbody had been founded in 1998 as an infomercial / marketing company that sold DVD fitness programs and health supplements. A couple of their other products include the “Brazil Butt Lift” and “Hip Hop Abs” DVD fitness programs. While they were still making money from their other products the thought must have crossed their minds to pull the plug on this new initiative. Amidst this adversity the founders still had faith that there was a great opportunity with this new product. They continued to get their costs down and they continued to hone in their marketing campaign. In 2007, after 21 consecutive “failures” in finding the right marketing message, the 22nd version of their infomercial was the hit they were looking for!

By 2009 product sales were climbing and they were getting feedback that celebrities were promoting their product unsolicited – Sheryl Crow, Jennifer Aniston, Ashton Kutcher, and some of the Philadelphia Eagles players were all using P90X to get in shape and build their endurance. Although Beachbody is not a publicly traded company so we cannot verify their financials, they have stated that their P90X product has earned them over $700m in sales… a far cry from their “failed” product launch just seven years ago.

A few questions for thought:

  • How would the initial failure of P90X been received in your company?
  • Would you have continued to invest in a 22nd infomercial after two years of stagnant sales?
  • If this were a public company that had to report quarterly sales numbers would executives have been as patient?

A few factors seem to stand out from this great example of a long road to success:

  • The founders were confident that it was a great program and were willing to invest in making it succeed
  • The company had a track record with this type of product and they understood the critical drivers for success: the Product Costs and the Marketing Campaign
  • The company continued to take away what they had learned from their failures to improve their product offering – costs continued to come down and the infomercial continued to improve based on customer feedback

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