The Beachbody Company's "Sticky" Business Model - 96% MoM Retention Rate Showcases How It's Delivering With BODi Platform
Detroit, Michigan
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January 17, 2024 09:00 AM Eastern Standard Time
By Meg Flippin, Benzinga
Fitness fads come and go, but The Beachbody Company’s (NYSE: BODY) business model seems to have stood the test of time, delivering exercise and nutrition programs to countless households across the country for the last 25 years.
That’s not to say there haven’t been tough times for the company that now goes by BODi, but through it all it has been able to retain many of its customers, showcasing just how sticky its business model is. And that’s even with gyms reopening after the COVID-19 pandemic ended. Many people still prefer to work out at home, and it's showing in BODi’s results.
96% Retention Rate
Take its month-over-month retention rate for starters. It's at 96%, which means only 4% of its customers don’t come back for a workout or nutrition advice the next month. Its digital platform BODi, which was revamped and rebranded earlier this year, is seeing double-digit growth. In the third quarter premium digital subscriptions for BODi grew 27% quarter-over-quarter, exceeding 900,000 subscribers. Meanwhile about 60% of subscribers of its legacy Beachbody on Demand platform have renewed with the new BODi offering, exceeding internal expectations.
To keep customers coming back and to reach new ones, BODi is embarking on a marketing blitz and offering potential customers unprecedented access to its over 120 workout and nutrition programs. Through its new subscription tier BODi Previews, potential customers can sample more than $59 worth of BODi content for free including popular workout programs P90X, Insanity, 21 Day Fix and #MuscleBurnsFat. Users also get access to nutrition guidelines and positive mindset content.
After four months of testing various workout applications, the CNN team recently crowned the BODi application as the best workout application in 2023.
Marketing Blitz Underway
What BODi thinks makes it so appealing is that users aren’t required to provide a credit card to access the free content. All they have to do is provide an email, and then they can sample the programs before committing. The company is also offering a two-week sample called “The 14 Workout Challenge,” which gives users a taste of some of its popular programs on BODiPreviews.com.
Recognizing that YouTube can be an effective way to reach new fitness enthusiasts, BODi is launching a limited version of BODi Previews on YouTube, providing access to a wider audience. During the third quarter, BODi also launched affiliate distribution with Rakuten and Cartera, offering consumers new opportunities to earn rewards when they shop with BODi and its Refer a Friend pilot, enabling the company to give incentives to those who refer friends to subscribe to BODi.
Financials
All of these efforts are starting to show in the company’s financials. In the third quarter total revenue was $128.3 million. Digital revenue came in at $64.3 million, with a total of 1.38 million digital subscriptions, while nutrition and other revenue was $59 million. Connected fitness sales ticked up in the third quarter and came in at $4.9 million. About 6,500 exercise bikes were delivered during the three-month period that ended in October. Overall revenue may have been down year-over-year, but it was in line with the company’s guidance and is growing again as the company revamps, overhauls and cuts costs out of the business. With a high retention rate, the company is optimistic things will only get better in the months to come.
"We are pleased with our third-quarter results, with revenue, adjusted EBITDA and cash used in operations once again within our guidance range. We are encouraged by the advancements we have made in our company transformation, particularly in our cost reduction efforts and reinventing our digital platform,” said Carl Daikeler, BODi’s Co-Founder and Chief Executive Officer when reporting third-quarter results. “For the remainder of the year, we are intensely focused on the execution of our sales and marketing initiatives, which we believe will drive activation, engagement and increased efficiency. Our turnaround is in place and we are building towards increasing liquidity and driving revenues that are more profitable.”
To learn more about BODi and The Beachbody Company, visit their website.
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