After Traci Morrow had her fourth child, she decided to lose some weight.
Using a 90-day workout program called Power 90, she shed 15 pounds. That was in 2003. Her enthusiasm later led her to become one of the first coaches for the Beachbody LLC company. She now earns as much as $16,000 in commissions a week. And she’s one of 450,000 coaches who have helped the Santa Monica company flex its muscles in the $100 billion-plus American fitness industry. The coaches promote the company’s workout programs and other products, and Beachbody has doubled its sales since 2008.
“It’s completely changed my life,” says Morrow, 40, who has since added two kids, bought a bigger house and purchased a more expensive car. “We are blessed beyond all measure.”
The company’s signature product is P90X, a 90-day “extreme” workout program designed for people who are ready for intensive exercise. For $120, a customer gets 12 exercise videos on DVD; detailed instructions on how to follow the program; a nutrition plan with eating guidelines; and, most importantly, lifetime access to the company’s website – Beachbody.com – for personal support and guidance from members, like Morrow, of the company’s amateur coaching team.
“The idea is to re-create the feel of an authentic gym without the commute or the hassle of parking,” said Beachbody Chief Executive Carl Daikeler, 47.
Other Beachbody programs offer variations on the theme.
The $120 Insanity program, he said, is designed to appeal to would-be athletes aspiring to participate in marathons or organized sports. Another program, TurboFire, is aimed at women who “love the group exercise atmosphere but don’t have time for the gym.” A third program – BodyGospel – uses Bible quotes and religious music to get churchgoers to work out.
In addition to the exercise programs – priced from $40 to $120 – the company sells accessories such as weighted gloves, chin-up bars, nutritional supplements including multivitamins and energy drinks, plus something called Shakeology – a meal-replacement vegetable-and-protein shake costing $4 a pop.
The products are marketed in two ways: one, through widely aired infomercials featuring videos of the workouts and before-and-after shots of exercise buffs, and two, the network of coaches who advise newcomers and promote the company’s products.
Daikeler said Beachbody spends about $100 million annually on the 30-minute infomercials. Currently, there are eight airing nationally, mostly in the wee hours on cable networks. An additional 10 are in production, with a total of 12 expected to be airing by next month.
In terms of money spent, analysts said, the company is the biggest infomercial producer in the health and fitness industry.
But Daikeler credits the company’s success to its tens of thousands of coaches serving an estimated 1.2 million customers nationwide. To become a coach, a participant must complete an exercise program and get an authorization from his or her own coach. The authorizing coach gets a percentage of the new coach’s sales under what the company calls a network marketing program. To get into business, coaches pay $40 to set up an Internet store and a monthly $14.95 maintenance fee.
They are expected to be available online to help new customers assigned to them, for which they earn a 25 percent commission on each $120 bag of Shakeology they sell.
“We are the first company that inspires people to stay in shape by providing a financial incentive,” he said.
Peter Davis, chief executive of Idea Health and Fitness Association, a San Diego trade group for fitness professionals, said the company has tapped into a desire.
“There are lots of people who would rather exercise at home and Beachbody does a great job reaching that segment by bringing more credibility and a wider breadth of sophistication to the infomercial niche,” said Davis.
However, he noted that many Beachbody programs are so rigorous that they’re not for the average person.
“The criticism you hear is that you have to be in fairly good shape to start,” he said. “The programs are very hard; you have to ease into them to not get injured.”
Most Beachbody coaches are not certified trainers, and Davis said it’s important that they don’t cross the line and give fitness instruction beyond encouragement and sales.
“If they bridge the gap between selling products and actually providing training themselves, I see some potential dangers,” he said.
Gregory Florez, a spokesman for the American Council on Exercise also based in San Diego, seconded that.
“The good news is that it helps with the old notion of ‘If I can do it, you can do it,’” he said. “The flip side is that if they’re not experienced they can dispense, at best, borderline information and, at worse, information that can get you hurt.”
Tom Mikkelsen, who left a well-paying job in Northern California to earn $60,000 a year coaching from his home in Lomita, downplays such concerns.
“I give them more support than advice,” he said of his customers. “I definitely give them a disclaimer up front that I’m not a doctor, nutritionist or certified trainer.”
The criticism doesn’t faze Daikeler, who believes the company has huge potential.
With sales of about $420 million last year – double the amount in 2008 – Daikeler expects annual sales to reach at least $1 billion by 2013. And his goal for the coaches: a million of them serving 100 million customers within five years.
“It’s kind of like a snowball,” he said of the company’s rapid growth. “What we’re doing is a really big deal.”
HEADQUARTERS: Santa Monica
CORE BUSINESS: Creating and selling fitness programs and related products.
EMPLOYEES: 345, up from 242 in 2009.
GOAL: To create new programs aimed at children, seniors and those with limited mobility in the foreseeable future.
THE NUMBERS: Sales have doubled in the last three years, to about $420 million for 2010.
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