Fitness Company Gradually Builds Customer Base and Turns Failure Into Eventual Success

Starting a business is easy, but creating a commercial success is sometimes a process that takes an unexpected path. That’s what Carl Daikeler learned when the first effort by his new company was a complete dud. Eventually, he turned the failure into an organization with sales of $700 million.

In 2005, Daikeler introduced a set of fitness DVDs called P90X with an infomercial company called Beachbody. The product went nowhere. Home shoppers were completely disinterested in spending $120 for a the DVD product that pushed six days per week of strenuous physical activity. Only a few sales were completed. But, after factoring the cost of the infomercial, the cost per order was $250.

Daikeler realized that people wanted easy fitness solutions – even if they didn’t accomplish any results. By contrast, his company was selling hard work. Instead of accepting defeat, Daikeler simply adjusted his marketing. Changes were made to the P90X infomercial and results were tested in select markets. The company conducted focus groups to discover that people didn’t understanding the purpose of certain equipment types. The infomercial added testimonials, including YouTube videos made by product users. Gradually, the cost per unit sold began to decline from $250 to $190.

Along the way, Daikeler faced his detractors. They kept telling the entrepreneur to give up trying to make the product successful. Where others saw failure, Daikeler saw progress. Finally, in 2007, the 22nd version of the infomercial produced sales that resulted in unit cost of $50.

Unsolicited celebrity endorsements soon followed. Daikeler learned that users of the P90X included Sheryl Crow, Jennifer Aniston, and Ashton Kutcher. They spoke publicly about the P90X without Beachbody paying anything for the acknowledgements. Daikeler and his partner, Jon Congdon, also learned that their company’s product was used by some players on the Philadelphia Eagles and Secret Service agents.

Beachbody required a long time to establish itself with the P90X product. As many entrepreneurs learn, patience is often required to turn a new company into a success story.