The Beachbody Company, Inc. (NYSE:BODY) Q4 2022 Earnings Call Transcript

But we’ve got this same, what we call the BODi Block construct that they get to market month after month after month with a new wave of plans dropping the first Monday of every month. But it’s the same construct, we will create velocity. So you got these two layers, right. First, priority, maximize sell through into the current subscriber base so that they understand the value that they’re getting. And second, leverage the great experience. And referrals through the partner network for incremental subscriber adds at a guaranteed payout. And that’s the business model that we’ve been running, really for the last 15 years. But now it’s more simplified so that the partners can be more efficient.

Marc Suidan: Yes, and John, this is Marc. Let me just add to that. On the rebranding part, when we add up our social media followers or super trainers followers, our key coaches, it goes to well over 20 million. And then our e-mail database is over 10 million. So our ability to inform people and turn it into an opportunity to tell them who we are now and where we’re going is not something that requires marketing spend. We’re able to do it via our existing mechanisms of budgets.

John Heinbockel: All right, then my follow-up would be you talked about the nutrition attachment rate. I think in the past that was, I don’t know maybe in the mid-teens or something like that. Where do you think that goes to? And then what happens to the — and I know there’s a bundle here, so maybe it’s hard to parse out a nutrition ARPU, right. But I think the nutrition ARPU right in the past was quite high. Does the attachment rate go up and the ARPU go down a fair bit, or no?

Marc Suidan: Yes, John, look, you’re right. Historically, it was in the very high teens. Right now, it’s I mean, if you just take the numbers, it’s around that 10% mark. We got to bring it back to where it was and everything we’re seeing like I said earlier, the BODi file size is growing well, and the nutrition attach rate is where we want it to be, and I say that in a favorable way. And on the ARPU for nutrition, it is around, I want to say $100 to $110 a month on average for a subscription. And two-thirds of that business is subscription. One third is one-offs that through CRM and other campaigns we do or other products they want.

Carl Daikeler: Yes, and John, I will add, if I can add that our CRM activities are literally of my role, my top four priorities, CRM of selling nutritionals, and particularly this idea of expanding Shakeology into the healthy dessert category is one of my top four priorities. Another one of my top priorities is to maximize sell through of our number one supplement, and that is our pre-workout Energize, which I happen to have twice a day. It’s my morning coffee, and it’s my afternoon pick me up. And we’re seeing that through the really, that gets traction through the entire database. We’ve got consultants who have been helping us install what we call CRM sequences that once you install them and you understand what a five or six e-mail sequence what that productivity and return on that sequence can be, you install it and let it run.

So somebody cancels or somebody lapse or pauses or changes flavor like we’ve got a sequence that runs, it communicates with those people in a way that now becomes predictable, additional revenue retention or additional LTV. So this is a priority. And we traditionally see a decline in the nutrition files just from Q3 to Q4, the fact of the simplification of the business, like I said in my opening remarks, we’ve moved it from 190 different configurations that our prospects had to wait through to five. And we’ve also added a new SKU, which is 20 servings of Shakeology and 20 servings of Energize. This is being used in a couple of ways. One, it’s a holistic product for people so they can get both of these things and not have pantry loading, meaning they’re not going to be at the end of the month, still haven’t burned through their product.