The weight loss industry is just huge, with the annual revenue of the US weight loss industry some $61 billion. That means lots of businesses are cashing in on obesity, as 108 million people are on diets in the US alone at any point in time.
How lucrative is this business? Just look at how much celebrities are paid to endorse major weight loss programs. The fee is as high as $3 million, ABC News reports.
One of the companies doing exceptionally well in the industry is Weight Watchers, a weight management system that has become a veritable way of life for millions of people across the globe—from the US and China to Europe and New Zealand. It's a case study of how savvy marketing can propel a company to the forefront of its industry.
Weight Watchers is clearly the dominant company among weight-loss centers and programs, banking north of $1.2 billion each year. It is at least three times larger than its primary competitors, Nutrisystem and Jenny Craig. Weight Watchers has some 8 million website visitors per month and 1.72 million paid online subscribers.
Below are Weight Watchers' Income Statements for the years December 31, 2009 through December 31, 2012:
So what are the company's marketing secrets? Let's take a look at six savvy principles Weight Watchers has implemented to solidify its position at the top of the weight-loss stack.
1. Give them what they want, not what they need
We are driven by our desires. We buy expensive fast cars because we crave the "success" image associated with them, not because they are a sensible mode of transportation. We want iPhones because they are a status symbol, not because of the crystal clear voice reception. Same with Jimmy Choos, and Louis Vuitton bags. Sales of such products are all driven by wants.
Weight-loss products are no different. We may know that the key to losing weight is to cut out junk food and eat more vegetables. But that's not what we want. We want to be able to eat our donuts and drink our Frappuccinos. And, smartly, Weight Watchers lets us do that.
According to the Weight Watchers PointsPlus system, members have a daily PointsPlus total based on their gender, weight, and activity level, as well as a weekly PointsPlus allowance that allows for fluctuations in daily eating. For example, if you go out to a restaurant for dinner and surpass your daily PointsPlus allowance, you can dip into your weekly reserve without worry, so long as you don't surpass your weekly allowance as well.
That's a brilliant move on Weight Watchers' part. Essentially, the company is telling members,
"Go ahead and eat that donut or drink that Frappuccino. As long as you're within your PointsPlus limits, you'll lose weight."
2. Market the feelings, not the product
When people buy a product, they are paying not for what the product can do for them but what feelings it can give them. Entrepreneur Jeff Barnett explains.
"Consumers are ultimately paying for feelings."
Weight Watchers has figured out the ultimate feeling that dieters long for and has enabled it. What do dieters want? They want to feel good. They want to avoid pain. They want to enjoy the food they like. In short, dieters don't want to feel deprived. And that's what Weight Watchers communicates to its target audience through the voice of celebrity singer and spokesperson Jennifer Hudson, who dropped over 80 pounds:
- Jennifer Hudson: "At this point I feel I can do anything, I feel good."
- Jennifer Hudson: "I feel so comfortable in my jeans…it makes me love myself that much more…loving and free to eat what I love…loving and free to live my life"
3. Let them join for free
A "Join for Free" campaign is always friendly to prospective customers. Weight Watchers lets people attend a free meeting near them. If after the meeting they decide to sign up, they are allowed to receive educational materials. As market analyst Tony Rossel explains, this "opt in" strategy can result in up to a 30% conversion rate.
Consumers react well to this type of strategy because they feel no pressure; and once they see the educational materials and products at a meeting, they want them.
That contrasts with "force free" trials, in which people who didn't request something are given a free trial and then asked to pay after a certain period of time, or "negative option force free" trials, in which customers are asked for credit card information before they get the trial, and then must proactively cancel.
Both of those methods can leave a bad taste in the mouths of consumers since they are more pressure-filled.
4. Make the solution look complicated
Weight Watchers makes eating look complicated. Rather than relying on regular-old calorie-counting for foods, Weight Watchers now uses the PointsPlus system.
It used to rely on calories for its points totals. The problem was that fruits and junk food would be given the same amount of points if they had the same amount of calories (and you know which one is better for you to eat). The current PointsPlus program is much more complicated, and based on a sophisticated mathematical formula.
The company relied on its "nutrition specialists" to develop a system that takes into account how foods are broken down in the body. It all sounds too complicated for any layperson to figure out, so people feel they have to go to Weight Watchers, since the company has the inside scoop on weight loss.
In reality, the PointsPlus system is based on basic food and nutrition science. It's nothing new. Yet, serving a solution that sounds complicated, and more like a "discovery" rather than an old principle, makes customers feel they have to buy. It is a brilliant marketing strategy.
5. Create exclusive products
In addition to just promoting the PointsPlus system—the solution to being overweight—Weight Watchers offers exclusive products to facilitate the implementation of its solution. Those products make it easier for people to follow the program. For example, it sells PointsPlus calculators. It also makes available snack bars, yogurts, ice creams, and other foods that have the PointsPlus value right on the box.
Moreover, it sells food scales that tell consumers the PointsPlus value of their food rather than the weight. People snap up these products because they make the Weight Watchers (complicated) system simple to follow, since they won't have to do any calculations or look up values on their own.
6. Actively court a new audience
Some 90% of dieters are women, as are 90% of Weight Watchers clients. However, the company has noticed growing interest among men to lose weight and so is capitalizing on that interest.
But Weight Watchers isn't pushing its bread and butter—center-based meetings—to men. Instead, it's promoting its online tools and mobile-based apps. Because men generally try to diet on their own, such as joining a health club, or controlling their food intake, Weight Watchers is anticipating that they will be more drawn to these tools than the meetings.
To better target the men's market, Weight Watchers airs commercials during the NBA playoffs. Obviously, the male audience is worth the $1 million per minute advertisement cost.
Overall, Weight Watchers has risen to the top of the weight-loss industry because it has been so smart in the marketing of its products. Other companies in this market—and even in other industries—can learn a valuable lesson from the granddaddy of weight loss programs by following these six marketing principles:
- Give your customers what they want, not what they need.
- Market the feelings, not the product.
- Let them join for free.
- Make the solution look complicated.
- Create exclusive products.
- Actively court a new audience.
Weight Watchers Company Overview and Performance
Weight Watchers' smart use of televison commercials with famous celebrities with weight problems (Charles Barkley, Jessica Simpson, Jenny McCarthy, Jennifer Hudson and others) who benefited from Weight Watcher's weight-loss program, give the company instant creditability with its customers.
The high awareness and credibility of the Weight Watchers brand among all types of weight-conscious consumers—women and men, consumers online and offline, the support-inclined and the self-help-inclined—provide the company with a significant competitive advantage and growth opportunity. As the number of overweight and obese people worldwide grows, the company believes its global presence and brand awareness uniquely positions it to capture an increasing share of the global weight management market through its core meetings business and its WeightWatchers.com business.
In the 50 years since its founding, Weight Watchers has built its meetings business by helping millions of people around the world lose weight through sensible and sustainable food plans, exercise, behavior modification and group support. Each week, 1.5 million active members attend over 40,000 Weight Watchers meetings around the world, which are run by more than 10,000 leaders—each of whom has lost weight using its program.
The company is constantly improving its scientifically-based weight management approaches, and they are one of only a few commercial weight management programs whose efficacy has been clinically proven. Its strong brand, together with the effectiveness of its plans, loyal customer base and unparalleled network and infrastructure, enable them to attract new and returning members efficiently. Its customer acquisition costs are relatively low due to both word of mouth referrals and its efficient mass marketing programs.
Weight Watchers' has also demonstrated that it has strong management. It's packaged weight-loss meals have generated $1.8 billion in gross revenues and a gross profit margin of 59.27% for the year ending December 31, 2012. Incidentally, gross profit margins have increased consistently since the year ending 2009 when they were 52.0%. Total meeting fees for year ending 2012 were $934.9 million (51.2% of total gross revenues), a decrease of $55.4 million, or 5.6%, from $990.3 million in the prior year. Marketing expenses for year ending 2012 were $343.5 million, an increase of $51.2 million, or 17.5%, from the year ending 2011. After deducting total operating expenses, the company generated a pre-tax profit of $416.96 million in the past year -- an impressive 22.82% IBT.
Weight Watchers' operates both company-owned and franchised meeting centers. It's producs are distributed through a number of channels from independent sellers to major consumer retailers and supermarket chains.
In the year ending 2012, consumers spent $5 billion on Weight Watchers branded products and services, including meetings conducted by the company and its franchisees, Internet subscription products sold by WeightWatchers.com, products sold at meetings, licensed products sold in retail channels and magazine subscriptions and other publications.
How Weight Watchers Uses Social Media
Did you know that the first social media platform Weight Watchers used was MySpace in 2008? It then launched Facebook and Twitter in 2009. Today the company has both an internal team and an agency that provides social media support. SocialTimes recently caught up with Lee Hurley, vice president of social media at Weight Watchers to discuss the company’s social media goals, strategies, the platforms it uses, and the analytics program it’s thinking about building. Here are excerpts of the conversation:
How important is social media in terms of the mission of Weight Watchers?
It is actually a crucial part of it. We were pretty much a born social brand, a community from the start. So, the ultimate goal of the company is to really help people to adopt and sustain a healthy way of living for life…. So, [before] that largely happened offline when you saw somebody when you were offline and you were like, hey, you look amazing, what did you do? That’s where the Weight Watchers discussion started, and now with people posting photos and sharing their success, a large portion of that actually happens online. Moving to digital is a really important part of the mix.
What are Weight Watchers’ social media goals and strategies?
One big one is extending our service strategy to social. So, that’s timely brand-to-consumer engagement, which is providing ongoing support and motivation. Through Twitter, Facebook, even on our website, we get questions every day. The other one is really continuing to innovate on increasing social sharing by allowing people to share what they’re learning, doing and loving on the program. We create pretty much exclusive content in social, whether it’s tips, quotes, success stories, recipes.
On our Facebook page, even though we put out a ton of content – we post usually three times a day. There are thousands of people posting all the time, connecting with each other, answering each other’s questions.
Have there been any specific social media campaigns or types of content that are more popular that you’ve seen more engagement from?
For the “I’m Only Human and I Did it Project,” which we only launched in December, we’re getting a lot of positive responses for that. This is real people sharing their stories of struggles before Weight Watchers and what their life was like, and then the success they have found at Weight Watchers, on YouTube. We have had over 2 million views of those videos.
Weight Watchers has over 1.2 million fans on Facebook and nearly 200,000 on Twitter (Click Image To Visit Facebook)
We had a social media campaign called Lose-A-Palooza, which had gotten tons of engagement and very large reach.
We have a program called Lose for Good, and we have done that for the past five years in the fall. As members and subscribers lose weight, Weight Watchers donates up to $1 million to Action Against Hunger and Share Our Strength. Lose-A-Palooza was a one-day social media event to help bring awareness and engagement with that program. For that day, every single engagement we were donating $1. That was widely successful, and I think largely because it was tapping into things that people ordinarily do. We have done live chats with [fitness and health expert] Jennifer Cohen. We were streaming exercises on our Facebook page, and then we did a live chat with her after, which got a lot of engagement.
What tools do you use to measure social media campaigns?
For monitoring and publishing, we have NetBase and Spredfast. We track a lot of our links through Atlas. We look at a lot of tracking that way because that goes all the way to conversion. We are constantly looking at tools to help with efficiency and effectiveness in terms of publishing and hooking into develop a true social CRM model.
I think ultimately we are looking to build an analytics program that would actually tell us, our people who engage with us on social, are they losing more weight, are they more successful? Everything that we’re doing on Twitter and Pinterest and Facebook – even with all the tools that we currently have today – aren’t going to give us that pass-along and word-of-mouth amplification. So, we are looking at different ways of helping us get to the true answers of ROI broadly.
You mentioned Pinterest – Weight Watchers is also on Pinterest, right?
Yes. We have a presence on Pinterest. Recipes I think are the No. 1 thing. Food is very important. We also have inspiration boards and such, but recipes are the most popular.
Is Weight Watchers looking at any other social media platforms?
We have a presence on Tumblr. Last year, we had a contest – 365 Reasons to Believe – and they are all archived on Tumblr. For us, it’s not just about what are the new platforms, but, how do we have a meaningful presence? With Instagram, it’s how might we do a campaign leveraging ambassadors and influencers there versus just having a Weight Watchers Instagram page, because that may not make the most sense.
Courtesy of an article dated March 28, 2013 appearing in MarketingProfs and an article dated March 22, 2013 appearing in Social Times and Weight Watchers International, Inc. SEC 10K Annual Report for 2012