Committed to creating weight loss transformations, Nutrisystem has undergone its own transformation since President and CEO Dawn Zier took the helm in November 2012. Then plagued by five years of decreasing profits and sales, fuelled by increased competition and the global financial crisis, under Dawn, Nutrisystem began to grow to the point where its revenues doubled and profits expanded sixfold.
With a focus on innovation, multi-brand development, customer insights and performance-based marketing, Dawn led the business into Fortune’s list of the Top 100 Fastest Growing Companies in 2017 and 2018.
A leader in the weight loss industry, over the past 45 years, Nutrisystem has helped millions of people lose weight through its safe, effective, science-backed weight loss plans. Each plan includes comprehensive support and counseling options for both women and men from trained weight loss coaches, registered dieticians and certified diabetes educators.
With a unique background combining engineering with direct-to-consumer and ecommerce marketing, Dawn has accumulated years of business leadership experience. “My training as an electrical engineer is one of the things that prepared me most for my role as CEO of a digital ecommerce company, because it’s all about numbers. That analytical mindset has been really helpful,” she notes. “Now, I always tell people to take something out of every experience, because you never know when you might need it down the line.”
“This was a tremendous growth phase for me professionally and personally, because I was running 26 different countries and so I was exposed to a range of new cultures. It’s one of the reasons why I’m such a big believer in the power of culture,” she explains. “Then in 2012, I was asked to move over to Nutrisystem, which was totally unplanned. This taught me to always keep your doors open and not be afraid to walk through them.”
Dawn says she was attracted to Nutrisystem for the very reason that it needed a turnaround. “It was a known household name, but its brand perception needed some dusting off. I looked at why it was struggling and believed that, with my background in marketing and ecommerce, I would be able to turn it around and inject some innovation,” she remarks. “I realized that while weight loss is a simple premise – calories in versus calories out – the way you communicate it to the customer is critical.
“I realized that while weight loss is a simple premise – calories in versus calories out – the way you communicate it to the customer is critical.”
I liked that Nutrisystem was backed by science, with real studies, and it delivered real results because weight loss is a lifetime struggle for some people. Two-thirds of the adult population in the US are obese or overweight and around 100 million people are trying to lose weight at any given time. So, I saw this huge demand and I knew I could make a difference.”
A plan to win
Dawn started her Nutrisystem turnaround with a four-point strategy centered on costs, innovation, marketing and distribution, and execution. “First, it was about getting the costs of the business under control. We stopped doing what we didn’t need to do, and started investing in what we did and, very quickly, identified about US$22 million that could be saved. We redistributed a lot of our efforts into technology and our ecommerce platforms to help us innovate and further grow. We found new ways and marketing strategies to reach more people, and we made sure to execute our plans.”
According to Dawn, the innovation arm of her plan started with clinical trials and research around the weight loss that customers could expect to achieve through Nutrisystem’s programs, and the results were fantastic. “We designed a program that involved a first week jump-start called ‘Fast5’, which helped customers lose an average of five pounds in their first week. Our studies showed that initial weight loss is a key motivator in keeping people on their weight loss journey, so this was big for us,” she explains.
Next on the agenda was the decision of whether to launch a Nutrisystem retail line. “The company was afraid of cannibalizing its existing product, which I thought was interesting because the existing product was failing,” Dawn observes. “My attitude is that because we work in a highly disruptive industry, if we’re going to be disruptive then we’re undoubtedly going to disrupt ourselves in the process.
“So, I made the strategic decision to go into retail and although it only accounts for around 5% of our total revenues, it gives us greater brand equity and visibility.”
Under Dawn’s reign, Nutrisystem also kicked its marketing efforts into the next gear, starting with its commercials.
“We changed the messaging in our commercials so that the value and benefit of the product was clear and we actually raised the price. From here, we could expand our reach to acquire new customers, while also focusing on retaining existing customers and driving lifetime value. These separate acquisition and retention functions have helped drive huge profits for the company, giving us room to reinvest in new marketing areas that we previously couldn’t afford – so, it’s been a major breakthrough.”
Leading with culture
As much as Dawn was eager to achieve external results, she knew that success started from within, so she set about creating a culture of accountability. “Understanding that everyone makes mistakes, this culture of accountability allows for imperfections while still driving ownership and fact-based decision-making. It took some time to settle into, but I’m pleased to say we’ve got it right.
Our conversations and decisions are backed by facts and numbers, and we’re able to give insights to support those decisions,” she explains. “F is for focus, A is for accountability, C is for customer-centric, T is for team-oriented culture, and S is for solution. That’s what ‘facts’ mean to us.”
Dawn’s next priority was to change the silo mentality within the business. “Our team is made up of sales people, customer service representatives, counselors and retention officers – but I realized that they weren’t sharing their consumer insights with each other. So, over the past few years we’ve managed to change the dynamic in the way that our call center team are a real asset to us, because they’re the ones speaking to consumers every day,” she notes.
“Their insights are now leading innovation within the business because we know what consumers want and we know where to meet them. If you look at the latest developments in the weight loss space, Nutrisystem continues to be a leader in innovation and strategic consumer marketing – we have a strong track record.”
“Nutrisystem continues to be a leader in innovation and strategic consumer marketing.”
To recognize the growing achievements of her staff, Dawn also implemented a performance-based rewards system. “I wanted people to be properly recognized for delivering their goals, and the staff quickly realized that this was no longer a company where they could coast along, but one that recognized and rewarded those who put in the extra effort and worked hard,” she explains. “So, this strategy helped us weed out the people who were not truly committed.”
Exploration and expansion
Dawn is excited to announce the success of Nutrisystem’s latest product, DNA Body Blueprint. “Customers are able to take a test and discover ways their DNA affects their metabolism and their ability to lose weight. The 30-page report they get gives them deep, personalized insights into all their nutritional needs and behaviors,” she explains. “We see this as a huge area of future growth for us because personalized nutrition is hugely popular
With the recent rise of the food delivery industry, Dawn is proud to say that Nutrisystem was delivering meal kits to American homes well before its competitors. “We’ve also launched a vitamin line, which helps us meet people at different points in their journey and we’re doing well in attracting men to the business,” she remarks. “We’re a multi-brand company so we’re always reaching new customers and, although our core focus is on weight loss, we have the means to help people achieve optimal health.”
“Although our core focus is on weight loss, we have the means to help people achieve optimal health.”
A businesswoman with a master’s degree from MIT, Dawn recently received the 2018 Ernst & Young Entrepreneur Of The Year award in the Retail and Consumer Products category. She’s also been recognized by Institutional Investor magazine as one of the best CEOs nationwide, and was named a 2016 Power Woman by New York Moves Magazine.
A sought-after speaker and industry expert, Dawn has appeared on multiple TV networks and radio stations nationwide and continues to appear as a guest lecturer at several leading universities. In addition to being on the Nutrisystem Board of Directors, Dawn also serves on the boards of the Hain Celestial Group and Spirit Airlines, and is a regular contributor to Fortune, The Huffington Post and Philadelphia Business Journal.
Four years ago, Dawn initiated quarterly strategic meetings with the leaders of the business. “We already had annual strategy meetings with the Board of Directors, but I believed that it was important for our internal leaders to meet to review business priorities and strategies that extend beyond what’s just happening tomorrow. This is when we formed our ‘Go Forth’ strategy,” she explains.
In line with this, in 2015 Nutrisystem acquired the popular South Beach Diet brand for US$15 million. “We felt that it wasn’t being properly represented in the commercial weight loss industry, so we shut down its retail channels and, in January 2017, launched it as a direct-to-consumer ecommerce product. Within the first year, we generated US$27 million in revenue and in 2018 it hit over US$66 million.
Already, it represents 10% of company revenues and it’s just getting started,” Dawn explains. “To do that, we set up a multi-brand platform infrastructure, which now allows us to layer additional brands and products onto our offering, giving us a lot of room for expansion.
“At the end of the day, we’re a mission-based company,” adds Dawn. “We want to transform lives in a meaningful way and it’s so rewarding to hear the success stories of our customers. Health is the new wealth.”