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Weight Watchers Latest Attempt to Win Back Customers and Why it Will Fail

By: (Google+)

Well, it's December and the weight loss industry is lining up at the starting line of another weight loss season race to win over new (and old) customers. There are the usual faces in the pack, like Nutrisystem and Jenny Craig but this year there are dozens of fresh new faces on the starting blocks. In recent years, wearable fitness technology like FitBit, Jawbone and all that new smart watch technology have married with free (or next-to-free) online/smart-phone applications to give the traditional weight loss old-timers a real run for their money.

In the middle of this pack is Weight Watchers. They have been around for over fifty years! As the senior member of in the race, they are accustomed to being a leader and trendsetter, not the tired old has-been. Yes, I just called Weight Watchers, the granddaddy of weight loss, a has-been. Why you ask? Well, they have seen this race coming for a long time and they just let the competition slip right around them. Short and simple, Weight Watchers has failed to adapt to rapid changes in an industry that they helped to create.

The Weight Loss Industry Has Changed

Wearable fitness technology has exploded in the past 2 years and Weight Watchers has missed the boat. FitBit is a very real competitor for Weight Watchers even though they seem to be in another industry altogether. The graphic below demonstrates the Google user searches for the two brands going back to 2005 (four years before Fitbit came into being). Weight Watchers seems to have peaked while FitBit is still gathering steam. We can only imagine how this chart will look this time next year.



FitBit Versus Weight Watchers Trend



And the outlook for Weight Watchers traditional competition is not looking any better. Although the search number have always been much lower than Weight Watchers, Jenny Craig and Nutrisystem seem to be on a very similar search trajectory.



Jenn Craig versus Nutrisystem Trend



Weight Watchers built its brand on meeting-driven weight loss. They were great at this for decades and that business model worked very well - in the first four decades and even well into the year 2000. What happened? What changed? Well, the Internet happened and everything changed because the open source philosophy that came with it. Weight Watchers has simply failed to keep up with current trends and program delivery methods.

The Weight Watchers Fitness Monitor

Weight Watchers Activelink activity monitor 2.0

Have you ever heard of an ActiveLink Monitor? That's the name that Weight Watchers gave to their own wearable fitness monitor back in 2012. Why have you not heard of it? True to their core business principles, the folks in charge at Weight Watchers decided that members had to pay for their monitor on top of paying for their membership and then you needed to upgrade to eTools for everything to work. So, in this world of open source applications where people are now accustomed to paying for cool hardware and getting the apps for free, Weight Watchers was not even an option. They were on the right track at the time but, in the end, they really underestimated the power of personal fitness monitors.



Weight Watchers Online Subscribers versus Revenue Chart



Some Good News - Almost

They have made some attempts at meeting the market halfway and appease the "go-it-aloners". For example, you can now import the data from your FitBit and Jawbone (and the ActiveLink Monitor) into Weight Watchers online eTools. They also provide mobile apps for your iOS, Android and iPad devices that can accept the same data. This is all well and good but the fact still remains that you need to pay for a membership to use any of these devices as part of the Weight Watchers program. This is in stark contrast with the price of many mobile and online apps. Lose It! and Myfitnesspal are free while Sparkpeople costs the same as a cup of coffee ($1.99). So, a FitBit and the price of a cup of coffee gets you 3 different weight loss apps while Weight Watchers charges between $19.95 and $69.95 per month! That is always going to be a tough sell when you compare that price to a free mobile app.

Having said this, over the years, Weight Watchers has put a huge amount of effort into what they call the science of weight loss. The result is that their members do get great value if they join but the value is just not apparent or obvious to the average person looking for a way to lose some weight. Some users may not be willing to pay anything no matter how valuable the Weight Watchers program looks. Unfortunately, none of this high value content has been able to reverse the constant decline of Weight Watchers membership numbers, meeting attendance, profitability and ultimately, stock price.

Factors Stacked Against Weight Watchers

There is a perfect storm raging against Weight Watchers and their traditional competitors. Both Jenny Craig and Nutrisystem report similar steady declines in new and repeat customers.

At the same time, changes to the Google search algorithm has wiped out most of these company's traditional affiliate traffic. These were thousands of websites that directed targeted traffic to their websites in exchange for a small commission and this has all but evaporated further contributing to the decline in members.

The US economy has also played a part in starving off money from the weight loss industry. And this is the idea that Weight Watchers is focusing on as the main culprit for their plummeting sales. It has been suggested that American do not have the disposable income for Weight Watchers monthly fees.

With all of these factors combined plus the rise in inexpensive wearable technology and free weight loss and fitness tools, is there still a future for these old school weight loss companies?

Weight Watchers Own Plan for Success

"Success" is a word that is repeated throughout the company's programs and literature. Does Weight Watchers have a plan for success and to lure customers back to their program?

From their latest press release, it looks like they have two plans: The first is to tweak the basic program yet once again. The online program will be re-branded as something called "the Essentials" - but details are scarce.

The second plan is to offer personal coaching to online clients much like members get when attending traditional meetings. The only problem is, once again, they plan to charge an extra fee for the service that takes a basic Essentials membership from $19.95 per month to a staggering $54.95 per month.

Why These Plans Will Fail

This is the third year in row that the basic program has been re-branded with little change to the underlying product. It is unlikely that this will convince many consumers that this high-priced program is still worth the cost when so many other cheaper (or free) alternatives are sweeping the market. Re-branding wasn't a magic bullet for success last year, or the year before that. It's absurd to think that it will have any better results in 2015.

At least when you purchase a FitBit and download the MyFitnessPal app, you own a FitBit and an app. With Weight Watchers, if you do the same, you own a FitBit and still owe $19.95 to $54.95 a month - this is not a recipe for long-term weight loss nor is it a recipe for long term success for Weight Watchers.

Weight Watchers is simply oblivious to the market trends. The signals are very clear as to what consumers want. Unfortunately, they don't want to pay for something very similar to what they can get for free.

Conclusion

Everyone knows that the word "social" has been drastically redefined by technology like smart phones and tablets as well as applications like Twitter and Facebook. Why has Weight Watchers not realized this and adapted? The definition of the word social that Weight Watchers was created under 50 year ago is just no longer relevant.

Our prediction is that this latest offering from Weight Watchers is intended to put the infrastructure in place to provide online coaching and sometime in the future, the basic eTools will be offered free of charge to everyone - including non-members. This would get more users using the program. Once they are hooked, then they could be enticed into additional pay-per-use add-on features like the 24/7 1-on-1 Coaching. This is the only way Weight Watchers can compete on today's weight loss playing field.

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