WeightWatchers is on a Comeback

by Harry Wang | Aug. 4, 2017

One of the greatest turnaround stories in the digital health space in 2017 is WeightWatchers. The iconic brand, traditionally associated with in-person weight loss meetings and beautiful TV commercials boasting celebrity testimonies, suffered badly between 2013-2015 when fitness technology vendors like Fitbit lured away its young customers and new weight loss startups leveraging digital services and lower prices chipped away its core customer base. At one point in late 2015, many pundits compared WeightWatchers to Blockbuster, the video rental powerhouse toppled by online video services, and predicted a dire fate for Weightwatchers.

No such talk in the last 12 months. WeightWatchers powered back and showed resilience in the digital age. Its stock price soared over $40 this morning, from a low of under $10 two years ago. Its latest quarterly earnings showed that the company is firing up on all cylinders and its turnaround strategy is apparently working.

The secrets? Embrace consumers with a broader focus on wellbeing instead of just weight loss. That is a strategy WeightWatchers laid out in a conversation with me back in mid-2016 and it has executed well since.

This strategy is also centered on a digital platform strategy with new products, and exploration of alternative models including freemium and enterprise channels. Since 2014, its digital initiatives include “beyond scale”—a whole-person approach to wellness, not just weight loss, “Fitbreak” app--free social fitness app for everyone, and personal coaching services in digital and humanly way. The three initiatives create an engagement experience that consumers love and an opportunity for the company to retain existing members and sell value-added services to new members. On the enterprise front, the most notable accomplishment is its effort to become a CDC-certified diabetes prevention program operator, which opens up a new revenue stream from services targeting employers and insurers.

Is there a celebrity impact? Oprah’s name clearly helped.

Weightwatchers’ turnaround shows that…

1) A consumer-centric approach can work beautifully in a very competitive wellness service market for an incumbent brand.

2) A high level of customer engagement is key to business success, especially in the consumer health market. Our recent survey data shows that customers’ NPS (net promoter score) is highly correlated  with usage for wellness apps. MyFitnessPal, one of the leading wellness apps, has an astonishingly high NPS of 59 among its users who use the app several times a day.

3) Investors like services and recurring revenues. That’s why Fitbit is working feverously on its own wellness business.

Let's see if Weightwatchers can maintain its momentum. Fitbit's turnaround may be just around the corner.

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