How The Nutrisystem CIO Turned The Company Around

Nutrisystem had the data, they just didn't know what to do with it
Nutrisystem had the data, they just didn’t know what to do with it
Image Credit: Mike Mozart

Just a few years ago, the weight loss company Nutrisystem was in a bad place. A combination of events had resulted in a decrease in sales. The global recession along with more competition in the weight loss market had resulted in sales and profits declining for several years. Clearly something had to be done. The company’s CIO, along with their CEO Dawn Zier, decided that everyone in the company had to have a new mindset if the company was going to be saved.

Everyone Needs To Think Like An Engineer

The way that the Nutrisystem weight loss program works is that the company delivers a month’s supply of pre-packaged meals to the homes of customers. It turns out that the average customer who subscribes to this program is between 44-55 years old and would like to lose up to 40 pounds. 70% of the purchases of Nutrisystem products are made online and its weight loss food products are sold in Walmart stores. In order to turn things around at Nutrisystem everyone needed to start to think like engineers. What this meant is that the IT department had to help everyone to start to test everything carefully ranging from meal components to what went into the food.

In order to turn the company around, the person with the CIO job realized that the company had to start to understand the importance of information technology and take a closer look at the analytics that they had. Since so much of Nutrisystems sales happen online, the company was virtually swimming in data. The company’s new approach was to take the time to carefully measure what the data was telling them and then allow it to tell them where they were going. When they also took the time to understand what they wanted their results to be, they were then able to determine if they were on the right path.

In the diet business there is a part of the year that is called “diet season”. This is the time when people start to implement their New Year’s resolutions. Diet season lasts from January through March. During diet season the person in the CIO position has the ability to help the company to introduce new products. During the rest of the year they spend their time simply making changes. Nutrisystem has a sophisticated dashboard that the IT department has created for the company that allows them to see how sales are going. The system tells the company how sales are being driven based on television channels and digital channels and this allows them to quickly make changes.

How Nutrisystem Was Saved

When the company was in financial trouble, the reasons were very obvious. They had allowed themselves to drift away from selling weight loss to their customers and they were instead selling them food. The messages that they were sending to their customers were not connecting with them. The company’s workers were focused almost exclusively on bringing in new customers and not on retaining the customers that they already had. The changes that were implemented were designed to extend the relationship between the company and their customers. The company now uses tools, content, and even apps to attempt to make interacting with the company more rewarding for customers.

It took the company a little while to realize it, but it turns out that their customers really don’t want to be on a diet forever. When Nutrisystem took a look at the data that their IT department had collected, what they discovered was that the average customer stayed on their program for roughly three months. After that they were looking for a less structured eating plan. The company has used this data to start offering their customers a more flexible eating plan starting in the fourth month of their subscription. Their goal is to extend their relationship with their customer. They want to be the solution that their customers come looking for if they want to lose 30-40 pounds or just 10 pounds. This seems to be working because new subscribers and reactivations are growing at the same rate.

In order to turn the company around, the CIO had to insist that analytical data start to be used to support the conversations that the employees were having. The goal was to refine the meetings that were being held in order to make them more analytically driven. The goal was for the company to start to make better decisions. Now that the company is taking a look at the data that the IT department is collecting , they are better able to react to changes in their market. One of the most important things that Nutrisystem has realized is that in order for their customers to be successful in their weight loss, they need to learn how to control the size of their portions. In order to help them do this, the Nutrisystem meals are designed to be the correct size. This allows their customers to finally see just exactly how much food they really should be eating.

What All Of This Means For You

The weight loss company Nutrisystem found itself in a difficult position. They had been very successful; however, a combination of market events had turned things around and they were now losing money. It was up to their CIO and CEO to find a way to turn the company around. The one thing that they had going for them is the company had a great deal of information about their customers.

Most of the Nutrisystem products that are sold are being sold online. In order to turn the company around, the employees had to change their thinking and start to think like engineers. Nutrisystem already had a lot of data about their customers and what they were buying. What they had to so was to start to take a careful look at what their data was telling them. It was the responsibility of the CIO to help the company get ready for “diet season” and then make further changes to their products throughout the year. The reason that the company had gotten into financial problems was that they had started to sell food, not weight loss. When they realized that customers didn’t want to be on a diet forever, they were able to change their program to start to offer more options in the fourth month. The way that the company was able to be turned around was by starting to use the analytical data as a part of every meeting.

The Nutrisystem CIO has shown that a company doesn’t necessarily have to start to do different things in order to turn the company around. Instead, what they need to do is to take a look at the data that they may already have and find new ways to go about using it. Nutrisystem already had the information on what they needed to be doing. It was just when the CIO showed them how to use it that they were able to make big changes at the company.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: Do you think that Nutrisystem should focus on former members more than getting new members?

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What We’ll Be Talking About Next Time

If you are the person with the CIO job, the rest of the company is looking at you for help in making your company more competitive. What this means is that the company needs to always be improving how they do things – they need to become quicker, better, and faster. This all sounds great and we know that if we use the power of information technology we can certainly make some of this happen. However, what the person in the CIO position needs to find out is how all of that data that they are collecting can be used to help the company teach itself how to become better. It turns that this can be done. The secret lies in models.