NutriSystem’s stunning, DR-driven turnaround was fueled by commercials that got the basics right: great-looking bodies, great-looking food.

By Jack Gordon

To your list of life’s regrets, add the fact that you didn’t invest two years ago in NutriSystem Inc. From a 2004 low of $1.09 per share, NutriSystem’s stock climbed to $44.15 by the fourth quarter of 2005. Its 2006 high, at press time, was $76. As of June, the stock was selling in the $67 range.

That is only one highlight of a remarkable turnaround by the Horsham, Pa., weight-loss company, which attributes the “reawakening” of its 34-year-old brand primarily to a revitalized direct response marketing campaign.

Other highlights: In 2004, NutriSystem saw 52,000 new customer starts; in 2005 it posted 347,000. Last year’s net revenue of $213 million represented a 459-percent increase from 2004. And 2005 net income of $21 million was up by an astronomical 2,000 percent from the previous year.

While a number of operational changes contributed to the turnaround, says Chief Marketing Officer Tom Connerty, the main engine driving that spectacular growth has been a vastly improved direct response (DR) marketing effort. The multichannel campaign uses radio, print, direct mail and the Internet, but the cornerstone has been short-form DRTV. Once NutriSystem began to whip its television advertising into shape, Connerty says, everything else fell into place. Success bred more success, as winning DRTV commercials brought in revenue “that then allowed us to keep expanding our media presence.”

Sometimes, it’s not just what you know but who you know. The story of NutriSystem’s DRTV turnaround is largely a tale about a guy who knows the DR advertising business and his relationship with another guy who knows how to film good commercials.

‘A VIDEO JANITOR’
Connerty joined NutriSystem late in 2004, following a five-year stint as marketing vice president for Nautilus Inc., maker of the Bowflex home gym. The film-production firm he had used for Bowflex’s infomercials and short-form DRTV spots was Big Shot Pictures of Portland, Ore. Shortly after moving to NutriSystem, its stock price standing at about $2.50 per share and its advertising budget limited, Connerty called in Big Shot’s president, Jim Walter.

What Connerty wanted, originally, was a makeover of an existing 60-second spot “that was showing signs of fatigue.” It featured Zora Andrich, the winning bachelorette on 2003′s reality-TV hit “Joe Millionaire.” In an early episode of that show, Andrich was famously embarrassed when she had trouble closing the zipper on a ball gown. She later lost 17 pounds on the NutriSystem plan, making her a natural as a celebrity endorser.

Right celebrity, wrong commercial, says Walter. He describes his initial role as that of a “video janitor, trying to make a bad show work.” Using existing footage, Walter restructured the commercial and re-edited the testimonials, doing what he could to improve it.

The facelift paid off. Connerty says his most pressing short-term goal was to come up with a 60-second commercial that could “serve as the control spot for our women’s program for the rest of 2005.” Walter began his janitorial chores in late December 2004. Before the first quarter of 2005 ended, Connerty says, NutriSystem had “the best-producing 60-second spot we’d ever had up to that point.”

The money generated by the revamped spot enabled Connerty to get more aggressive. He had Walter perform makeovers on some other existing spots and a half-hour infomercial, the latter also featuring Andrich. Most importantly, Connerty says, the spot’s success and the revenue it brought in “allowed us to make short-form TV a significant part of our business.”

In what Walter calls “a progression” that so far has evolved into five campaigns, Big Shot began shooting some film of its own-especially of NutriSystem customers providing testimonials-to blend with existing footage in new hybrid spots. By mid-2005, he says, the spots “began to achieve some continuity and to take on a ‘campaign’ look.” Connerty started to incorporate that look into the company’s print and web advertising as well.

It wasn’t until early 2006, however, that Walter got to do what he and Connerty knew all along they wanted to do. He finally got to re-shoot the food.

GREAT-LOOKING BODIES, GREAT-LOOKING FOOD
NutriSystem faces formidable competition in the diet industry from the likes of Weight Watchers and Jenny Craig. But its business model is unusual in that NutriSystem customers don’t go to centers. Instead, 28-day supplies of special food-breakfast, lunch, dinner and dessert-are delivered to their homes. Customers faithful to the plan lose weight, basically, because they eat that food, and nothing else.

The target audience for the women’s program, Walter says, was females aged 30-45, 20 to 30 pounds overweight, and fairly sedentary. Most target viewers would have college degrees, well-educated women being more receptive to information about the dietary science behind NutriSystem’s food.

It seemed clear to Connerty and Walter that if TV commercials were to sell NutriSystem effectively, two basic things must look as appealing as possible. One was the customer’s goal-her reason to buy the product, namely, a healthier and better-looking body. The other was the means to achieve that goal, namely, the chow. As Walter puts it, what NutriSystem ads needed to show above all was “beautiful bodies and beautiful food.”

Big Shot had honed its skills at making bodies look great during its years of shooting for Bowflex. “And we do a lot of food work,” Walter says, for clients including the Kroger family of grocery stores. The secrets: For one thing, Walter says, “We’re believers in shooting on film, not video.” The rest is largely a matter of “lighting and art direction.”

The key to art direction, he says, was to “keep things simple. We want the audience to look at our bodies and our food, nothing else. You do that with simplicity of presentation.”

When he first saw the existing commercials, Walter remembers, “I said, ‘The food looks terrible.’” But that would have to wait, since NutriSystem “wanted to amortize out” the cost of its food video. So he and Connerty concentrated first on the bodies.

The goal wasn’t simply to make NutriSystem customers look a little better but to revolutionize weight-loss advertising. “We wanted an absolutely different look for the commercials,” Walter says. “We wanted to make weight loss sexy. We didn’t believe anyone else had done it.”

Andrich was a good celebrity spokesperson, he says, and so was Kat Carney, the former CNN health news anchor featured in some other existing NutriSystem ads. “But we aren’t huge believers in celebrities,” Walter says. “The product should be the hero, not some famous person…We started pushing to shoot more real people [i.e., NutriSystem customers]. They have compelling stories to tell, and we can make them look great.”

Connerty says that when Walter began filming new testimonials, the campaigns took on a whole new look-and the audience responded. “He did the same thing with Bowflex,” Connerty says. “In the hands of anyone else, the shots would look flat and lifeless. He makes [NutriSystem customers] look heroic.”

The results are apparent, for example, in a two-minute DR spot, filmed last summer, that now also includes new footage of the food. The star is a NutriSystem customer who plays a bride in an outdoor wedding. She is so delighted with her taut new body that she gets married in a white bikini. Three other customers, also in bikinis, play members of the wedding party. The commercial is almost racy. And the more recent interspersed shots of tables laden with NutriSystem food look as glossy and appetizing as the bodies-not like diet fare but a mouth-watering feast. This is not your mother’s weight-loss commercial.

Walter is especially proud of the wedding spot, because it was filmed outdoors in Arizona during a 16-hour day when the temperature reached 120 degrees. “Our crew [members] were dropping like flies,” he says. “But we still made those four women look like runway models.”

NEXT…THE MEN
By late 2005, the women’s program was so successful that NutriSystem was emboldened to go after men. Connerty had Walter shoot a short-form men’s commercial that began airing last January. “The spot worked right from the get-go,” he says, and is still going strong.

Next up for the men’s program will be a short-form campaign featuring former Miami Dolphins quarterback, Dan Marino, scheduled (at press time) to begin testing in July. The success of the first men’s spot “gave us the confidence to approach a celebrity like Marino,” who actually contacted NutriSystem first after one of his golfing buddies lost weight on the program, Connerty explains.

In Marino’s case, Walter overcame his bias against using celebrities instead of just buff customers. “When Tom [Connerty] called me about Marino, I said if ever there was somebody I’d choose, it’s him. I’m looking at the edit of the first spot right now, and he’s the perfect guy.”

The collaborators say they aren’t finished reinventing weight-loss advertising as a sexier and more appealing medium. Walter refuses to talk specifically about what’s on the drawing boards, “but we’re going to use real people and real stories to take the whole concept to another level.”

He says he has only one regret about his association with NutriSystem: “I wish I’d bought their stock.”

Jack Gordon is editor at large for Electronic Retailer magazine. We would appreciate your feedback. To submit comments, please e-mail the magazine at [email protected].