Archive: Tedious, yet older
I don't care if she lost 50 lbs years and years ago, by now she should of loss lbs. While the meals are delivered to you, you do still have to go to the grocery store to supply the fruits and vegetables and lean proteins that are supposed to complement each meal. Of course, you have the option to order from Nutrisystem Select menu which features fresh, chef-inspired entrees and desserts. All 4 of us lost weight on it. To be honest, given the price of the food, be aware of how high you set your expectations.
Second, do as much as we can to make the customer success as easy as possible to attain. We create the recipes for great tasting food that meets our nutritional parameters to deliver weight loss while satisfying. We prepare the food and deliver directly to the customer, and we constantly strive to better understand our customers' need to evolve and better serve.
And third, motivate and inspire. We always believe in the power of the individual to take action, live healthier and live life better. In the past few months, it's been energizing for our team to reflect on who we are and the unique benefits we offer. Doing so, it has allowed us to improve the way we reach people, particularly through our television advertising.
We've made consistent progress throughout the quarter with our creative. There are 3 phases to our creative plan. In Phase I, we rethought our advertising, using footage and material we already had on hand to make fast improvements to response. For example, we made iterative changes to the pacing, the look and feel and offer presentation.
At President's day and after Easter, we proved that we can leverage short-term promotional events, in which we bury our television offer to generate excitement. And because we managed price overall, we were able to have sales events yet still increase the average selling price of our program. We expect to continue to hold television campaigns connected to specific occasions in the future. We alter the way we present our programs to attract more target groups. For example, we launched a successful ad for our Nutrisystem D program for those with Type 2 diabetes and are expanding its reach now.
We also highlighted the way our program both makes getting on the path to health easier, and also teaches the way to eat to maintain weight loss for life with our Flex program advertisements. We explored varying our creative approach to better suit different stations to better match viewership demos, and we debuted ads that use our celebrity ambassadors in a fresh and novel way. In Phase II, we are producing a new campaign that will test in June.
We did a thoughtful and candid study of our brands in advertisements, both ours through the years and other advertisers we admire to decide how to make our campaigns better articulate our unique strength and more emotional, compelling and tailored to our changing media placements and segmentation strategies.
We then selected agencies who will help us move forward and work right now on new spots. With our successes from Phase I and the innovative work we're doing for Q2, we're feeling confident about the rest of In Phase III, we'll take the learnings from Phases I and II, along with some very exciting innovation happening on the product front and get ready for the new year.
We believe that we are on the path to grow for Nutrisystem in Regarding media and how we reach new customers, here too we've made steady progress.
We have firm control over our acquisition cost per customer and it has steadily improved since January. We are actively optimizing and have identified areas of media for expansion. The new ads, like the one for Nutrisystem D, are allowing us to expand into a less saturated channels, and we're deploying spend for programmatic display in digital and are seeing some promising results.
Essentially, we've returned to our highly nimble media model and see a path to expansion in One strength of our business model is that we directly engage, interact and market with each of our customers. And as a result, we have valuable proprietary database. Our ability to understand our customers and then employ that understanding via data analytics is a considerable competitive advantage. It both buffers and serves as a multiplier to our business. In , we've had some breakthroughs from predictive modeling that are allowing us to do 2 things that drive value creation.
First, we are reaching a lot more of our former customers and bringing them back very profitably. And second, we're growing our revenue per customer. We're going to share a bit of information about each initiative.
This past quarter, we've been able to identify the variables that most predict whether a former customer will return to us. And with that ability, we've been able to significantly expand our direct mail and e-mail program to former customers to present compelling offers to them and to increase the rates at which customers return. We are excited about this progress and feel we are just getting started. We're now using similar techniques to identify key influences of retention, which will allow us to improve our program and better serve customers individually to influence their behavior and spend.
We have a long track record in enhancing customer experience to increase revenue per customer and we're having another year of progress.
Engagement with our NuMi app and The Leaf, our content site is up, which is helping length of stay and cross sell of à la carte items to those on program. Our average selling price is up, and we believe we have tactics in place to support future increases.
In addition, just as a few years ago, we learned how much customers wanted our shakes, and then we built a successful upsell and cross-sell shakes line, we now have identified through our research, another area of customer need, vitamins. Later this year, we will begin offering our customers proprietary vitamin packs as cross sells and upsells. By engaging with our customers, constantly improving our apps and our contents, and providing great products at a good value, we are confident in our ability to continue to grow revenue per customer.
This will result in increased revenues and profits and allow us to expand reach to attract more new customers. Nutrisystem has helped millions of busy men and women lose weight, improve their health and have supported them in achieving their dreams. We believe it's the most effective way to take control and lose weight, and our simple system helps people transition to a lifetime of healthy eating. Turning now to South Beach. As planned, this business is taking off. We're expanding reach efficiently through television and digital and growing quickly.
Response remains strong and contact center and online conversion have increased. We are developing more commercials, including those designed for different target customers and plan to introduce a long-form spot in the second quarter. Our revenue per customer is increasing as well, as we had expected and planned for. Here are some drivers: Length of stay is better than we anticipated and on the rise, a myriad of product improvements we made over the last year based on consumer feedback and research have improved length of stay.
In addition, we believe that as we reposition South Beach in the market, and as more people understand what the program is, we will attract more customers to stay longer. We introduced the men's program option, which is supporting both average selling price and retention. And in the back half of the year, as we prepare for , we'll also be launching a diabetic-friendly program and promoting the many heart health benefits of the South Beach nutritional approach.
We rolled out a 3-tier plan structure like the one we've had at Nutrisystem, which enabled us to dramatically increase the take rate of Nutrisystem's premium program.
So far, we've seen an increase in the take rate for the premium South Beach program. The South Beach shake take rate is on the rise, and à la carte sales are growing.
And as with Nutrisystem, later this year, we plan to introduce South Beach living vita packs, especially designed for South Beach customers. We are eager to see how South Beach customer respond to this addition, which we designed around their needs. These volumes will also be sold as cross sell and upsell. Another encouraging early sign for the South Beach business is a reactivation. We have a variety of transition programs in place that are resonating with the customers.
We have not yet leverage the predictive modeling we have just rolled out for Nutrisystem to increase South Beach direct mail and e-mail efforts. So we have reason to believe that reactivation revenues will continue to increase in Our teams have exciting innovation on both the creative and the product side that will support our mission to help as many men and women reach their goals and live happier, healthier lives.
We look forward to the remainder of and I'll now turn the call back over to Dawn. Let me summarize the 4-key takeaways from today's call.
One, I'm pleased that as we've progressed through the first quarter, we were able to deliver stronger-than-anticipated results for Nutrisystem's direct-to-consumer business. We've seen monthly improvements that are continuing into April, as we began to revamp our advertising, redeploy media, further monetize the customer journey and reactivate former customers.
Two, our multibrand strategy is working. Plus, we have license to expand into health and wellness under the South Beach Living label. Three, customer economic continues to improve across both of our brands. In , revenue per customer is up, length of stay is up, average selling price is up, and we're up selling and cross-selling more products to our customers along for all phases of their customers journey.
And four, we're focused on innovation and have a multiyear pipeline of new products and initiatives, which will allow us to better meet customers' needs through all phases of their journey as well as widen the net on who we attract. While second half growth in will be modest, the trend lines are clearly moving in the right direction.
And we believe we are well-positioned to deliver meaningful growth as we move forward. Each day in the United States, weight management becomes a more important an health issue that impacts the majority of the population. Americans in general are looking to lead healthier lives and weight loss and management are, for many, important components. It's our mission to help them achieve these goals. The passion to fulfill this consumer promise is deeply embedded into our culture, and we're pleased that we've been able to help millions of people already achieve these goals.
The need for healthy weight loss and management solutions is great, and we have 2 powerhouse brands to help consumers become healthier versions of themselves. Nutrisystem is an extraordinary system that works. It is a simplest, most effective weight loss meal delivery program available to consumers today.
South Beach is a clearly differentiated on-trend alternative and quickly growing. Both brands share uniquely strong business model, a model that is asset light with unrivaled economics in the space. In closing, we're pleased with our better-than-expected results in the first quarter and raised guidance for We believe we're poised to return to double-digit growth as we move forward, and we'll continue to update you on our progress throughout the year.
We'll now open up the lines for questions. I wanted to ask a little bit about the TV commercials that you've been running. It sounds like you've made some changes to the creative aspects of the commercials, added the new Nutrisystem diabetes commercial. Can you give us a sense of how far along you think you're on the path towards making the optimal changes that you need to make this year?
I think on the last conference call, you said, some point this summer, you think you'd be at the point where you have the commercials where you want them. Do you feel like you're still on that path right now and are those changes that you mentioned on -- in the prepared remarks, are those pretty much the changes that you think need to be made?
Or are there any additional tweaks that we might see coming in the future? So, 2 messages; one, we made considerable progress, but that progress was made with footage and creative that we had on hand.
So we are still making changes and plans to come out with something new in June. And I expect that we'll keep working at it, because we've never really done. But made progress and expect still new stuff to be coming.
And then if I could just ask a follow-up on the vitamins and supplements that are being launched, I apologize if I missed some of the details, during the prepared remarks. But can you give a sense of when we should expect to see those and how large you think they could become? And is the strategy here really more about increasing the average basket size?
Or is this something you think could drive some new customer revenue as well? This is Keira again, I'll answer that. So at this time, we're expecting that this primarily like our shake business, sold as cross sells and upsells to our existing customer base. And the first part of your question was, I forgot When will it be out? We're looking for definitely sometime in this year, probably sometime in Q3. Yes, one of the things we've be doing, well Alex, is really driving revenue per customer.
And optimizing places in the customer journey, where we can give customers more of a complete program and product. And this is one example, diversifying from just food that we can target them with.
Great, that's really helpful. And then if I could just ask lastly, it looks like earlier this year, you took a small price increase. Don't think we've seen a price increase on your core days subscription plans for a little while. Can you just give us a little bit more color behind that? Was this something that you had been planning for a little while? And can you give us a sense of was there any discernible change in consumer behavior when that happened?
So we did, Alex. We took a price increase earlier this month on the Nutrisystem brand, and over the past couple of months we actually took a price increase on South Beach as well. Now as you know, this is part of our normal ongoing strategy where we're constantly testing our ability to increase price. So it's the normal course. It's part of our testing, we make sure that there's not deterioration to overall customer length of stay or any negative impacts to our upsell rates before we take them.
So no material change to the negative on overall customer behavior. Our next question comes from the line of Frank Camma with Sidoti. First, on the retail. I didn't catch Mike's comment on the actual -- I think you said weakness. But given how well your -- overall you're doing in direct and the challenges in retail. Is that really sort of a good long-term strategy? Have you reassessed that at all, just sort of what's going on there? Well, we think retail, again provides a nice brand halo for the entire brand.
So for Nutrisystem, as we've said many times, we're operating a strong direct-to-consumer business, and that is where we expect our growth to continue to come from. But we like the brand halo.
And the other question I had was, just Nutrisystem D, because it does seem like you're playing that out more in the -- seem to recall that movie 8 to 10 years ago. And -- sort of how big is Nutrisystem D as a whole part of the company?
And for me it sounds exciting, I was just wondering how fast relative to the business, it seems like it should grow faster, I guess this is what I'm saying for this kind of a niche product.
So is there any way you speak the -- sort of the relative size first? Right now, it's less than in terms of the customers coming into our program. And a lot of the things that we're doing are really positioning it for long-term growth. So a lot of the comments that were made in the script, it's something that we're testing and emphasizing now, and we're optimistic over time about how it can contribute in a more meaningful way.
And then my last question just the actual ASP percentage increase, Mike, can you just call that out for quarter-over-quarter? For the Nutrisystem brand or for Our next question comes from the line of Linda Bolton-Weiser with D.
Linda Ann Bolton-Weiser, D. So you had alluded to some changes in the Nutrisystem program for And I know you probably don't want to say that much. But generally speaking, is there a change in the model in some way to veer away from a monthly plan type model that you had? Or is it an actual team in the food of the formulation of the diet? Can you just give us some ideas of generally what you're referring to? Yes, in general, and as you know, we don't really go into details about our plan for diet season '19, it's kind of early, it's only April.
So we're not going to comment on that. But you did say there was some kind of major change coming for the Nutrisystem brand. Or did I misunderstood? And then, just in terms of the competitive landscape. Do you -- I mean, are some of the changes that you're making kind of in response to things that are happening competitively?
Weight Watchers for example is broadening their scope of what they considered to be in addressable market. So do you feel you have to do that. Jenny Craig is running more weight-loss claims in their advertising. Is just -- is any of this just in reaction? Well again, as we said on the last call, we think what happened to us during diet season was specific to our advertising campaign and our media deployment, which we have spoken about.
So we're always looking to drive, and on one of the things that we've been very successful with is driving revenue per customer.
And this is just a further indication of how we're going to do that. And we believe that we being in commerce business, we have a wonderful and proprietary database that we can draw upon.
I don't like that she's an Obama-hating right winger though. She did like the show though. I don't know much about her but she seems so utterly phony, so retouched and processed that I don't see what appeal she might have. You need a sense of humor to pull that off like Dolly Parton but I don't get that from Marie.
Larry King used to interview Donny and Marie almost regularly probably a Mormon connection between them and Larry's 8th wife , and Marie sounded almost psychotic talking about her doll collection. And she always talked over Donny and never once allowed him to finish a sentence.
Look at Hollywood celebrities and their not famous siblings and you will see a very big difference in weight. Almost all of the not famous siblings are heavier. Marie seems harmless, but I can't imagine who the fans are of a bubblegum talent whose fame peaked in the 70's.
The answer is "yes," R9. The better question is how long it takes them to put it back on plus more. She's not for me, but she seems pretty harmless. I doubt she came up with the idea for the commercial, OP.
I heard her say that she wishes all men could have been raised by her parents, which was a compliment to her parents and to her brothers. She seems like a very nice daughter and sister. I've always liked her. She comes across as genuine, with just a tiny bit of edge and sense of humor about herself.
Donny seems just as nice but with zero edge or awareness. I think there's something incredibly genuine about both of them. I have a good friend that was nice it took me a couple of years to realize that she was completely percent genuine, because it's a rarity that someone who comes across as nice and sweet actually is nice and sweet even when the shit hits the fan.
Marie Osmond on those NutriSystem commercials She's surrounded by dressers and hair people and makeup artists while prancing around a set someplace. She occasionally guest hosts on The Talk. Nuttier than a Mormon honey-cake. This is why I killed myself. My question is has anyone ever really lost significant weight by eating that shit? These commercials somehow remind me of the intro on "Strangers With Candy. She and Donny still have a big Vegas show going on right now.
She's seems nice, why pick on her. Girl is making a buck that is all. She said she was too young to be a grandma Yeah right.