Direct response marketing fundamentals

helped NutriSystem boost profits

from $2.5 million to $55 million

Instead of chasing silver bullets, little guys should focus on tactics that work. That’s what Mike Hagan has done since he took over at NutriSystem in 2002. Let’s look at his approach in terms of the four “P’s” of marketing.

Product: First, he fixed the product. He rehired diet scientist Jay Satz, who had left NutriSystem in 1990, to improve the Company’s menu. The result: new products renamed NutriSystem Nourish. Some describe the offerings as “small, safe and idiot proof portions.”

Place: He dropped retailers and bought out Company franchisees. Now customers enjoy the convenience of getting a month’s supply of shelf-stable nourishment shipped via UPS from one of five warehouses. And it’s nourishment that will help them loose weight.

Price: Mike Hagan’s company, like his best customers, is lean. Through outsourcing for data and logistics services; the commission program for call center reps; relationships with private label packagers; and low costs of distribution, the Company can offer competitive prices yet maintain healthy margins.

Promotion: NutriSystem leverages promotional dollars by taking advantage of left-over advertising inventory. This year, reports say they will invest over $100 million in advertising. With that kind of kitty, the opportunities for fantastic buys of space and time must be many.

Follow their ads, you’ll note the good old DM fundamentals at work: Every ad describes the food, promises weight loss, presents a bonus offer, provides strong visual proof with supporting testimonials, and has a strong call to action. And that call to action is backed up at their call centers by reps who know how to close the deal.

Mike Hagan was named Entrepreneur of the Year by Forbes Magazine. He junked a lot of silver bullet ideas that sucked and concentrated on the basics--- the four “P’s” of marketing success. And look where they took him and his Company.