Nutrisystem 2008 Annual Report Download - page 11

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Marketing
Marketing is a core competency that drives sales and builds the NutriSystem brand. We have strong
expertise in all facets of both offline and online marketing, and utilize 360-degree, integrated marketing to drive
profitable revenue from customers in an efficient, effective way.
Offline Marketing. We believe NutriSystem is one of the leading and most-efficient offline direct response
advertisers. We deploy a hybrid of proven brand-equity-building and direct response techniques to increase
awareness of our brand, to encourage qualified customers to call or visit our website and to deliver profitable
sales. We track response to each advertisement through unique toll-free numbers and URLs. We deploy a multi-
channel campaign, including Internet, television, print, direct mail and telemarketing, to target new customers.
Direct mail and telemarketing efforts complement our media advertising to reactivate lapsed customers and to
upsell customers already on program.
Online Marketing. Our online marketing strategy is focused on driving high volume, cost-effective,
qualified leads to the website with a focus on increasing both front- and back-end conversion through constant
testing and optimization. We are continually exploring new online opportunities as the market evolves, but focus
the majority of our efforts on search optimization (paid and natural), affiliate management, portal relationships,
large ad networks, strategic partnerships, targeted display media and internal/external email campaigns.
Public Relations. The consumer and business media outreach programs accentuate NutriSystem as a leader
and innovator in the weight loss category. Our public relations strategically complement offline and online
marketing to increase top-of-mind awareness for NutriSystem, as well as to foster positive word-of-mouth,
enhancing purchase consideration of our product. The NutriSystem brand, our marketing and product
innovations, as well as celebrities who have lost weight on our program, are regularly featured in top-tier media
outlets such as: The Today Show, USA TODAY, People Magazine, Larry King Live, Access Hollywood, E! News
and Forbes.com. We typically compensate our spokespersons based on their initial weight loss on our program
and maintenance of the weight loss over time.
Ecommerce
As a leading ecommerce company and brand, we constantly strive to employ the latest tools and technology
in order to drive increased performance of online customer conversion, retention and reactivation. We utilize our
ecommerce platform to drive a highly-customizable and personalized user experience, as well as to effectively
and efficiently manage day-to-day ecommerce business operations. In addition, we combine internal resources
with external agencies in the development of our website information architecture, user interface and user
experience. In order to optimize the key online business drivers, we continually perform usability testing and are
constantly optimizing our website using a variety of sophisticated third-party testing tools. Finally, we measure
our online interaction with customers along with broader website performance via web analytics platforms and
tools.
Sales and Counseling
A majority of our direct business sales occur on our website. The remaining sales are by telephone, and our
call center processes virtually all of them. Our weight loss program is also sold through QVC, a television home
shopping network, which represented 6% of our revenue in 2008.
As of December 31, 2008, we employed approximately 90 weight loss counselors and 230 sales agents.
Staffing levels for counselors and sales agents are largely a function of the volume of revenue and orders. Sales
agents are responsible for in-bound sales calls and will initiate out-bound sales calls to our leads and other
targeted potential customers. Counselors handle some in-bound sales calls but primarily focus on in-bound
counseling calls, email and voicemails. Counselors also handle online web conversations from new visitors and
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