Nutrisystem 2006 Annual Report Download - page 13

We seek to hire counselors with backgrounds in psychology, sociology, nutrition, dietetics or other health-
re
l
ate
dfi
e
ld
san
d
su
i
ta
bl
e temperaments to ta
lk
w
i
t
h
our customers. Our counse
l
ors are more exper
i
ence
d
an
d
h
ave more trainin
g
than our sales a
g
ents. Counselors are trained in our meal plan, our internet chat service, email,
v
oicemail, motivational techniques and customer service problem solving
.
C
ustomer
S
ervice
A
s of December 31, 2006, we employed approximately 140 customer service representatives. Customer
serv
i
ce representat
i
ves are tra
i
ne
d
to
h
an
dl
e
i
n-
b
oun
d
ca
ll
san
d
ema
il f
rom customers w
h
o
h
ave quest
i
ons or
problems with an order after the sale transaction is completed. T
y
pical customer inquiries relate to arrival date of
t
h
e
i
ror
d
er s
hi
pment, report o
f
m
i
ss
i
ng or
d
amage
di
tems an
d
cre
di
ts an
d
exc
h
anges. For ema
il i
nqu
i
r
i
es, we
h
ave
a
so
f
tware system t
h
at scans t
h
e customer’s ema
il
message
f
or
k
ey wor
d
san
d
automat
i
ca
ll
y supp
li
es t
he
re
p
resentative with a form res
p
onse that is reviewed, edited and sent back to the customer. Customer servic
e
representatives are typically available from 8 a.m. to 12 midnight, Monday through Friday, and 8:30 a.m. to
5
p.m. on Satur
d
ay an
d
Sun
d
ay. Customer serv
i
ce representat
i
ves are pa
id
an
h
our
l
y wage.
Ful
fi
llmen
t
We operate an
i
nte
g
rate
d
or
d
er rece
i
pt,
billi
n
g
,p
i
c
ki
n
g
,s
hi
pp
i
n
g
an
dd
e
li
ver
y
trac
ki
n
g
s
y
stem compr
i
se
d
o
f
proprietar
y
and third part
y
components. This s
y
stem inte
g
rates the front end, or website customer interface, with
o
r
d
er process
i
ng an
d
s
hi
pp
i
ng, an
d
a
ll
ows
i
nternet customers to access s
hi
ppers’ or
d
er trac
ki
ng num
b
ers on
li
ne.
Our computer-ass
i
ste
d
p
i
c
ki
n
g
s
y
stem a
ll
ows
f
or v
i
rtua
lly
paper
l
ess or
d
er p
i
c
ki
n
gi
na
ll
ware
h
ouse
f
ac
ili
t
i
es. I
n
2006, we en
g
a
g
ed in multiple pro
j
ects desi
g
ned to increase processin
g
capabilities and provide
g
reate
r
o
perat
i
ona
lfl
ex
ibili
ty an
d
contro
l
w
i
t
hi
nt
hi
s
i
ntegrate
d
s
hi
pp
i
ng system. Management
b
e
li
eves t
h
ese
i
mprovements prov
id
e reasona
bl
e assurance t
h
at our
g
rowt
h
w
ill
cont
i
nue to
b
e supporte
d
.
We operate an
i
ntegrate
d
networ
k
o
fdi
str
ib
ut
i
on
f
ac
ili
t
i
es o
f
w
hi
c
h
one
i
s company-owne
d
an
dfi
ve ar
e
o
utsourced. In December 200
6
, approximately 87% of our fulfillment was handled by our outsourced provider
.
I
n 2006, we completed an expansion and redesi
g
n of our warehouse network. These chan
g
es ensure hi
g
he
r
v
o
l
ume capa
bili
t
i
es w
hil
es
i
mu
l
taneous
l
yre
d
uc
i
ng process/
d
e
li
very t
i
mes an
d
out
b
oun
df
re
i
g
h
t costs. Except
f
or
brief periods of peak demand in 200
6
, approximately 99% of all direct customer orders were shipped within tw
o
business da
y
s of the da
y
received. In addition, we can ship to approximatel
y
99% of the domestic populatio
n
w
i
t
hi
n
f
our
b
us
i
ness
d
ays us
i
ng stan
d
ar
d
groun
d
transportat
i
on. D
i
rect customers are not c
h
arge
df
or t
h
e
i
ror
d
ers
u
nt
il
t
h
eor
d
ere
d
pro
d
uct
i
ss
hi
ppe
d
.We
d
o not c
h
arge customers
f
or s
hi
pp
i
ng an
dh
an
dli
ng on Auto-
d
e
li
ver
y
f
ood orders
.
P
ro
d
uct
D
eve
l
opmen
t
A
ll of our foods and supplements are currentl
y
outsourced from more than 30 manufacturers or vendors
.
Our pro
d
uct
d
eve
l
opment
d
epartment pr
i
mar
il
y creates
id
eas an
d
concepts
b
ase
d
on customer
f
ee
db
ac
k
, mar
k
e
t
tren
d
s, nutr
i
t
i
on an
df
oo
d
tec
h
no
l
o
gy b
rea
k
t
h
rou
gh
an
d
reta
il g
rocer
y
tren
d
s. T
hi
s starts at t
h
e
l
a
b
orator
yl
eve
l
t
o
d
etermine if the product can meet our strin
g
ent demands (i.e. shelf stable,
g
l
y
cemic friendl
y
etc.) and is then
o
utsource
d
to our
f
oo
d
manu
f
acturers w
h
o
f
urt
h
er
d
eve
l
op t
h
e new pro
d
uct
b
ase
d
on our spec
ifi
cat
i
ons. A
ll
ne
w
f
oo
d
s are create
d
to en
h
ance t
h
e var
i
et
y
o
f
our current pro
g
ram, or to support t
h
ee
ff
orts o
f
creat
i
n
g
ane
w
pro
g
ram. Also, new foods are presented to us b
y
food manufacturers to see if the
y
are compatible with our
program. Most o
f
our
f
oo
d
s are create
df
rom mar
k
et researc
h
an
d
customer requests, as we
ll
as recommen
d
at
i
ons
f
rom our manu
f
acturers. A
ll
o
f
our new
f
oo
d
s are eva
l
uate
df
or nutr
i
t
i
on, comp
li
ance w
i
t
h
our pro
g
ram, taste
by
u
sin
g
testin
g
panels and cost considerations. The number of SKUs we introduce each
y
ear varies dependin
g
o
n
w
h
et
h
er we are
i
ntro
d
uc
i
ng a new program
lik
e Nutr
i
System Nour
i
s
h
,w
h
ere over 100 new
i
tems were create
d
,o
r
u
p
d
at
i
n
g
an ex
i
st
i
n
g
pro
g
ram w
h
ere approx
i
mate
ly
20 new pro
d
ucts are t
y
p
i
ca
lly i
ntro
d
uce
d
. For 2007,
i
nor
d
e
r
to support a new marketin
g
initiative, we have created, and in some cases recreated, over 70 items.
7