Home Diet Plan How a former Reader's Digest exec turned Nutrisystem around one data point at a time – CNBC

How a former Reader's Digest exec turned Nutrisystem around one data point at a time – CNBC

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Investors and dieters, curiously, share a basic commonality: Each relies on numbers to measure performance. While the former long for an explosive surge upward and the latter a rapid decline, the numbers nevertheless gauge success.

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Dawn Zier is a firm believer that numbers are key — not only to measure performance but also to drive it. Fortunately, her analytics approach has been a boon both for dieters and investors.

Zier, a businesswoman with a master’s degree from MIT, believes analytics are the way of the future. When Nutrisystem hired her away from Reader’s Digest in 2012 to help turn around the struggling weight-management company, one of the first things she did as president and CEO was institute a facts-based culture, believing that if you can gain better insights into existing and potential customers through data analysis, you can serve them better.

“When I came to the company, everybody was talking to me about their opinions on things, but we are an e-commerce driven company, so there’s lots of data,” said Zier. “My theory was, I will have any conversation with anybody that wants to, but it has to be fact-based. And we have so much data, so come into the room and let’s have a conversation not based on what you think but based on the data. … We went through several different transitions where we actually stopped meetings because nobody was talking facts, and then we moved into the mode where people would come to meetings with reams of paper and tons of data.”

Zier’s analytical approach helped leverage its database of more than 7 million customers and renewed its focus on product and program innovation to offer a more customized and personal approach to weight loss.

Under her realm the company partnered with Walmart in 2013, which put Nutrisystem products in 3,700 stores. Two years later they acquired South Beach Diet, giving Nutrisystem a second big brand and a big boost in the company’s stock price. Last year the company focused on personalized nutrition with the launch of DNA Body Blueprint, a mail-delivery DNA testing kit that provides individuals with a weight-loss action plan based on metabolism and behaviors. Nutrisystem also has a huge online presence and is now focusing on cleaner eating and less frozen food. Each year it ships more than 185 million boxed meal kits right to consumers’ doorsteps.

They’ve also changed their image. “The vernacular has changed over the last couple of years,” said Zier. “When I came to the company six years ago, the commercials that were being run were a little offensive. They were, you know, a woman in six-inch stilettos in bikinis, and that’s not the message we’re trying to convey. It’s not a vanity play, and we’ve changed that along the way very significantly. It is about health and wellness.”

Now, six years later, Zier has increased the company’s annual revenue from $397 million to $691 million and increased its operating income sevenfold. This success has garnered her loads of attention: Considered a trailblazer in the $70.3 billion U.S. weight-loss market, she was recently recognized by Institutional Investor magazine as one of the best CEOs nationwide.

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Yet once again Zier’s career is veering: Two weeks ago, on March 8, Nutrisystem announced it was acquired by Nashville-based Tivity Health, a leading provider of fitness and health-improvement programs, for a whopping $1.3 billion in cash and stock. This acquisition will enable Tivity to offer Nutrisystem’s diet plans to participants in its fitness programs and sell Nutrisystem products to people that use the approximately 16,000 locations in its fitness network. The combined company now has a footprint of more than 75 million members.

While the acquisition will provide the fitness component and access to new distribution channels Zier has been aiming for, she will again be exploring some new territory as she steps into the role of Tivity’s president and COO.

“One of the big lessons I have is that life is not a straight path. Your career is not a straight path. So there’s lots of curves in the road and you just have to be open to the opportunities,” said Zier.

Zier’s open-mindedness is perhaps one of her greatest assets. Initially, Zier’s move into the weight-management industry was met with much skepticism among Nutrisystem’s investors. (Zier had been at Reader’s Digest for 20 years, as president of North American consumer marketing, then president of global consumer marketing and finally president of RDA International.)

“They were like, ‘How does this make sense? You’re coming from the magazine industry, from publishing,’ and I’m like, well, that’s not really what we are all about. We actually are data driven at Reader’s Digest. So a lot of the path was pretty parallel in terms of an analytical approach and a direct marketing, direct-to-consumer approach. So it shows you can pretty easily — if the opportunities present themselves — move from one industry to another successfully.”

Zier attributes this open mindset to a very close mentor of hers at Reader’s Digest, who was the CEO. “He gave me a lot of great advice, and one of it was, “Don’t be afraid to step out of your comfort zone, which is really a mantra to how I try to live my life.”

Her rapport with this CEO and others at Reader’s Digest helped to propel her career, she said. “The people that recommended me [to Nutrisystem] were two of my former CEOs (there were four CEOs over a five-year period during Zier’s tenure at RDA) and then someone I’d worked with in international, so it really comes down to the relationships that you build.”

She added: “Given that I had worked for four different CEOs, I had the benefit of seeing how others led, and I very consciously decided to build a team that didn’t have an us-vs.-them culture.”

Blending cultures is top of mind for Zier as she moves into her new role at Tivity. “That’s something we are both very attuned to, and you know, I think they made a very conscious effort to acquire a company where they believe it will be a cultural fit, because when you look at these acquisitions that fail, it generally comes down to adopting a culture fit.”

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