It’s a recurring question asked by clients all the time- “Should we re-brand?” Here are some things to think about when contemplating that question.
The renaming of Weight Watchers’ to ‘WW’ shows the risks of changing a brand name. The company lost 300,000 subscribers in the quarter following the September 2018 change, followed by a disappointing post-festive peak season at the start of 2019. CEO Mindy Grossman forecast full year results well below expectations, with earnings per share of $1.25 to $1.50 less than half what was predicted (1). The share price dropped 36%, and is now back down close to historical levels after having enjoyed stellar growth in the last couple of years.
1. REFRESHING what made you famous
Until last year, Weight Watchers was a great example of brand rejuvenation, driven by the genius move to get Oprah Winfrey to buy 10% of the company in 2015. By becoming the public face of the brand, she not only boosted brand awareness, she also added credibility to the weight loss promise. “If she’s bought 10% of the company, their programs must work!” was the desired response.
The brand also renewed its product offer, including the Freestyle program expanded the list of ‘zero points’ foods, giving more freedom of choice of what to eat.
All the above followed a move to refresh the brand’s visual identity in 2012 to make it fresher and more contemporary, including a shorthand WW version of the logo.
After years of decline, revenues grew for several quarters in a row.
So, what went wrong? How has Weight Watchers seemed to clutch defeat from the jaws of victory?
2. FORGETTING what made you famous
I suggest the first and most fundamental mistake made by Weight Watchers was forgetting what made it famous, by shifting focus from weight loss to a broader remit of ‘health and wellness’. The move was reflected in the new slogan, Wellness That Works.
This change suggests the company believes weight loss is becoming less relevant over time, and health and wellness more so. But is that the case?
A quick look at Google Trends in the US suggests that the answer is “no.”
First, the search term ‘weight loss’ is 20 times more popular than ‘health and wellness.’ Second, the level of interest in weight loss is stable over the last 5 years and remarkably consistent. Searches peak straight after the Christmas festive season, stay high up to the summer holidays in July, then drop off in the winter months.
Even the CEO agrees that Weight Watchers has forgotten what made it famous, and what is relevant, as shown in her comments about the brand’s poorly performing peak season marketing campaign. “I think it needed to be more weight-loss focused, especially in the January season.”
Indeed, despite the name change and the claim that the brand has moved focus to wellness, the focus of communication still seems to put weight loss front and center. Read the rest of this entry »