Which Business Model should I pursue?
October 30, 2012 12:16 AM   Subscribe

Quick and Dirty Business assessment feedback for women who want to lose weight: I'm trying to get some real market feedback (a focus group of sorts) on which program a potential client would invest in, which they would gain more value from and whether my prices are on target. (Details on the business model inside)

I've just registered a domain name with a general business plan in place but while writing out my script/marketing plan I decided to look up Weight Watchers to see how my program would fare in relation to what they offer and their prices.

I really wasn't quite clear on the unique selling proposition for Weight Watchers (it doesn't seem like something worth paying for) and thought my idea would bring MUCH more value to my customers, but became a little torn on two business models: Teaching my clients how to fish or doing the fishing for them.

Here are my options. By the way, since this program would be geared towards women who want to lose weight and sculpt a specifically svelte physique I'd appreciate feedback from those who fit that profile:

Option 1: Teach them how to fish
Provide an online training program of sorts to teach them about the principles of weight loss to achieve their specific goals over the course of 1 or 2 months in the form of 6 to 8 videos. It'd be like a 8 (or however many) step program, So each week members would get an in depth informative video learning about a component of diet/fitness and explaining why they need to do a certain thing, as well as a challenge to implement the things they have learned.

Weight watchers takes the route of 'teaching its clients how to fish' but it appears you are given a TON of information all at once to figure out on your own and I can easily see people being overwhelmed, which would lead to confusion, cheating, and/or giving up).

I would really aim for the videos to be very clear in the principles behind the diet, workout plans, how to construct meals for the week to meet weight loss goal, what to do about plateauing/stalling, staying motivated, etc. and have weekly live group calls to answer questions.. things like this. It'd be like a school to reprogram my clients thinking about food and exercise and I would want to sell the program between $200 and $500

Option 2: Provide the fish on a platter for them: An online coaching program of sorts where we (me and a team) would tailor make a plan for an individual client's weight loss goals and Provide clients with weekly grocery lists, recipes tailored to meet their tastes for all meals for the week and customized workout routines - all of which would change on a weekly basis to prevent their bodies from adapting and slowing results. So they'd have something like a personal dietitian and personal trainer telling them exactly what to do to get the specific results they want. Questions would be answered on a one-on-one basis

I'd want to sell the program on a month to month or package deal (3 months, 6 months, etc.) for anywhere from $40 to $60 per month
posted by soooo to Work & Money (20 answers total) 1 user marked this as a favorite
That price range seems high for a web-only service.

I can get decent menu plans and shopping lists for free, and healthy customized vegetarian or gluten-free ones for $5/month.
posted by croutonsupafreak at 1:25 AM on October 30, 2012 [2 favorites]

Part of the power of weight watchers - and what makes it worth paying for - is the in person meetings to offer support, advice, camraderie, and a bit of peer pressure.

People are very reluctant to pay for information on the internet. Everything you describe seems to me to already be available for free.
posted by amaire at 3:04 AM on October 30, 2012 [7 favorites]

Up to $500 for a series of 6-8 online videos? How did you come up with your figures? For my money, I'd much rather book a personal trainer for a couple of months, or join a fitness class for several months. I can't see people paying much money at all for generic advice, especially from an unverified source. If I want generic advice, there are many reputable free websites and blogs, or I could subscribe to 20-30 different fitness and health magazines for a year for $500.

The second plan seems more reasonable and more likely to appeal to consumers, but again there's the issue of credibility. Have you given thought to how you will put together a team of experienced and qualified dieticians and trainers? Do your rates reflect the amount of overhead you will need to cover payroll? I'm personally very wary of people claiming to be experts on the internet, especially when it comes to dieting and weight loss. If I never meet a person face-to-face in an office or clinical setting, I have little reason to believe they are who they say they are. It's not just a matter of offering a wider variety of services than the guy before, but why should clients should put their faith and money in you specifically?

I've noticed that this is your third business plan in two months. I'm not an entrepreneur, but I think your chances of succeeding will be improved by working on the quality of your pitches, rather than throwing anything you've got at the wall and hoping something sticks.
posted by keep it under cover at 3:22 AM on October 30, 2012 [3 favorites]

Why not offer both as two tiers in the business? Services like this do already exist, at least for men. My husband just paid some guy named Aram $125 for a supposedly tailored workout and nutrition plan good for a month. I thought and still think that's a ridiculous amount to pay for generic advice you can get anywhere but he's really happy with the results and with the way it worked.

You sound too unsure of 1) the way your major competitor offers value and 2) the motivations of your prospective customers to effectively market whichever model you go with. I advise more research on both. Or just jump in and use your commerce as your research, like Lean businesses who put out minimally viable products and then iterate with customer feedback.
posted by ImproviseOrDie at 3:51 AM on October 30, 2012

I believe the USP of Weight Watchers is the wide availability of in-person weigh-ins and monitoring. Also, Weight Watchers has incredible levels of international visibility and branding power, and the 'points' idea cleverly taps into that fear of restriction (you can eat whatever, as long as it adds up right!). This offers WW the chance to sell peripherals like the ready-meals and snacks, which clearly state the points value on the packet. The only weight loss programme in the UK that comes close is Slimming World, which follows the same basic model.

As a woman who is currently cultivating a svelte physique through a mixture of (free!) online tutorials and (not so free!) gym membership, I'd need some form of accountability factored in to the paid-for service. I pay for the gym because it gives me equipment, expertise, motivation and training. I don't pay for the food advice (except for cookbooks) because there is nothing tangible it offers that I cannot find elsewhere. That's what Weight Watchers offers with the semi-public weigh ins, it's a guarantee that folks will stick to the plan.

If you offer your service for that much money, you better have a lot of glowing testimonials! Also, I hope you are some sort of registered trainer, nutritionist or doctor, because the weight-loss sphere is full of cowboys selling snake oil and real expertise is difficult to find the over-saturated market.
posted by dumdidumdum at 4:06 AM on October 30, 2012 [3 favorites]

Is this a business school class homework assignment? I am not sure that AskMeFi is an appropriate venue for either market research or homework help.

You may find Nagle's book on pricing models helpful. $500 for generic info on weight loss seems ... optimistic. And the monthly subscription model, you should quantify the difference between Weight Watchers and what you offer.

Just giving you a nudge on what direction to take.
posted by stowaway at 4:14 AM on October 30, 2012 [4 favorites]

1 doesn't offer enough value on its own. 2 is at least customized and detailed, so that's better, although you could do that and also throw in the videos. Frankly I wouldn't invest in either, but I think 2 is more likely to sell services (albeit at a greater cost to the business).
posted by J. Wilson at 6:02 AM on October 30, 2012

Your Option 1 works on the assumption that these women don't know how to lose weight - that the information you're going to provide is in some way new/different - a revelation that will magically result in weight loss for your customers. This is highly unlikely. We are constantly bombarded with weight loss advice and there are stacks of information available for free online. There are also thousands of weight loss books available. You're not selling willpower for $500 or a stress free life. I disagree that this option offers more value than weight watchers.

Option 2 is far more likely to be successful for your clients. Its offering something that they need - accountability (a big part of how weight watchers works is the weekly meetings) , a personalised plan that works around their personal circumstances and someone they can talk.

In addition to the 'public humiliation' (a powerful motivator) aspect of weight watchers it calculates your daily calorie requirement and converts it into 'points' - a much smaller, easier to keep track of number. They also sell a large variety of microwave meals and other prepared products with the points value printed on the packaging, they also have a massive database of foods with calculated points values. Its a basic calorie counting plan (although IIRC they adjust for fibre content) simplified into a smaller 'points' number. Even without the meetings, it works for lots of people so long as they can stick to it - lets face it, that's the biggest problem with all diet plans, sticking to the plan.

TBH it sounds like you really don't understand your target market.
posted by missmagenta at 6:10 AM on October 30, 2012 [7 favorites]

You definitely cannot charge that price for the first plan. If you could, then it would be the easiest business ever, because once you've made the videos, you have very little overhead cost - because you're not providing any dynamic content for the client.

I've used a service like that, only they emailed you a video every DAY for 3 weeks and it was free. How could they afford to do this, well, they used the emails and the videos as a hook to try to get you to come to their website and subscribe/purchase the paid content, which was a magazine subscription mainly but also a membership to the group which apparently provided access to other information/forums and benefits.

So I think you could use the first model as a hook to get people interested in and paying for the second part of the model if you offered it for free. However, you clearly need to do more research on how this compares to what else is out there. Checking in on what competitors offer should not be an afterthought while you're wrapping up the marketing plan, it should be part of the baseline assessment you do before you make the decision that this is a product worth marketing, and you need to look at a variety of different offerings, not just the most famous one that you happen to have heard of. I'm no businessperson but think of it like doing a research paper for college - if you wrote your paper with only one scantily reviewed source, you wouldn't get a very good grade...
posted by treehorn+bunny at 6:36 AM on October 30, 2012 [2 favorites]

The Weight Loss and Exercise market is so over-saturated that it would take an incredible amount of visibility to steer anyone to your site, let alone get them to release dime one, once there. There is so much marketing noise around this market, that you would have to have some kind of amzaing celebrity endorsement, an infomercial or some other way of attracting people to you.

For your competition you have The Biggest Loser, and both of the trainers on there have their Weight Loss stuff. Hell, my damn treadmill has a connection to Jullian Michaels.

We don't even need to get into supplements, cleanses, and other stuff that generates monthly income.

Weight Watchers has been around for 50 years, and the group meetings, support and huge penetration into the actual grocery store makes it ubiquitious. Even if you aren't a Weight Watchers member, you can still buy Weight Watchers frozen treats, entrees, snack cakes, etc.

What is the hook? What is it that you have, that's different than the other 500 different things out there? What promises do you make? What support do you offer? Why would I, a fat woman, want to give you money?

My gym offers nutritional guidance (it's crap, but the buff guy talking about it has credibility and we actually know each other). My gym offers a personal trainer who knows me, knows my limitiations and will not only design a workout for me, but will coach me through the workout.

Jenny Craig and Nurtisystem will send me actual food. Screw a grocery list, screw my actually preparing the food. It's brainless. Send me food. I eat food. I lose weight. (Yes the 'food' is disgusting, but hey, some people like the structure of it.)

Duke University offers a weight loss boot camp, where you can go for two weeks and get intensive nutritional counseling, exercise guidance, a diagnostic of any medical conditions that might be causing issues with weight gain. Insurance plans may pay for it.

Curves provides a comfortable place for fat ladies to workout. There's a comeraderie there, and it's right down the street. I only have to commit 30 minutes, three times a week.

Oh, and what about the supplements that promise quick results? I don't even have to DO anything except swallow a pill (and a healthy dose of bullshit). Xenedrine, Sensa, Lipozene, it's all so freaking easy.

My point is that other than opening a restaurant, I can't think of anything more doomed to failure than the website that you are describing.

Trust me, as someeone with an MBA, and as a fat person, buddy, you are skating on thin ice with this. The pricing model is the least of your problems.
posted by Ruthless Bunny at 7:05 AM on October 30, 2012 [6 favorites]

None of this matters if you don't have honest-to-FSM clinical data backing up your assertions. Re-gain rates are incredibly high, so if you can't show that over time, more than 5% of your users not only INITIALLY lost the weight, but KEPT the weight off for more than 5 years, you're not going to set yourself apart from any other pre-existing weight loss program.

Oh, and yes, your price points are ridiculously high unless you can genuinely promise a statistically significant higher likelihood of weight loss and maintenance.
posted by smirkette at 7:11 AM on October 30, 2012 [1 favorite]

You seem, in option one at least, to be coming at this from a position of "Fat women just don't understand what to do to lose weight! I will teach them in 8 weeks--it'll be great, they will be able to magically lose weight after that!"

This is just not true. I don't think you understand your target market.
posted by snorkmaiden at 7:21 AM on October 30, 2012 [13 favorites]

Another issue with your model in comparison to WW is that you offer no new beginnings, which are tremendously important psychologically. In addition to the comaradery and accountability that a weekly meeting and weigh-in offers (even on-line), it's a reboot: whatever happened last week is behind and it's a new day in a new week. That keeps people engaged (and paying) for the months and years it actually takes to lose significant weight.

And fat people like me will suss out your contempt for them and your lack of compassion from the get-go.
posted by carmicha at 10:09 AM on October 30, 2012 [3 favorites]

Response by poster: Carmicha, I don't have contempt or lack of compassion

I am exploring businesses in which I have a lot of passion and I am great at (I can spend, and have, all days reading about nutrition, studies; have a lot of knowledge in this area and am obsessed with fitness). I really believe I can help women who struggle with this (I have with friends and family) with a fool proof plan - my original choice was option #2: tailoring an exact plan for an individual's goal and providing exact shopping lists, recipe/meal plans (not just random recipes) but a combination of what needs to be eaten for that day, and workouts to follow.

There is so much conflicting information on the internet and a lot of it is crap. For instance if weight watchers is only about calories in, calories out, eat whatever you want then o_O. Calorie restriction is important but eating all your calories in carbs and/or dairy for example, isn't gonna get the job done or be nearly as effective as what I propose!

Less choice or less opportunities to make the wrong choice, confusion about what to eat or what workout to do, not going grocery shopping blindly and picking up items on the fly that aren't good for you, meals consisting of yummy whole food (pre-packaged meals are not yummy and packed with sodium) and the understanding of why you're doing what you're doing, I would think would be a lot easier and valuable to those who prefer the structure

Obviously, I can't go into all the details about the business here but the diet isn't based on the standard american diet so there would be a differentiation between my program and many of the other general weight loss advice/programs out there
posted by soooo at 10:52 AM on October 30, 2012

with a fool proof plan

no such thing. With no credentials or experience you're highly unlikely to command the kind of prices you're suggesting either.

the diet isn't based on the standard american diet

That's a negative not a positive. The more ostracised your clients are from the rest of their family and friends, the less likely they are to stick to the plan - another reason weight watchers is so successful, you can eat the same as everyone else just less of it - its not a huge lifestyle change.

If you're wanting to offer a personalised service, don't forget you'll need to consider medical conditions, vegetarians, vegans, food allergies and intolerances - that's why RDs go to school for 4 years, there's a lot more to diets and nutrition than reading some studies on the internet. You'll also probably want extensive liability insurance. For a proper personalised service I think your price point is too low, I'd expect to get at least 30 minutes of your time per week for reviewing my case history (the more clients you have the harder it will be to remember it all), my progress, answering questions and planning the next week - that could easily run in to 1 hour plus. That's 2 hours per client per month for only $40 - maybe $20 per hour seems like a lot of money at your age but its not and that's not factoring in overheads like hosting costs, insurance, time out for admin tasks.

If you're really passionate about helping people, get qualified, find a few willing volunteers and help them for free to prove your concept/get testimonials. If your plan really works then getting new customers by word of mouth should not be difficult but I would be looking at $100 an hour minimum for that kind of service, pricing yourself too low can actually put off customers. (although being a svelte young 20-something is quite off-putting too - its going to be hard for a 38 yr old single mother of 3 for example to feel like you understand the difficulties she's facing)
posted by missmagenta at 12:11 PM on October 30, 2012 [4 favorites]

…the diet isn't based on the standard american diet…

as missmagenta said, this isn't a positive to me; it's negative because it means that i will have to go out of my way to prepare food differently or to have to find the "right" kind of food when i go out to eat—which will make me less likely to stick to it.

i recently lost about half of the 30lbs i gained during a 14 month stressful contract job, and am continuing to lose. i'm doing it through old fashioned calorie restriction (eating the same foods i have been eating—more healthy than not but definitely could be healthier—just less) and exercise. in fact, because of the running and the weight training, i am actually more svelte and toned, and look better at my present weight than i did at this same weight when i wasn't exercising at all. so would i pay for the services you are offering—especially pay that much? no. if i am going to pay for anything, i'd rather put that money toward a trainer, or someone who i could see in person so that i'd be accountable. it's too easy over the internets to end up ignoring the advice given. i'd also want those ppl to her certified in their area of expertise—not just be some random on the internets whose only "qualification" was advising their friends and family on how to lose weight.

and as someone upthread mentioned, this isn't the first business plan you've thrown up here (which is totally fine—where would the world be without entrepreneurs?)—but none of them seem particularly well thought out in terms of the market you are trying to reach (or even who that market is) or particularly compelling or unique as a product.
posted by violetk at 1:14 PM on October 30, 2012 [1 favorite]

Weight Watchers isn't just about calories in vs out. And the fact you don't know that - don't know IN DETAIL every little thing about how your major competitor operates is a big problem.

I would be a perfect target for a service sort of maybe kind of like this. I have weight to lose, I'm lazy as fuck and I have disposable income (in fact, I'm pretty sure WW takes a chunk of money from me every month but I don't even care to notice it which means I can afford it AND I don't find it engaging). But, like many women who've struggled with their weight their entire lives and who, like, can read, I'm a nutritional savant. I know how this all works, I know the latest research and I know what works for me and doesn't. So I'm a particularly hard sell and I have half a dozen girlfriends just like me.

I would never pay for videos. Never. I wouldn't even watch them if they were free.

I would pay for personal service. In many areas of my life I pay for precisely that in fact. So option 2 is the only way to go. But I think the barrier there is start up - both having someone pay for something they can't see yet and, probably, time. If this were really to be effective you'd have to gather a lot of information about me which is going to take my time as well. That's a couple of big barriers to get over.

FYI: I have looked for personal nutritionist services (though I would want one local, I probably would not buy this strictly over the internet) and they charge a few hundred dollars for an initial personal package and anywhere from $50-100 to tweak it over time. This is who you want to compare to (and this doesn't include an exercise component).
posted by marylynn at 2:03 PM on October 30, 2012

Carmicha, I don't have contempt or lack of compassion


What if you gave away your content to show its value and demonstrate why your approach is uncommon and effective? Have you considered building a following by blogging about your approach and monetizing in ways that evolve out of what your readers seem to desire? Once you build the following and create content, you can begin developing a media identity, respond to HARO queries, etc. Just as FlyLady (housecleaning) sells tools she endorses and Unclutterer (tidying) wrote a book and provides coaching and consulting to the chronically disorganized, to name just two, you could turn your expertise into revenue streams by demonstrating to people that your methods work. If helping people address weight/nutrition/fitness is your passion, then do what you love, spread the word, be diligent, and the money will follow... but assuming you can just sell access to videos and group coaching sessions right off the bat, especially without thoroughly researching the competition, is naive.
posted by carmicha at 8:18 PM on October 30, 2012

You know, you'd probably be better off reading reviews of weightwatchers instead of just dismissing it. Then you'd get a sense of its appeal and the gaps ppl experience in using it
posted by spunweb at 3:04 AM on October 31, 2012

Response by poster: Thanks all, I appreciate the feedback - doing more research into this and think the personalized service is definitely the way to go
posted by soooo at 6:44 PM on November 8, 2012

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