OPTAVIA’s journey over the last two years very closely resembles the lives of the very community it serves.
CEO and board member Dan Chard and his new team understood that the evolution of OPTAVIA was a turning point for the parent company.
As a health and wellness brand, OPTAVIA works with clients seeking a change, and the simplified process is this—those customers take action, transformation occurs, and those closest to the customers are often inspired to change as well. OPTAVIA’s story echoes that process— leadership recognized a change was needed, action was taken to reimagine the brand, the new brand was realized, and that change impacted the entire business model of OPTAVIA’s parent company, Medifast.
Dan Chard
| Medifast/OPTAVIA Founded: 1981 Headquarters: Baltimore, MD Top Executive: Dan Chard Annual Revenue: $301.6 Million |
The Beginning Of A (Re)Brand
This transformation story begins with Medifast, a Baltimore-based manufacturer and provider of clinically proven, healthy living products and programs. Founded nearly 40 years ago, Medifast was best known for offering its line of packaged meals, shakes and snacks through four distinct distribution channels—directly to consumers online, through physicians and weight loss centers and via a network of direct sales coaches. That direct sales channel was created in 2002 under the name Take Shape For Life®. In its first 13 years, Take Shape For Life® grew to nearly 12,000 active earning coaches working with customers across the U.S. to lose weight and establish healthy eating habits.
In 2016, Medifast announced that Take Shape For Life® would be evolving into a new brand—OPTAVIA—with a fresh new product line and a new mission—“Lifelong Transformation, One Healthy Habit at a Time™.” Existing Take Shape For Life® coaches would remain with the company and have the opportunity to introduce this evolved brand to their customers. The rollout of the new brand would take a year—from the initial announcement at the company’s 2016 Annual Convention, to be completed by the next year’s event.
“Bringing it all together–the clinical, medical credibility (of our medifast history) with the lifestyle of optavia brings both the credibility of the past and a vision for the future, which inspired our integrated coach model.”
— Dan Chard, Medifast/OPTAVIA CEO
Shortly after the announcement, Medifast also announced the installment of a new CEO and board member, Dan Chard, a 25-year veteran of the direct sales and consumer products industry. Chard and his team understood that the evolution of OPTAVIA was a turning point for the parent company.
“Medifast as a company and a brand has deep roots in the medical area because we were founded by a physician,” he shares. “At the same time, we also realized that our product line alone wasn’t reflective of the lifestyle we were trying to promote. Bringing it all together—the clinical, medical credibility (of our Medifast history) with the lifestyle of OPTAVIA brings together the credibility of the past and a vision for the future, which inspired our integrated coach model.”
The integrated coach model represents a significant shift for Medifast and the company’s multiple channels of distribution. Today, Medifast leverages its multichannel experience to deliver the best possible results for the client. “We continue to work with doctors, (but today) we offer the ability for those doctors to become either coaches themselves or have somebody in their office become a coach to fulfill that mission,” explained Chard.
“OPTAVIA is represented by a community of coaches who help their clients achieve optimal health and well-being.”
— Nick Johnson, Medifast/OPTAVIA Market President
Medifast continues to sell directly to consumers online, through what they call “Med-D” or “Medifast Direct,” but are working to transition that channel as well to a coach-led model. “We’re actively testing and re-orienting those efforts to be focused on client acquisition or lead generation for our coaches because we know our clients are more successful if they’re linked with a coach,” he says.
OPTAVIA Today—Coaches Lead The Way
Nick Johnson joined the company in January 2018 and manages the oversight and strategic direction of OPTAVIA as Market President, OPTAVIA USA.
“OPTAVIA is represented by a community of coaches who help their clients achieve optimal health and well-being,” Johnson shares.
It’s those coaches and their stories of transformation that drew Johnson to OPTAVIA and the groundswell behind the company’s tremendous growth. He says when you listen to those transformation stories, things start to change, or at least they did for him. And it was a large part of the reason why he wanted to join this mission. “I saw they’re real, they’re authentic,” he says. “I look at it this way—our coaches really give people their lives back. They break bad habits and replace them with healthy ones.”
The coaches utilize OPTAVIA’s line of food products called “Fuelings,” available in kits or as individual items, ranging from full meals to light snacks. The full line is separated into two categories—Essential and Select. OPTAVIA products are only available through independent coaches, which gives customers support, encouragement and accountability beyond the products purchased. As Clients experience positive results—whether it’s weight loss, an increase in energy or healthier habits—they often become coaches themselves.
According to Johnson, OPTAVIA’s coaches are the company’s key differentiator—making it possible to stand out in the crowded health and wellness space. “Our coaches differentiate themselves by focusing on mission first,” Johnson says. “This idea of lifelong transformation, one healthy habit at a time is not just a mission statement, it’s words that they live by. And they don’t focus on transactional success, they focus on transformational success.”
Preparing coaches to inspire that kind of success is an integral part of OPTAVIA’s initial training process. Each new coach purchases an OPTAVIA Coach Kit, which provides that initial information he or she will need to get started. “The kit is an important piece,” Johnson explains. “It gives them health assessments they’ll use with their clients, which are really an exploration into that client’s life, and ultimately helps them recommend the program that is best suited to that person’s specific need.” Johnson says their coaches are well trained to focus on those things, on the underlying behaviors. So, it’s not just, ‘Here’s your weight loss goal and here’s some food, and just follow the system,’ it’s, ‘Help me understand why it is that you want to transform. Why it is you want to get healthy? Tell me a little bit about that.’”
On Medifast’s second quarter, 2018, conference call the company reported OPTAVIA had 19,700 active earning coaches. In the second quarter, 2016, the year the brand transition was announced, the company reported 12,800 active earning coaches.
Successes, Challenges and Connectivity
Reshaping distribution channels, aligning thousands of existing coaches with new leadership and adjusting to a refreshed business model was not without challenges for Medifast and OPTAVIA.
For people who have been around the company for a long time, making a transition and trying to understand how that integrated coach model should work and why there’s benefits to it has required a different level of partnership and communication. “It’s been a little bit of a challenge to re-orient ourselves around what the coaches do and how they’re serving their clients, and at the same time having Field leaders understand the goals and objectives of the company,” Johnson says. “Bringing our teams together has been a critical element in our recent success.”
One primary focus of Johnson and his team is to create repeatable business rhythm he refers to as “The Compass to Success”—a business roadmap of sorts for OPTAVIA coaches. “We talk about that compass a lot with the field,” he says. “That’s really been the next stage of this transition—how can we provide our coaches, our field leadership, with enough view of what’s lying ahead so they can plan their activities according to what the company is putting out for them?”
Part of that strategy is efficiently communicating with both customers and the field and that means digital. “Everything has transitioned to digital,” says Johnson. “We conduct the majority of our communication with the field, including recognition in private coach Facebook groups. Meetings, client support calls, coach support calls, business calls—everything is done through Webinars. It’s all digital these days.”
“This idea of lifelong transformation, one healthy habit at a time is not just a mission statement, it’s words that they live by. And they don’t focus on transactional success, they focus on transformational success.”
— Nick Johnson, Medifast/OPTAVIA Market President
Pick up your print copy of the September 2018 issue in which this article appeared.
According to the CDC, 70% of the U.S. adult population (millennials included) are overweight, and over 30% are obese. People across all ages and demographics are experiencing unfortunate growth in that trend; this is why Johnson is making sure the company has an active presence on social platforms that reach millennials.
Coaches are encouraged to share their personal stories of transformation on social media and, in turn, encourage their Clients to share as well. This presence on social media is just one way coaches are working on the go. Last year, OPTAVIA launched a new back office system with tools and technology for coaches to manage their businesses from their smartphones. “We not only deliver those technologies but we have to stay on top of those technologies to make sure that they’re relevant, make sure that they’re functional, and make sure they’re addressing the needs of our ever younger audience members,” adds Johnson.
Continual Transformation
While the company doesn’t share OPTAVIA-specific financials, publicly traded Medifast attributes strong earnings results to the brand. “The growth of our coach base, along with improved revenue per active coach, drove our strong second quarter financial results,” Chard said on Medifast’s August 2nd earnings conference call. Quarterly year-over-year revenue growth accelerated from 40% growth in the first quarter of 2018 to nearly 55% growth in the second quarter of 2018. This marks the fifth consecutive quarter of year-over-year revenue growth and the sixth consecutive quarter of sequential revenue improvement. The second quarter was also the largest revenue and profit quarter in the history of the company resulting in second quarter diluted earnings per share of $1.16, ahead of second quarter guidance of $0.94 to $0.97.
“That’s the way we talk about the partnership. We talk about the shared vision because of our common mission, a lifelong transformation one healthy habit at a time.”
— Dan Chard, Medifast/OPTAVIA CEO
Recently ranked 56 on Direct Selling News’ Global 100, OPTAVIA and Medifast is expected to grow. In February, 2018 the company announced an upcoming international expansion to Hong Kong and Singapore, and in July, it introduced a new product line focused on healthy hydration, a facet of OPTAVIA’s focus on healthy habits. “Our long-term strategy is to continue to build on healthy habits,” says Chard. “We’ve got healthy eating, we’ve introduced hydration. The other healthy habits that we focus on are healthy aging, healthy sleep, and healthy exercise, so we’re quite transparent in terms of the habits we’re focused on and where our future will be.”
OPTAVIA is more than just a brand within the Medifast family—it’s redefined Medifast’s focus and trajectory. Chard refers to it as a partnership. “If you come to our headquarters, you’ll note the statement on the door—‘Medifast and OPTAVIA, a Shared Vision for Success.’ That’s the way we talk about the partnership. We talk about the shared vision because of our common mission, of lifelong transformation one healthy habit at a time.”
