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Diet Companies’ Dirty Little Secret – Low Pay

Today's article in the NY Times, about Weight Watchers group leaders and their complaints about low pay brings up a critical topic foe the weight loss industry that's been around since the beginning - poor pay for weight loss "coaches", "counselors" and "group leaders" - the people in the trenches that do the daily grunt work of signing up, meeting with and motivating members.

Weight Watchers has traditionally paid the best, and attracted some of the best people. But, with people struggling in a still bad economy, they have every right to complain if they are underpaid. This comes as somewhat of a surprise to us at Marketdata. We've all heard the horror stories about diet coaches at LA Weight Loss Centers and how they are forced to aggressively sell company bars and supplements, and browbeat clients into paying up front for yearly contracts. That's a big reason why they went bankrupt and nearly disappeared as 800A+ centers closed. LA Weight Loss was far from the only diet company with this problem, however.

Low pay and high turnover are par for the course in this industry, and it has been this way since Marketdata began tracking the market in 1989. In the early 1990s, when we published a newsletter called the Diet Busine$$Bulletin, we did extensive research and surveys, and found that the typical weight loss counselor made $15-19,000 per year, with a big part of that coming from commissions. Alas, little has changed with that pay scale in 20 years.

Weight Watchers group leaders are complaining about being paid the minimum wage and being pressured to work many hours unpaid--while celebrity spokespersons like Jennifer Hudson and Jessica Simpson earn millions. Some leaders say the $18 base rate for running 2-3 hr. meetings has not been raised in 10+ years. No mileage reimbursement either. Many leaders stay because they truly care about their clients, and were successful losing weight on the program.

These leaders are usually more highly educated people than the average weight loss consultant (which are usually just clients that lost weight with a program and are internally trained (mainly in sales). Two years ago, Weight Watchers reached a $6.2 million settlement to end a class action lawsuits in California where employees complained about minimum wage violations, off-the-clock work, and paychecks that didn't explain how wages were calculated.

We'll be watching to see how WW handles this situation. Its employees have always been one of its strongest assets, and it's critical to keep them happy.

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