Why Most Wellness Companies Fail The reason that so many wellness companies fail is that they fail to understand the core mechanics of how people perceive wellness
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The inherent problem with wellness is that it's very vaguely defined. It means different things to different people. The Global Wellness Institute defines wellness as the active pursuit of activities, choices and lifestyles that lead to a state of holistic health. Even the structured definition of wellness seems to have components that can be interpreted differently by different people.
Defining wellness the way Global Wellness Institute defines it gives rise to many facets of wellness, which can be codified into the following categories: (a) better environment, (b) social wellness, (c) better lifestyle, (d) better appearance, (e) better fitness, (f) better health, (g) mental wellness, and (h) spiritual wellness.
The reason that so many wellness companies fail is that they fail to understand the core mechanics of how people perceive wellness. A combination of "three' governing parameters drives any action of the end-consumer when it comes to wellness: (a) tangible outcomes, (b) behavior change, (c) belief anchors.
All wellness companies that have failed have either missed to address one of the three governing parameters or have been unable to align them. An analysis of investments by the top venture capitalists in the wellness space, including HealthQuad, India Quotient, Sequoia, Matrix Partners India, Nexus Venture Partners, Elevation Capital, Titan Capital, Java Capital, Cactus Venture Partners and 9Unicorns shows that their evaluation methodology of wellness brands rests of these three parameters, in one form or the other.
The Top 5 Reasons That Wellness Companies Fails are as follows.
Not Defining a Tangible Outcome: Any wellness brand or product that does not have a clearly measurable end goal is bound to fail. This is the reason that even highly evolved products with vaguely defined outcomes like "good internal health" will fail. In contrast, even mediocre products with sharply defined goals like "30% lesser hair fall" will find an initial audience.
Asking the User To Change: If a wellness solution requires the consumer to change their existing behavior, it is bound to fail. Most wellness companies launched by wellness professionals end up falling into this trap. Their solutions are designed for professionals and require an ordinary person to make too many behavior changes, which could be hard and challenging to make into their routine.
Not Anchoring Onto Existing Beliefs: Why do brands like Colgate keep launching new product variants with ingredients like neem, salt, charcoal, and the likes? The reason is that there is a general consensus in the population at large regarding the efficacy of these ingredients. This trust has been built over several decades or even centuries. Trust is created when a brand attributes its product's goodness to something that people already believe in.
Violating Functional Mental Models: Can a brand that produces excellent fitness equipment also have great nutrition supplements? Technically, there is no blocker in doing such a thing. However, this is not the way the end consumer perceives things. End consumers like to think of a brand as an expert at "one single thing'. A brand trying to be a champion of multiple wellness solutions typically fails.
Overpromising Value Proposition: This is one of the most common reasons that wellness brands fail. In order to make the first sales, most wellness brands overcommit to the outcome that the consumers can obtain from their product. Consumers are typically realistic in their expectations until the brand redefines them by overpromising and ends up not meeting it. This creates the highest possible distrust and hence meager repeat sales. The brands that overcommit dies a sure and cruel death.
In summary, the success of wellness brands is governed by the "three governing parameters'. Any misalignment within these three is a sure shot way for a wellness brand to fail.