The CMO Interview

Pepsi Vet Nicholson Preps Equinox for Expansion

The Gym Chain's First CMO Explains Her New Role for a Brand That in Many Ways Is the Antithesis of the Cola Giant

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Once charged with marketing colas to the masses, Cie Nicholson, former CMO of Pepsi-Cola North America, is now immersed in the premium health-and-wellness business as CMO of Equinox.

Nicholson became an Equinox member when her condo's gym closed for renovations -- before she was approached for the CMO job.
Nicholson became an Equinox member when her condo's gym closed for renovations -- before she was approached for the CMO job.

A mass brand Equinox is not. Members are greeted by name; locker rooms are stocked with Kiehl's products; and top stories from the New York Times are printed out for execs looking to multitask during their workouts. During a tour of Equinox's SoHo location in downtown New York, Claire Danes was spotted lifting free weights.

"It's just a part of a whole lifestyle," said Ms. Nicholson. "It's all very purposeful, who we partner with, where we go and who we talk to. We're making sure people have the right experiences. That's always been our formula for success."

Ms. Nicholson joined Equinox six months ago, about two years after departing Pepsi, a brand that spent $150 million in measured media in 2010, according to Kantar Media. There she held positions ranging from director-innovation in the company's fountain-beverage unit to marketing director at Mtn Dew. She was also heavily involved in two startups, Pup to Go and Games That Give, prior to joining Equinox.

In her new role, she's been charged with growing the marketing team for a company that spent about $5 million in measured media last year, according to Kantar Media, developing the branding around Blink, a pared-down, less-expensive gym concept, and Pure Yoga, a dedicated yoga-studio concept, and exporting Equinox's identity to new domestic and international markets. It's a tall order, but Ms. Nicholson's clearly enthusiastic about the role. In a stroke of serendipity, she became an Equinox member when her condo's gym closed for renovations, about six months before CEO Harvey Spevak approached her. And during visits to Blink's NoHo location, as well as Equinox's SoHo gym, she greeted staff by name and sang the praises of various yoga and cycling classes.

Still, old habits die hard. Over lunch at Savoy in SoHo, Ms. Nicholson ordered a burger and Diet Pepsi, to which she was told only Diet Coke was available. She drank water.

Here, Ms. Nicholson talks about how Equinox will be translated overseas, why the recession didn't phase the brand and the biggest differences between Pepsi and Equinox.

Ad Age: Clearly, there are a lot of differences between Pepsi and Equinox. What's one of the biggest?

Ms. Nicholson: There are more growth opportunities. Obviously the beverage category is constrained. In carbonated soft drinks, you started to see a decline, and you had two big competitors fighting it out for market share. That term, market share, has not come up in my first six months here in the building. It's an irrelevant measure, because it's such a fragmented industry.

Ad Age: What's it been like to go from a staple product that everyone knows to Equinox, which is more of a premium brand and isn't as well known?

Ms. Nicholson: In the cities we're in, we're very well-known. There's not a person in Manhattan that's not familiar with Equinox. Pepsi was so well-established in its life cycle, whereas at Equinox, we're only 20 years old, so we're really just a teenage boy. We have a great, well-established image, but globally there's still a lot more upside [to realize]. We're opening in London, our first international market, and that will be the gateway to Europe. And we're looking at Canada, the Middle East, Asia.

Ad Age: How will you translate the Equinox brand overseas?

Ms. Nicholson: Every place we go into, every club is different. We try to be indigenous to the area, so we'll do the same thing in London. We'll bring over everything that's been successful. We'll work with some of the local businesses that make sense. We're making all sorts of great contacts in London. Kiehl's is a great partner for us, and they're in London. Out-of-home in the right locations; print in the right books; associating with the right digital sites; the right mix of direct marketing.

Ad Age: Another growth opportunity is Blink, which is just $20 a month for a membership. How is that being received?

Ms. Nicholson: I had nothing to do with the launch, but I was able to get involved right before and see the whole thing go through pre-sale. It's been an unbelievable success. We like where it's headed, the name, the color scheme, the "Blinkisms." There are a few things we'll tighten up, but we don't want to change too much, because it seems to be working.

Ad Age: What impact did the recession have on the brand?

Ms. Nicholson: In all of my analysis, very little. Whereas most companies were going down 25%, 30%, 35%, we had a very small dip. People who lost their jobs were still working out. You have your instructor or class that you love. Your friends come here. To walk away from that to go somewhere else, it just didn't happen.

Ad Age: When you were appointed, Mr. Spevak told me that you'd be building out the marketing team and the budget would likely be increasing. How's that panned out?

Ms. Nicholson: We have added more people and restructured the marketing group to put more focus on social and digital. We're working much more closely with sales and trying to really attack the opportunities in various markets, because they vary. I can't give you specific numbers, but [the budget] is definitely up a double-digit percentage. Everyone was jostling for money in 2011, and marketing definitely got a good piece of the pie. So hopefully we'll show that's successful, and there's a payoff, and it will continue.

Ad Age: Your internal team is fairly robust; you brought creative for the most recent campaign in-house. Why not work with an agency?

Ms. Nicholson: We used Terry Richardson [a well-known fashion photographer]. And it was great working with him. Once you took the agency out of the picture you really then have to do all of this stuff yourselves, which was great given the timeframe and vision we had for the campaign. It just made sense. We're not trying to cut out the agency. And it doesn't mean we won't work with [agencies] again.

Ad Age: What consumer research do you do, and how do you gather insights?

Ms. Nicholson: In January I think I went to all but two clubs in the country. That's not an every-month thing, but each month we go to as many clubs as we can. I went out to Blink in Paramus and Yonkers, and every person that was leaving, I was like, "Hey can I ask you a question?" I don't know if they thought I worked there or if they thought I was an annoying market-research person, but the amount of insight I got in 45 minutes talking to 40 different people or so was amazing. We get insights in different ways, which are in some ways more valuable.

Ad Age: I can't sit down with a former Pepsi CMO and not ask your thoughts on Diet Coke surpassing Pepsi as the No. 2 soda brand.

Ms. Nicholson: It was surprising, and I'm sorry to see that flip happen. Obviously, it's still a strong brand, and I'm sure they'll recover.

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