Business
The online dating and personals meets a pent up need of individuals seeking to connect for relationships in the digitally connected world. A number of business firms have capitalized on the online dating and personals space. This paper would assess the profitability of eHarmony.
eHarmony focused on singles seeking serious relationships. This was a market segment hitherto untapped. Dr Warren, eHarmony’s founder, also introduced matching on the basis of long term compatibility (Piskorski, Halaburda and Smith 4). These niche capabilities resulted in eHarmony capturing unoccupied space in the personals industry. The company had the advantage of portraying itself as a serious contender in the dating space as its founder, Dr Warren, was a recognized practicing psychologist who focused on marriage and family relationships and had a number of books to his credit. eHarmony’s focus on long-term relationships resonated with Christian evangelical organizations, which resulted in its growing popularity. eHarmony’s niche space resulted in the company being able to convert active members to paying members at three times the industry average. eHarmony’s distinguishing feature of creating Personality Profiles (Piskorski, Halaburda and Smith 5) that meshed with matching algorithms and further led to guided communications allowed the system to attract subscribers. The company focused on genuinely single people, and denied memberships to married people. Though resulting in short term losses, the approach resulted in a good quality pool of subscribers, fuelling the company’s long-term profitability. The company remained prudent in its marketing efforts and bought media spaces at lower rates, shoring up their bottom line. As a result of its niche capabilities, strong algorithms, diligently chosen customer base and astute marketing, eHarmony remains a profitable company.
The long-term profitability of eHarmony needs to be assessed by taking the nature of competition in mind. While Match, eHarmony’s biggest competitor, has had an aggressive approach towards acquiring clients, Match has put quantity over quality, and has not filtered out subscribers who are not serious about long-term relationships. As a result, Match’s business model is suspect, as many subscribers have reported a fairly low ‘successful first meeting’ rate (Piskorski, Halaburda and Smith 13). Therefore, it is expected that while eHarmony might lose revenue to Match in the short term, it would regain the lost revenue over the long term once subscribers realize that eHarmony has the better pool of genuine subscribers looking for long term relationships.
Looking ahead, amongst various options to retain profitability, eHarmony must retain its Unique Selling Proposition of being a space that attracts genuine subscribers looking for long tem relationships. Once the revenue stream of the company improves with the anticipated decline of Match, eHarmony could pursue the option of geographic expansion. Over the long term, eHarmony can consider branching out to offer solutions for other lifetime transitions, such as weddings, pregnancy-fertility, parenting and elder care. In effect, eHarmony should adopt a graduated approach towards expansion and revenue consolidation, commencing with the fundamental approach of defending its core operations in the spirit it set out with.
Work Cited
Piskorski, Mikoraj Jan, Hanna Halaburda and Troy Smith. “eHarmony.” [Case Study].Boston: Harvard Business Publishing, 2008. Print.
