Tiffany Davis MKTG 4683-001 eHarmony Case Analysis The primary decision is how eHarmony should address recent competitor actions from Match, Chemistry and Yahoo Personals. By formulating an analysis of eHarmony’s position in the market and the alternative business paths, the informed final decision is made. Strengths • • • • •
• • •
• • • •
Experiencing membership growth while competitors have stalled Serious relationship targeting Creator known for relationship advice Able to convert active members to paying members three times more effectively Integrated dating system with Personality Profile, matching algorithm, Guided Communication system 14 million users in first seven years Regulates members Research proves successful couples on eHarmony significantly happier than couples who met through other means Four to six months to match an eventual marriage Fast Track option led to higher renewal rates and higher lifetime values eHarmony members are 2 percent of America’s marriages Successful advertising campaign
Opportunities • • • • • •
70 percent of people judge mates by feelings rather than on their functions Marriage rate lowest in history Divorce rates around 45 percent By 2005, 16 million claimed to have visited personal dating site Possibility of feedback from matches and dates Religious group usage
Weaknesses • • • • • •
•
Premium charge for service 45 minutes to two hours to complete questionnaire Declines members Avoids lesbian and gay markets Doesn’t use feedback information from turned-down or bad dates Non-paying members could communicate with subscribers if subscribers initiated interaction High marketing expenses
Threats • • • • • • • • • • • • •
Competitors copying product features Match, its largest competitor, increasing advertising by 80 percent Match priced 10 percent lower Initial negative connotations like internet dating is for the desperate After 2005, Internet users visiting personal dating sites dropped Free do-it –yourself sites have higher visitor engagement Free-do-it-yourself sites put cap on service charges People can misrepresent themselves Match takes advantage of overseas market Match increases advertising expenditures Match creates Chemistry, aiming at serious relationships too Chemistry sells membership to all Chemistry allows feedback
Positives Negatives Alternative One: Defend leader position in the long-term relationship segment • •
Increase paying membership Retain user satisfaction
• •
Increase advertising budget Loss of confident matches with less membership barriers
Alternative Two: Expand market to medium-term relationships • •
Increase membership Differentiation with matching algorithm
•
More competition
Alternative Three: Build network of eHarmony life stage websites •
Increase network of memberships
• •
Increase research and development costs Non-paying membership
•
Relevance of research to non-Americans
Alternative Four: Rapid geographic expansion • •
Increase membership Avoid late-entry to foreign markets
Recommendation The above analyses lead to the recommendation to follow alternative one. Despite the increase in advertising budget, the defensive maneuver stops new brands from gaining a foothold. eHarmony’s major selling point is its ability to create well-matched, lasting relationships in an average of six months with its Personality Profile, matching algorithm and Guided Communication system. Emphasizing its strengths while drowning its competitors with its promotions help assure a leadership position. The other options force a rebranding or new branding scenario, which consumes resources and strays from eHarmony’s strengths and opportunities. eHarmony has already established a base in the U.S. and should instead support that healthy growth.