Eharmony - Growth Options

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Which of the four growth options should Waldorf pursue? Explain the positive and negative implications of your recommended strategy. Option #1 which calls for defending eHarmony’s position as the leading matchmaking company in the long-term relationship segment of the market – appears to be the optimal strategy. It is clear that beating back Match or Chemistry by rapidly increasing the number of paying members is the litmus test. eHarmony has the opportunity to use new technology to convert non-paying members, who have already created profiles in their member data base, to paying subscribers. The strategy that is being recommended is (i) targeted advertising using database analytics, (ii) a review of current advertising expenditures for opportunity to re-allocate, and finally (iii) recommendations and models to measure the effectiveness of targeted marketing. Technology and algorithms that “match” two potential relationship-seekers typically is the first line of strategy that is discussed in the on-line dating market. In 2011 Match, the top competitor to eHarmony, reported 1.8 million paying subscribers who used its “Synapse” algorithm to find possible mates. eHarmony uses its “Personality Profile” and its questionnaire as its technology strategy. In 2011, according to Ogilvy, eHarmony started to see significant downward trending, alarming decreases in both registrations and subscriptions. Out dated marketing and advertising strategies were not keeping up with the introduction of new forms of media. Targeting Targeting (and re-targeting) allows a company to use information contained in a data-base to send a specific/tailored message based upon on-line activity. This targeted marketing is the way for eHarmony to dig into its database and rehabilitate registered users who have not been converted to subscribers. The case states that “To support

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