Businessmodel of eHarmony

Customer Segments

eHarmony has a mass market business model, and does not make significant distinctions between different customer segments. The company’s website does include specific sections targeted at customers based on ethnicity (Asian, Black, Hispanic), religion (Christianity, Judaism), age, and sexual orientation. However, the service options in each section are broadly the same, offering identical value propositions.

Value Proposition

eHarmony offers three primary value propositions: brand/status, performance, and customization.

The company is well-known, a result of being one of the earliest online dating websites. It is also one of the world’s most popular dating services, with over 20 million registered users and a 14% share of the overall market.

eHarmony stands out in terms of performance – research published by Proceedings of the National Academy of Sciences (PNAS) ranks the site as the most successful in terms of producing marriages. In fact, research from Harris Interactive estimates that on average, 438 couples marry daily in the U.S. as a result of being paired on the site.

Lastly, eHarmony personalizes its offerings for users by offering separate sections based on ethnicity, religion, age, and sexual orientation. This differs from most dating websites, which merely include these factors in a list of drop-down options.

Channels

eHarmony’s main channel is its website, which serves to market as well as offer its actual service; it also advertises on television.

The company offers a mobile app that consumers can use to search for matches; however, they must complete the initial questionnaire on the website first. Lastly, it offers a premium matchmaking service called eH+ in which customers participate in a phone interview with a dedicated counselor (called a “Matchmaker”) who uses the information gathered to personally hand-pick potential matches.

Customer Relationships

eHarmony’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees.

The company does not even offer a customer service phone number on its website; rather, it provides an e-mail form and a list of popular help topics that are designed to answer all questions. eHarmony does offer a dedicated personal assistance component through its aforementioned eH+ service, which assigns a counselor to work one-on-one with a customer via phone and the Internet.

Key Activities

eHarmony’s key activities focus on platform management. The company’s business model entails maintaining its website for customer use.

Key Partners

eHarmony maintains an affiliate program. Companies that join advertise the service on their own channels and earn a percentage of sales from leads obtained through their campaigns. eHarmony supplies program partners with all necessary marketing materials.

Key Resources

eHarmony’s main resource is its proprietary, patented Compatibility Matching System, a software program that utilizes 29 “Dimensions of Compatibility” to determine which customers would make the best long-term partners.

It relies heavily on its engineering employees to maintain and update the system as necessary. Another key human resource is the counselor staff it uses for its eH+ premium service.

Cost Structure

eHarmony has a cost-driven structure, aiming to minimize expenses through significant automation.  The company’s biggest fixed costs relate to its sales and marketing expenses. It advertises heavily on TV in order to compete with its wide variety of competitors, who include other paid dating sites such as Match.com and sites offering free dating services such as OKCupid.

Other major expense drivers are general and administrative costs and customer support costs, which are both fixed costs.

Revenue Streams

eHarmony has one main revenue stream, the fees it charges for the use of its services. It offers the following two main pricing tiers:

Basic: Offers full access to the site plus the Compatibility Matching System. Prices are as follows:

• 1 Month: $59.95 per month
• 3 Month: $29.95 per month, paid in one full payment of $89.85
• 6 Month: $29.90 per month, paid in three installments of $59.80 each, or $179.40 total

• 12 Month: $19.95 per month, paid in three installments of $79.80 each, or $239.40 total Total Connect:  Offers same services as Basic plan plus a more in-depth analysis of customers‘ personalities, the Secure Call option (anonymous phone calling), and the Rely ID option (verifies age and name)

• 3 Month: $44.95 per month, paid in three installments of $44.95 each, or $134.85 total
• 6 Month: $33.90 per month, paid in three installments of $67.90 each, or $203.70 total
• 12 Month: $23.95 per month, paid in three installments of $95.80 each, or $287.40 total Premium:  Offers same services as Total Connect plan plus a guarantee that if customers do not find a match within a year, they get to use the service for another year for free. Also includes assistance from a dedicated profile advisor. The price for 12 months is$503.40.