Posted: September 13th, 2017

This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015.

This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015.

For the exclusive use of K. MATTICE, 2015.
eHarmony

709-424

Research & Development
Since its inception the company had made significant investments in R&D, culminating in the
opening of eHarmony Labs in 2007. Staffed with five research scientists, the Labs were tasked with
studying the biological, sociological, and neurological underpinnings of love. The Labs boasted over
2,000 square feet of clinical space, including several rooms set up with chairs and couches. In this
setting, couples were observed as they interacted to examine relationship dynamics.
eHarmony was also pursuing research on physical attraction. Buckwalter noted that “physical
attraction plays a large role in the initial meeting but is a very poor predictor of long-term success.
After the initial meeting, people find themselves attracted to others with whom they share common
values. But if we can give people matches with whom they’re also going to feel this ‘click’ factor,
they’re more likely get to the point of actually developing a relationship.”
Finally, the company has invested substantial resources into a five year study of 400 couples.
Couples were enrolled during their engagement and followed through their marriage and
subsequent life stage transitions, such as pregnancy and childbirth. Early results already suggested
that “the biggest adjustment of every marriage is the birth of the first child.” Now, the study sought
to identify what characteristics and behaviors in couples predicted successful transitions. The
company believed that its team of research psychologists was uniquely positioned to identify specific
insights and turn them into products and services that could become new businesses for eHarmony.

Competitors
Competitor Types
Paid Do-It-Yourself sites were the most common type of online personals site. Some of
eHarmony’s direct competitors, such as Yahoo! Personals and Match, were in this category. In
contrast to eHarmony, these sites put up very few barriers to joining. Individuals were required to
provide basic information about themselves, such as their age, location, gender identification, and
sexual orientation. Optionally, they could provide a short blurb about themselves and provide a set
of pictures. For most heterosexual sites, men were more likely to sign up than women. As soon as the
short registration process was complete, individuals could specify the criteria for their partner search.
The website instantaneously provided them with a set of profiles and pictures of individuals who
matched their search criteria. Members could then browse profiles to identify their own choices for a
match. Some sites allowed unlimited browsing, and all required a subscription to communicate with
other members. On average, 5% of those who signed up became paying subscribers, with men more
likely than women to sign up. Paying members had little loyalty and, on average, belonged to at least
three other personals sites, either as visitors or paying members.35 Sites tried to develop some
differentiation by offering compatibility tests, or by conducting background screenings to weed out
sex offenders, felons, and married people, but most of these features were ineffective or easy to
replicate. Perhaps the only meaningful distinction was the advertising spend.36 One firm, True, spent
$90 million on advertising in a single year—an amount that exceeded its revenues numerous times,
without much long-term impact.
The process of looking for a match was fairly time consuming. By some estimates, online daters
spent nearly seven times as long searching for potential partners as interacting with them.
Heterosexual sites reported fairly skewed patterns of interactions, with a select group of women
being inundated by messages from men. Patterns of interactions between the two genders could be
easily predicted by basic characteristics. A study of speed-dating found, for example, that “men
avoided women whom they perceived to be smarter than themselves. When women were the ones