It starts right around the New Year, and surprisingly, it doesn't involve giving up anything. It's the prime online dating season, the peak time for e-matchmakers to attract new customers.
And eHarmony.com now is striving to attract an unusual group of new customers: married people.
As the top site for online marriage-making, eHarmony.com boasts of more than 15,000 marriages a year between its single subscribers (the company doesn't track divorces). Trouble is, happily ever after doesn't generate repeat business for the Pasadena matchmaker.
So, to extend the honeymoon with its newlyweds, the online matchmaker last year introduced a "Marriage Wellness Program." It features 12 interactive online videos that offer advice for couples trying to deal with the common challenges faced by husbands and wives.
For an online dating service to search for new customers among the married points out how the once skyrocketing online relationship business is maturing and getting harder.
According to Jupiter Research data, the number of Internet users who say they actually paid for online dating subscriptions fell from 6 percent in 2004 to 5 percent in 2005. More than one-third of users who tried an Internet dating service didn't convert to a full paid subscription.
What's more, revenue growth is slowing. The U.S. online dating industry grew about 10 percent in 2005, with revenues of $516 million coming from consumer subscriptions. That's slower than the 19 percent growth in 2004, and way down from the 77 percent spike the industry experienced in 2003.
However, eHarmony's chief executive, Greg Waldorf, pointed out that the big growth in earlier years was exaggerated by the small base of customers, and the potential future market is still great.
"If you compare it to 2002 or 2003, percentage wise it's not the same growth but our subscriber numbers were smaller then," Waldorf said. "There are 90 million singles in the U.S. and 15 million to 30 million of those will visit an online dating site. But over the course of a year only about 3 million to 4 million will subscribe that's a huge challenge. It's a big gap and that doesn't feel like a saturated market to me."
But eHarmony's competitors are rolling up their sleeves, too. Match.com launched a relationship advice service last year featuring TV self-help and relationship guru Dr. Phil McGraw.
According to Duane Dahl, chief executive of eHarmony competitor PerfectMatch.com, the $50 to $100 it now costs to sign up a member, particularly men, has become a real challenge.
Perfect Match has more than 4 million users and is the second-largest player in the relationship space, though it's nearly 10 million shy of eHarmony's numbers, and luring potential customers is the hardest part of the game.
Typical methods of attracting members are e-mail, direct mail, banner ads, and expensive media such as TV and radio.
EHarmony got an infusion of $110 million in cash from Sequoia Investment and Technology Crossover Ventures two years ago, and spent a reported $50 million in 2004 and $80 million in 2005 to create a slew of now-recognizable eHarmony TV spots.
"It's very expensive to go out and do big TV or radio buys as eHarmony did," said Dahl, whose company spent less than $15 million on advertising last year. "They got a bunch of cash and carpet-bombed the airwaves, and that's not something everyone can afford."
For eHarmony, the challenges don't stop there. For one thing, there's been management turnover lately.
Waldorf, one of the founding investors in the company, stepped in as permanent CEO in November. He had taken the position in an interim capacity earlier in the year when former Chief Executive Jaynie Studenmund resigned just weeks after assuming the role in February.
Co-founder Greg Forgatch had stepped down as chief executive in January to "pursue other interests," but he maintained his position on the board. Forgatch's father-in-law, author Dr. Neil Clark Warren, is the other co-founder and highly recognizable from his role as the face of eHarmony in TV ads.
"The candidates coming forward were some good people, but at that point I had already been doing it for six months, so it was an easy decision for me to stay," Waldorf said. "It is a difficult job. This is a much larger company than most private companies; we are the largest venture-backed private company in California."
In addition, eHarmony intentionally cuts out some potential clients.
It doesn't do same-sex matches, which knocks out about 15 percent of the online dating market. And as a "relationship" broker, it does not seek customers who are looking for a fast hook up. At least 16 percent of those who fill out the site's initial 436-question survey are rejected because they are considered poor marriage prospects. That includes individuals who are under 21 years of age, twice divorced, people with depression, those seen as impossible to please and those who the system believes are lying. Also, the site doesn't initially allow users to see photos of one another.
"We like to match people who have a high probability of being in the top 25 percent of successful and long lasting marriages, and not everybody matches that," said Waldorf. "We are giving up money by turning people down."
Hence, the move to bolster business by reaching out to married folks.
Before starting the sessions, the man and wife complete 310-question quizzes designed to assess a relationship's strengths and weaknesses, and 20-minute homework assignments follow the video counseling.
The price ranges from $75 to $240 per couple, depending on how many services a subscriber purchases.
Why would customers use such an online service instead of traditional face-to-face counseling sessions with a licensed professional?
Cost could be one factor, especially for couples without health insurance, and the online service can be done in the privacy of home.
Of course, licensed therapists aren't necessarily supportive of the service.
"That approach is consistent with our culture, which says you can get things done quickly and easily, even relationship issues," said Jerry Rabow, a social psychologist and therapist licensed at Los Angeles' Center for the Promotion of Intimacy and a professor at UCLA. "We're much more complicated than that and it takes a lot to change; if that's all it took, the world would be so much better."
For its part, eHarmony does not quite tout the service as counseling, but as kind of a marriage wellness program that is a way to get "advice, knowledge and tools" to strengthen a relationship. It calls its service an alternative to therapy, and advises its customers to get therapy if they need it.
The company is not saying how many customers it expects to sign up for "marriage wellness" or how big a business it expects the marriage program will become.
But it did say that "tens of thousands" of users have tried the service.
"The marriage service is a way to reach out to subscribers in a broader way then we were before," Waldorf said. "Marriage is very much within what people associate with what we do. We continue to explore other ways to serve the market."
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