eHarmony Turns Around in 2-Year Period

eHarmony
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eHarmony was on the brink of disaster in 2012, ready to be sold to the highest bidder on the auction block, at least according to a recent article on Online Dating Insider. But the company was determined to turn things around.

According to eHarmony executives, “We took our hard won stash of capital and used $153.2M to buy out all the “Class B” shares, and we began the pursuit of our own company.  We asked five of our former and highly-esteemed board members to step aside and give us a chance to do more of what we needed to do to bring this company back.  We made tough decisions…let some people go, terminated vendor contracts. Moreover, we have cleaned up “our house” by appointing an all-new executive management team that is a more aligned team than we have ever had before.”

For those of us who did not know eHarmony was on the brink of financial ruin, this letter came as a surprise. In the time they were desperately struggling to tread water, Neil Clarke Warren, the company’s founder, came back on board as CEO and reminded the company of the reason they were successful in the first place – their focus on matching for long-term relationships.

While most dating sites and apps have gone in the opposite direction – focusing on quantity instead of quality of matches, and casual meetings instead of long-term relationship potential, eHamorny’s serious focus has paid off.

“Instead of losing 100,000 end of period subscribers each year, suffering...losses of 50% every single year, our EBITDA for 2014 will literally be dramatic and the cash in the bank increasing substantially each month. EBITDA is currently running $9.4M ahead of plan as we work with our forecasts. Our end of period paying subscriber count has hit its all-time high...”

eHarmony was not afraid to get rid of what wasn’t working. Trimming staff by over 30%, they went from about 300 employees to only 190 in all of the U.S., U.K. and Australia. They have also dropped vendors who weren’t contributing to the primary focus of the site – relationships. (That is, focusing on the long-term potential.)

eHarmony’s success rate speaks for itself. It claims to have made more than 600,000 marriages, and has only a 3.86% divorce rate (compared to the over 50% divorce rate of Americans in general).

The company plans to take its technology in other directions besides love. They are planning the launch of Elevated Careers by eHarmony, where they hope to make successful coupling between potential employees and employers by using the same psychologically-based matching system to help people find their dream jobs.

While the company didn’t offer exact figures, they did claim to have hundreds of thousands of users as well as 1.2 million matches. It looks like they have turned things around, though most of us didn’t even realize how much they were struggling.

To find out more about this dating service, you can read our eHarmony review.