In a recent conversation with a chief technology officer, he asserted all digital technology changes in his organisation were being led by IT and not by marketing. It made me wonder: How long a marketing function like this could survive?
EHarmony has seen customer subscriptions and engagement rates leap by double digits after embarking on the biggest bespoke audience segmentation project in its eight-year history in Australia.
The online dating site’s senior marketing manager, Lynsey Tomkinson, told CMO her team had been tasked with making marketing programs work harder by looking for ways to better understand and interact with prospects and customers.
The push for marketing innovation is the result of a shifting and growing competitive landscape over recent years, largely thanks to the arrival of mobile-based apps such as Tinder. In addition, eHarmony is looking not just to acquire customers, but better understand their lifetime value to the business, she said.
Prospects go through a three-step process of converting to customers with eHarmony: An initial registration, completing a personality-based questionnaire, which helps match them with other site users, and then signing up to a subscription model.
“We needed to dial up firstly what eHarmony is, and what we do in comparison to all these sites, because customers were faced with so many options, and we needed to share why we are the best choice for them,” Tomkinson said.
As a starting point, eHarmony launched a big research project to understand its customers and brand perceptions.
“We found that our messaging was very much focused on the testimonial approach but the market is in a different position now,” Tomkinson said. “People are now more accepting of online dating, and people are online, so it was more about persuading them to switch to eHarmony.
“We also wanted to dial down the marriage aspect of our brand a little bit, and while still showcasing that we are a relationship site you can come to for genuine relationships, we’re about matching you with people you are more compatible with so you’ll still get great dates from it.”
Based on these market insights, eHarmony launched a new four-part TVC campaign in February to counteract the ‘too serious’ tag, focusing on the perils of bad dates as a result of being poorly matched. The campaign identified four dating stereotypes and explored each one, increasing TV response rates by 51 per cent compared to 12 weeks prior to the new campaign. It also saw cost per registration decrease by 18 per cent.
Since then, a further series of TVCs have been launched.
But it’s the work around audience profiling that’s opening up new data-driven, targeted marketing opportunities across all media channels.
Delving into audience data
EHarmony launched an audience segmentation project late in 2014 to delve deeper into how to better target individuals, bringing OMD’s brand science data team in to start exploring customer data.
“Rather than sending that same marketing message out, it was about being clever and understanding firstly who the best prospects and customers for us to convert are, and secondly, at a deeper level, not just look at demographics but also things like geography, psychographics and media consumption,” Tomkinson said. “From there, that helped us work out which relevant marketing channels to use in order to target those people more successfully.”
To do this, eHarmony drew on data from its 2.6 million Australian members and analysed more than 70 million data points using principal component and hierarchical cluster analysis techniques, covering demographic, geographic and psychographic data. Work was undertaken by OMD in partnership with eHarmony’s US-based data and IT team.
As a result of this activity, 10 unique audiences were developed and prioritised based on profitability, volume and opportunity. Tomkinson said her team put the emphasis on the top three, most commercially viable segments.
“We looked at population size in that segment and how many people to target,” she explained. “Australia has pockets of people in different areas. One segment for example, is around 25-40 year olds, metro region, and is skewed female. The next segment was male skewed and about people who were more likely to already be on online dating sites and could be targeted to switch to eHarmony. The message we created for that group was different.”
A third segment of 40+ divorcees with another distinct set of criteria also needed to be addressed with different content, Tomkinson said.
Thanks to the audience segmentation exercise, eHarmony saw a 28 per cent increase in subscription volumes over the May-July period, and improved the cost of its registration-to-subscription rate by 53 per cent. Overall, the company also saw click throughs lift across the board by 93 per cent.
Key to the program of work was a test-and-learn approach to see what digital activities worked best. Tomkinson said she reserved a small portion of her media budget within each channel to testing particular segments.
Off the back of the data insights, audience insights have since been applied to a range of marketing activities, including influencer engagement, retargeting, content marketing and ABL marketing programs.
Core metrics used by eHarmony’s marketing team to gauge success include subscription rates and in particular, the cost of acquiring subscriptions, which had been increasing significantly thanks to changing market conditions.
The next step for Tomkinson is to progress activities around other medium-priority segments. One example she shared is a direct mail program launched in August.
“We realised a percentage of one of our segments lives in rural areas and are not heavy online users. So given the data results, it’s worth a test,” she said. “That’s harder to track but we have a promotional offer and will see how it goes. It’s a fairly small investment overall.”
Tomkinson is also looking into advertising in lifts and cinemas across certain geographies, having identified another segment of its customers are regular cinema goers. Radio is another channel that may become a bigger priority.
“We know we need to look into different areas to capture customers,” Tomkinson added.
The next step: Data analytics capability in-house
According to Tomkinson, another benefit of the program of work is that it has brought her closer to the global IT team. The Australian audience segmentation project is the first for eHarmony globally, and is now being used as a case study for why a larger technology overhaul is needed to make data access more sophisticated internally.
“This provides the business the case to get these systems running internally for us,” she said.
Tomkinson was hopeful of being able to produce more data-driven initiatives internally by this time next year and said a project had been launched around building new technology capabilities in-house. The challenge is not that eHarmony is lacking the data sets to dig into, it’s that it’s in different formats and requires manual work to tap into, she said.
“We need to have the infrastructure in place so we can have all this data automated,” she said.
“We couldn’t do this quickly internally, and we had to be responsive with the market, so to react quickly, we needed to work with OMD. This work has set up a good foundation for us that hopefully will work well internally in the future.”