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How free dating services can make more money

8/2/2016

 
If you’re one of millions of people who has ever used a “free” online dating site like OkCupid, Tinder, or PlentyofFish, I’ve got a question for you: Would you voluntarily ‘pay it forward’ on a free online dating service?

Online dating is one of the most fascinating trends of the last 25 years.  According to Christian Rudder’s Dataclysm, which I came across while reading Aziz Ansari’s Modern Romance, an average day on OkCupid will generate 200 matches that eventually lead to marriages.  As new dating services have come online, so have new business models.

“Pay to Play”
This is most common in online services founded in the 1990s, like Match.com and JDate.  In general, you have to pay to meet anyone.  While the pitch goes that you can “save” by buying multiple months in advance, what eligible single feels good about committing to using a dating service for the next 9 months?!?
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“Pay for Premium”
A more modern generation of online dating services provides free access not just to searching for other users and filling out your own profile, but also to basic features that let you actually meet people, like sending and receiving messages.  OkCupid and Tinder are popular examples in this category, and the “Pay for Premium” model may have more potential for growing a larger-scale userbase.  Without a payment barrier, more users may sign up, which can create a bigger network of available singles, and encourage more users to sign up, which can create a bigger network of available singles, and force me to repeat myself:
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So, how can “free” dating services make money, if they’re letting people meet but not making them pay?  A few alternative revenue sources include asking users to pay for “premium” features, monetizing user data, or showing ads.  However, each of these avenues brings challenges.  For example, when Tinder asks users to pay to keep on swiping, it risks breaking its virtuous cycle.  In this context, I’m surprised we don’t see more ads on free online dating services.  While premium features can produce user-generated revenue, they may lower potential for ad revenue and data revenue, if enough users defect to “more free” alternatives.

“Pay for Pleasure”
So what are people looking for when they use a “dating” service, anyway?  The definition of “success” obviously varies from person to person, but what stays constant is the use of some Internet service to meet new people for dates, friendships, relationships, or maybe even marriage.  In a world of online dating services, my hypothesis is that users would be willing to pay money and receive nothing in return, as long as the service asks satisfied users at opportune times.  Some example circumstances might include when matches are made, when messages are read, and perhaps most poignantly, when users deactivate their accounts.

​Many users who deactivate their accounts are quite happy.  The service worked exactly how users hoped that it would, and that's why they're leaving.  How backwards is that?!?  When I deactivate an online service, it’s often because I’m unhappy with the service.  However, when I deactivated my OkCupid account, I had never been happier with OkCupid.  I even took a screenshot of my deactivation process and sent it to the lovely lady who had just become my girlfriend:
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Actual screenshot I texted to my girlfriend
What if, as part the deactivation flow of a free online dating service, users who self-identify as being satisfied are given the option to contribute?  This type of payment would be voluntary, and could involve different options.  For example, there could be a choice between a subscription (lasting as long as the new relationship does?), or a one-time payment of the user’s choosing:
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What a hypothetical 'Pay it Forward' request might look like
Could this work?
At this exploratory stage, my monetization idea is just that: an idea.  To understand how actual users might react, please respond to the poll below!  Also, it’d be great if you could share this post with anyone you know who has used a free online dating service.  Beyond that, share your comments and “Disqus” (shameless plug: we’re hiring)!  Do you think this might work?  Why or why not?

Special thanks to Jamie, Nik, Dana, Dave, Danny, Eric, and Brian for reading and revising a draft of this post.

    Adam Stober

    ​Building products, exploring the Internet, and blogging here along the way.

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