So, we’ve identified the problem facing the world of online dating: every time their product is successful, two of their customers are gone, maybe never in the market for it again. Because of this issue, according to one recent study by Ibisworld, the global dating industry has grown 1% in five years.
I was shocked at that figure at first – thought: that can’t be right. You read of record numbers of sign ups and the annual internet dating industry growing to $2bn – the sector has got to have grown more than that, surely. But, no.
As dating sites refine their product through research, customer polls and reaction to market trends, the product they offer gets better. It has to, purely down to the amount of competition every dating site on the internet faces.
So if you’re making your product better, how do you retain your market share whilst growing your bottom line to satisfy your share- and stakeholders, to then further research how to make it even better to rinse and repeat the whole process? Whack on a whole chunk of expenditure for advertising because you have to replace two customers for every one relationship, the conundrum gets more head-scratch-worthy.
In as far as keeping the shareholders happy, this shouldn’t be a problem. If you’re constantly improving your product, providing that the development costs are less than the capital gains, you’ll be in profit. If you have a customer who’s happy with your service, price, within reason, is not even an issue. Ask anyone in business and they’ll tell you exactly the same. However, there is not an infinite number of ways you can refine searches or add pretty, flashy decor to a site and still retain your dating site brand recognition.
There are exceptions to the rule. Take your high-end dating sites, for example. Cost, for the members there, is simply not an issue. The members pay four-figure premiums per month in return for the site doing all the ground work whilst they get on earning a stash, meaning all they have to do, once they’ve been accepted at one-to-one interview level, is turn up and start dating.
The rule these matchmaking sites are exempt from is fluctuation and guesswork of how much of the market share they can secure. High end dating sites tend to have a maximum membership level, are staffed accordingly, use reputation for the bulk of their advertising and probably turn down more people than they allow to sign up, such is the demand for this executive dating service.
Which brings us back to the ‘growth from within’ conundrum for the mainstream dating site: how do you remain successful without losing your customer base?
All will be revealed in the final piece of the jigsaw: answer