The dating site problem – cause, effect and solution: answer

The problem, as we’ve discussed in the first two articles, is how do dating sites retain market share when their success stories – those members who’ve found their product works – leave as soon as it does?

Well, let’s look at three of the biggest dating sites out there: Zoosk, Match.com and eHarmony. First, take a look at last year’s returns, then what their plans for 2012 are and how they affect you, the dating site member.

They all work in a similar way – you can browse for free, but then you have to commit to £20/month (ish) to get in touch with anyone who takes your fancy. Longevity of contracts differ, but that aspect of their business is very much of a muchness. It’s how each site views its members and what they’ve got in store which will shake up the 2012 dating market (or not, in some instances).

It’s fair to say that, whereas Zoosk has a massive pool of membership feeding off facebook’s getting on for a billion membership, the other two have had to build, or acquire, their memberships, granted. But it’s also fair to say that once Match.com and eHarmony get you paired off, you, the couple, are nothing more than a marketing tool for the companies’ success rates. This is where Zoosk hope to change the level of the playing field.

Match.com, by their own admission, target their efforts into delivering the best experience for the user whilst they’re single so that, should they meet up with someone and disappear for a while, as soon as they’re single again, they’ll be straight back online dating with them. Apparently, this is true of 50% of its membership.

eHarmony, similarly, is looking to enhance its existing dating site membership’s experience.  Early in Spring they plan to release a facebook app that will merge the two timelines. Nice feature, but you’re not going to entice members to continue paying their fees when they’re in a relationship and they can get facebook free, without eHarmony’s influence.

This is where Shayan Zadeh and Alex Mehr of Zoosk want to make a difference. Instead of focusing on their entrepreneurial efforts the site as it is – they have 100 developers doing that for them at any given time – but they want to introduce features that will be useful to couples after they’ve got together. In essence, it’s akin to LinkedIn, the job and professional networking social site. You may not actively be looking for work, but you never take your profile down and you do nip in from time to time on the off-chance (that you will work out how to use it properly, this time).

You can see why, out of the three, Zoosk is the fastest growing and although they’ve still a way to go before they catch up with the other two giants in the online dating world, with facebook at their back, new innovations and an unparalleled vision of the market, you can bet everyone else is looking back over their shoulders.

Some of the ideas tossed in the couple-retention pot so far are anniversary gifts, discountable products, such as dining for two, scrapbooks for their uploaded dating site photographs and, perhaps most beneficial of all, relationship advice. This could be key for people who’re getting together after a long time being single or having been widowed. And, providing the couple do not stop their membership fee, all these extras will be offered at no further cost.

Now, that’s what I call growing a business from within. Cost effective customer retention so that if the couple stay together, they’re on the dating site, if they break up, they’re there, too. Guys, pure genius. Told you 2012 will be different. You bet.

The dating site problem – cause, effect and solution: effect

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

paying for your dating site

Although we have recommended paying for your dating site membership, there is one thing you really must look out for in the small print before you hit the ‘submit’ button with your credit or debit card information. A lot – and we’re talking most of the dating sites, other than those who sit right at the top of the online dating tree – put a ‘roll-over’ clause in their contract.

It is a little bit sneaky and perhaps even immoral but they do write it in the small print so they are covered legally for doing it, but a lot of dating sites state that they will continue to collect your subscription, whichever period you sign up for, without your prior consent. There will be a one-liner that states ‘by pressing submit you agree that you’ve read and digested all of the t’s & c’s’.

In said terms and conditions it will state that you give the dating site the right to take the money from your account ‘in perpetuity’ . Basically, forever. That sounds daunting but, apart from cancelling the bank account from whence your dating site membership fee comes there are two other ways you can get around this sneaky little way of screwing you for a few quid every month, one more advisable than the other.

The best way for you is, once you submit your details, there is a cooling off period. Don’t wait for that period to come to an end, do this straight away. In your account profile there will be a payment settings. Go straight in and cancel the contract. You will still get the time you paid for on your dating site, but not the headache of having to approach your credit card company when you want to leave to make the dating site stop taking your oney by the credit company imposing a charge greater than the sum of your membership fee, after you’ve told the dating site in question in writing that you wish to cancel your account, which is the second rather messy way of doing things.

This may not apply on the high-end dating sites whose membership, paying in excess of $1,000/month, and normally paying for a year’s subscription in one go, are usually afforded the decency of not being subjected to this sneaky little clause.

With so much competition, you’d hope that the odd one or two would break the mould in an attempt for the other dating sites to follow suit, but this rarely happens.

That’s about it on choosing your dating site; tomorrow, we’ll start taking a look at your profile and what we can do to entice your potential dating partners.