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Online Dating Magazine > Columns > Inside the Online Dating Industry > 013

Inside The Online Dating Industry
by Joe Tracy, publisher of Online Dating Magazine

Another Look: Starting an Online Dating Service

A year ago I wrote an article focused on those thinking about starting an online dating service. It was a reality check article. Now, a year later, it's time to revisit the subject and give you a heads up on a service that is doing everything right in its quest to be one of the 1% success stories. That's right... 1%.

Out of every 100 online dating services that are started, 99 of them will fail and never make a profit. Everyone starting a new service thinks they'll automatically be a part of that 1%, but then again, many Americans also think they'll one day win the lottery. The harsh reality is that from the time you launch your service you are part of that 99% and only those who know how to prevail will change that fate.

Every week I receive several emails from people telling me they are starting a new service. DateLists.com, an online dating directory, receives three new registrations a day from new online dating services. They have to delete about as many entries a day from the archives from failed services. Overall, there are close to 1,000 new online dating services opening every year. It's an oversaturated market that everyone thinks is easy to break into.

It's not.

There's a lot of online dating software out there to help people "break into the industry". There's a lot of templates for sale on eBay. It seems like an "easy" and "profitable" industry to be a part of. The main problem, however, is that online daters want to be a part of something that's already established. Even if you offer a "free lifetime membership" to the first 20,000 members, it will take awhile to reach that plateau. Why? Because when a person sees that there are only three members on the dating service (you, your mom, and your best friend), they turn and run. What good is a free membership to them when there are only three members and they all live in Jasper, Wyoming?

I'm pleased, however, to tell you that there are some online dating services that do make it past the growing pains and into success. These 1% of gems are rare and being able to study one doing things right is a great opportunity.

I've mentioned to you before a new service called Let's Grab a Drink. I first learned about this service when they contacted me about advertising in Online Dating Magazine. Now, I must admit that the second I learned it was a new online dating service, I was immediately skeptical. A new service can advertise all they want, but if they can't convert clicks into members (the major failing of most new services), then they will fail.

So here I was conversing with the president of Let's Grab a Drink, before its launch, when he said two things that really struck me:

1) Let's Grab a Drink would have a refund policy (try finding that on any major online dating service).

2) Let's Grab a Drink was going to start small (Houston, Minneapolis, and Chicago) before adding more cities.

For the first time in awhile, I thought "these guys might actually make it". For one, they were starting small, focusing their advertising in just a few cities in order to build the databases of people in those cities. Second, if a person cancelled, their membership, they would be refunded for any days not used!

Now, several months later, Let's Grab a Drink is starting to make a name for itself and here's how:

1) They network with other local companies (radio, newspaper, hotels, restaurants, etc.) to offer local singles events. At these events, they sign up members.

2) They offer prizes to members, with the current one being a 7 day trip to Clearwater Beach, Florida. Having a profile on the service automatically enters you into the contest.

3) They do radio campaigns (one of the current ones is called "Date and Win") in which they give out prizes to site members (certificates, concerts, dinners, etc.)

4) They do local TV and radio advertisements. Remember, since they are in only three cities (which is soon to change), they can do more to build local membership bases before expanding and applying the same techniques to new cities.

5) They offer a refund policy and there's no red tape you have to go through. It's a one-click cancellation process and you are refunded for any remaining time on your membership.

Folks, Let's Grab a Drink is becoming a case study for how to do things the right way. The company even plans on donating a portion of its earnings to various charities (something Romantic Planet also does) once the company becomes more profitable.

I cannot say enough good things about this new online dating service. They are putting the consumer first (easy cancellation, prizes, refunds, etc.) and removing the headaches from the billing/customer service side of the online dating process.

When you put consumers first, they will put you first. And you know what? It's working. Next week, Let's Grab a Drink will be expanding to California, New York, Colorado, and Florida.

If you are serious about starting an online dating service, this column is the most important one you'll ever read. It shows that your mindset is a key part of whether your service will succeed. Stop making it about "what can I do to get more money from the consumer" and make it about "what can I do to improve the consumer experience?"

Remember:

1) Put the consumer first. I'm sure you've been upset at the way a company has treated you in the past. Strive to make it so that no one is ever that upset with you. Remember the golden rule, "do unto others as you would have them do unto you."

2) Find ways to heavily differentiate yourself (in a good way) from mainstream online dating services (i.e. offer refunds).

3) Network with other businesses to create joint ventures that benefit everyone involved.

4) Offer incentives for people who become members (paying or not). Note: My free ebook "Maximizing Your Online Dating Success" can be used as an incentive. I offer a co-branded version to online dating services that are already open and don't contain adult-content. Email me with the URL of your service and a request for the eBook and I'll co-brand it and give it to you free to offer your users when they sign up.

5) Don't start too big. One reason Let's Grab a Drink is succeeding is because they only focused on three cities to start. It allows you to focus your marketing dollars.

6) Remember that you need to market from several different angles and markets. Just doing online advertising won't cut it.

7) Find ways to create press releases that will attract attention. All it takes is for one news organization to write a story on you and that one story could result in many more. I was once quoted by the New York Post and that article led to several TV appearances and radio interviews on the same subject. If you have the money, hire a good public relations firm to help.

8) Be serious. Running a successful online dating service isn't something you do "just on the side". There's a lot of issues to work out, especially if you become successful - servers, technicians, customer support reps, etc.

Starting an online dating service isn't something you do after purchasing a template on eBay. It's something you do after you've created a business plan, marketing plan, networking plan, and have established a winning team with new ideas that keep the focus on customer satisfaction. Do a great job and I may be writing about you here.

...


Cheers and Jeers
Welcome to Cheers and Jeers where every month I highlight something a person, company, or service is doing in the dating world and give it a thumbs up or a thumbs down. This week...

Jeers: LavaLife
A few months ago, LavaLife (a service I generally like) started phasing out its Credits program (you buy credits then use those credits to communicate with others) in favor of monthly subscriptions. Operating on credits (where you use X amount of credits per communication) was one of the things that made LavaLife unique. Now they are becoming like any other service and the result is showing.

Before LavaLife went to a monthly subscription plan, I would never receive SPAM messages. Now that paying members can communicate with whoever they want, I have seen SPAM messages from fake LavaLife members skyrocket. LavaLife has created a problem where there wasn't one before and in the process removed their Unique Selling Proposition.

Note: If you know something an online dating service is doing right, please let me know. We are going to be highlighting more of the positives of specific services, providing them with free publicity as a result of their desire to be more consumer friendly.



Joe Tracy is publisher of Online Dating Magazine and is often quoted by the media in relation to online dating topics. His Inside the Online Dating Industry column is published once a month.


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