Dating apps' recipes for success: how the top apps retain & monetize their users

December 2020

All apps tend to play with the mechanisms from our brain to foster usage and retention. We need incentives. While we see retention practices converge among app categories, dating apps remain a very specific type of apps. Let's explore this together through the examples of Tinder, Happn, Hinge, Bumble, Badoo & Fruitz.

What makes dating a unique category within mobile apps

First, dating apps are among the most innovative apps on stores when it comes to retention product features. Just like many other social apps, they play on traditional psychological means which one could simply summarize as FOMO (Fear Of Missing Out).

Notifications are the first lever used by the apps to stimulate new swipe sessions. Dating apps are among the few ones that can play on this FOMO feeling to increase usage and they of course make the most of that, sometimes flooding users with notifications for any interaction they may have missed.

Best dating apps are basically able to turn FOMO into product features. For instance, Tinder has developed a feature called Swipe Surge. When a high number of users are on the app at the same time, Tinder sends you a notification to warn you and push you to take part. They also notify users about those who are active on the app. Tinder claims that during this period, user engagement can go 15x and you have 2.5x more chance to match someone. Apart from bringing excitement to the game, they punctually relieve the user from the pain of the asynchronous matching process, as you can match and engage a discussion at the same time. The app even sends you a notification at the end of the surge to recall that you missed the load of opportunities that came along 😏

On the other hand, most dating apps also tend to limit user intrusiveness when it comes to side features, especially messaging. They waited for quite some time before setting up basic messaging features such as read confirmation or connexion dots, and a lot of them are - of course - reluctant about media sharing. As a user, you do not necessarily want your activity to be tracked down by your last match. Matching is a proof of mutual interest, but it is neither an engagement to go further nor a proof of shared confidence. That being said, it's a must to provide users with a secured messaging service, even if this means to have a very basic communication system within your app.

This is probably the reason why dating apps use a variety of ways to reassure the users. Some people are reluctant towards using dating apps because the interactions and the mechanisms can look brutal and cruel. Apps must convince their users they can have an hassle-free dating experience. They use several methods to create confidence: chart of good conduct during the onboarding, reminders about privacy along the sessions, friendly notifications...

In a nutshell, retention features can turn into a double-edged sword. Successful dating apps can be super intrusive as they play on the emotional dependence of a portion of their users. However going mass market does not come without fixing limits in your product, at least until you've found the right balance your users will agree to.

How dating apps monetize their users

Dating is considered as the most profitable mobile app segment (Tinder made $1.2 billion in 2019!). More importantly, dating apps have original monetization paths, taking inspiration from both traditional subscription apps and gaming, and with a high granularity at the app level (e.g. Tinder has 3 different types of premium, 3 plans for each and 3 types of credits). Here is our view on how best dating apps monetize their user base.

The first takeaway is that the monetization systems are complex. Dating apps usually combine different subscription plans and credit options. The main reason for that is probably that multiplying and diversifying the sources of frustration is the best way to increase the conversion. For instance, Bumble has two premium plans: the main difference between the two is that the most advanced one allows the users to see who wants to match with them (Tinder has more or less the same distinction between its first plan and the second one). This additional bonus justifies the 3x price differential between the two plans. Dating apps are good at identifying the most wanted bonuses and dedicating a much more expensive program for these ones.

Dating apps have two-sided business models and they take the best of the two worlds: the recurring revenue that makes the success of the subscription apps, and the immediacy of in-app credits. They impose several limits based on time (e.g. X number of profiles to swipe per day, one "super like" per day, waiting for the other one to like your profile too before starting messaging, etc.) and credits are a way to go beyond these constraints. Dating apps monetization partly relies on the same frustration mechanisms that fueled the development of a lot of mobile gaming apps, leading to the same "pay-to-win" dilemma: how can you maintain a base of happy free users while maximizing revenue with microtransactions? How can you give paying users superpowers while avoiding them to win everything?

Dating apps surely have to limit the benefits of premium plans. For instance, Tinder offers only 5 super likes per day to Gold users and Happn only 10 FlashNotes. By doing so, these apps add sufficient value to the premium plans without unbalancing the "game" and discouraging free users.

The third way to monetize is advertising, that you can avoid as a user by going premium. Dating apps can add very native ads right into the profile feed. As users are absorbed by their swiping session when they are shown an advertising, recall rate is surely better than any banner or interstitial. The ad can be swiped just as any other profile.

All these apps are good at designing smart monetization strategies, but how do they optimize the conversion of free users to paying? They adopt smart methods to enable users to discover premium features for free and maximise the conversion then. The best example is Bumble who gives you a free "Spotlight" - a bonus that gives the user more visibility for a certain period of time - just after the onboarding. At the end of the trial, Bumble sends you a message "Your spotlight was a success!" to make you realize the potential of the bonus (i.e. how many matches you got thanks to the bonus). Every dating app offers free credits to make users accustomed to use them: Hinge gives one free "Rose" per day, Tinder one "Super Like" per day, Fruitz 3 "fruit discoveries" per day... Just like any drug dealer trying to lock future clients.

How to differentiate as a dating app

Though the dating app space is turbulent with new comers every year, established leaders are here for a number of years now and are not boldly challenged. This brings us to the question of defensibility and differentiation: how does a dating app gain traction, develop its unique positioning and stay ahead of the competition?

  • Product innovation? When Tinder invented the swipe feature in 2012, it undoubtedly fueled its popularity. It was such popular that it was copied by all the newcoming players in the industry. Today, the experience is very homogeneous across dating apps. Interesting standpoint is that this story is very replicable each time a new feature appears in this space, as it quickly turns into an industry standard. This also happened to Fruitz's killer feature to describe the user's aspirations (purely dating, finding love, etc), which was replicated by other apps later on. In short, innovative features do not guarantee defensibility, they just help you gain traction at the beginning of the story.

  • However, most dating apps are now looking for new nice-to-have mechanics to replace or complete the swipe. They want to prevent the swipe fatigue and keep stimulating the users' desire. For instance, Happn launched CrushTime: a mini-game to guess which person is interested in you. If you guess correctly, Happn instantly match you with this person. This kind of game is also used in other apps like Tinder (which calls it "Secret Admirer"). Once again, all features that work are replicated.
  • Size? Reaching a certain size is surely a differentiation enabler as you have more budget and a larger community to engage with. In September, Tinder was able to launch Swipe Night, an interactive event inspired by the global lockdown. It consists in a series of short movies about a party turning into a mysterious disaster, where every choice you make impacts your path into the scenario. At the end of every episode (the event took place on three weekends), the user ends up with a specific path that is displayed on the profile page and that he/she can engage about with other users. Editors also enjoy strong network effects to grow their user base, just like most social apps.
  • Personnalisation? One frequent critic made to dating apps is that they do not allow your personality to stand out among hundreds of other profiles. Some editors have understood how important it is to make users feel unique valuable. Hinge pushes its users to tell more about them and complete their profile in exchange for unlocking paying features. Again, this is a very similar approach to mobile gaming (eg: connect your Facebook account and gain gems/credits). The value of personal information for the apps (sexual orientation of course, but also tastes or desires on food, sport, children or religion) explains why the apps encourage users to add personal details. This is also why onboarding are so long on dating apps (you can have a look at the full onboarding flows on App Fuel).
  • Community? One final crucial differentiation is what one could call "community curation". All successful dating apps end up dealing with fake account, inactive and go-to-Instagram profiles, or even online/offline prostitution & escorting. Maintaining a certain "profile quality" is a key to avoid bad experiences that would make users leave the app. While apps do try to crack down on offenders, users also play their part in reporting foul accounts.

In the end and after going through these apps as fake users (oh really?), we are positive that true differentiation among dating apps relies on the relationship to your user base. Products do follow a similar path: differentiation trough a killer feature and an attractive user base (i), features replication (ii) and commoditization (iii). However what makes a dating app unique is probably how it makes the user feel special, understood, and comfortable with interactions within the app to match his/her intentions, whatever they can be.

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