Monetization
By: Kelly On Dating
Tags: Dating, Product Management, Startup

Let’s admit this up front: Monetization sucks. The marginal cost of production for software based services is usually zero, and the vast bulk of money comes from users who either carelessly/unthinkingly allow themselves to be overcharged or have an impulse control problem and spend far more than the amount of utility they’re getting.

Once we’re done crying it out and having a group hug we can now go about the necessary evil business of figuring out how to extract money from our users. What we should strive to do is avoid the above mentioned problems as much as possible: Only extract money from people we’re providing real value to, remind them regularly that we’re taking their money, and provide increasing value to users even when they’ve already spent a ridiculous amount. If we design things properly we do that by offering value up front and only asking for money if it’s taken, helping users get the most out of the services they’re paying for, and having upsell services which truly reach into the stratosphere. On community apps there’s another wrinkle: Noone should ever be able to pay for violations of the basic tenets of how the community works. Nobody gets to see who looked at their profile, nobody gets to match with a user who hasn’t said yes to them, and nobody gets to send unsolicited dick pics without getting in trouble, even if they’re willing to pay unlimited amounts for those services. (Except on LinkedIn, which lets users pay for at least one of those services.)

In the interests of providing value up front, users should be initially given no indication whatsoever that your app even has monetization. Only after they’ve performed some action enough to show they have real engagement with it should they be given a message that they’ve hit a limit and need to pay if they want more, and even then it should be time limited, and the user should get to do the action more if they wait long enough. When you do get to the point of asking the user for money let them have every single basic service that you offer, to make them feel they’re getting as much value as possible. To maximize monetization try to get them to buy an ongoing subscription, or at least pre-pay for as much time as possible for a discount. For that users should get a whopping huge amount of service, but whales should be able to pay a la carte for additional services if they manage to blow through the limits of those, and be given some truly expensive services for some meaningfully extra value.

For dating apps the basic extra functionality is well understood: Users can pay for extra promotion, the ability to change their mind immediately about a decision they just made, and indicating extra special interest in a potential match. There are others which have been used, but they either do or should violate basic community norms and you shouldn’t offer them. You should also remind users in their regular notifications of services which they’re paying for but underutilizing. Upsells are badly underexplored. Lots of people would be willing to pay for real time help from a selfie coach, especially if that person was able to remotely control crop, zoom, and the shutter of their phone camera. Maybe somebody should build that as a standalone service and then partner with dating apps.