With the switch of a button, Tinder, the hottest dating app around, skyrocketed from not grossing to top grossing with revenue of $3M in less than a quarter. Why and how? read below.
The top grossing dating market
If you monitor the top grossing charts obsessively like I do, you may have noticed that there are constantly at least five dating apps in the top 50. This makes the dating market the most lucrative vertical after games. The main reason is that dating apps are notoriously known for putting their users in hot states, prone to purchase.
The model is simple: Users can browse through other users’ profiles as much as they like. but messaging those users cost a subscription fee. It’s like showing Moses the promised land and a minute before he sets foot in it, asking him for $19.90. (He would have taken this deal).
The model behind creating a successful hot state is:
- Understand what your users want (dates)
- Show it to them (hot profiles)
- Let them build their desire (browse through profiles)
- Prevent them from getting it (charge for a message).
Tinder, a completely free service up until recently, joined the top grossing tier armed with tons of users and data. Determined to make things differently, Tinder is not charging for messages but for premium features built around hot states.
- Hot state #1: Limited swipes per day
This model has been proved to work for top grossing casual games, so why not for Tinder? Addicted users in the middle of a swiping spree are prone to pay when stopped. A classic “on a whim” purchase.
Just like Candy Crush, Tinder has an “energy/lives system”.
- Hot state #2: Undo!
This premium feature lets the users “undo” passed swipes. It relies heavily on “loss aversion”, people’s tendency to do as much as possible to avoid loss. On the user’s mind, a hasty left swipe might have sent the love of his life into Tinder’s oblivion. The pain settles in. If only there was a pain killer… Ah! Undo. for $9.99. Small price to pay for an eternity of loving relationship.
Swiped pass on the love of your life? We can take care of that.
- Hot state #3: passport
The passport feature lets users find matches in their destination of choice before actually getting there. Pretty awesome for travelers who want to set the ground before landing. Most likely that these potential matches are skewed towards one night stands rather than long time relationships. In other words, would users pay for sex while traveling? Top grossing chart says yes.
So far it seems that Tinder’s plan of making revenue on in-app purchases pays off. They claim to have 10 more premium features under their belt ready for launch.
Put your product designer’s hat on and try to predict, what will those features be? How can Tinder milk their users even more? Write it down in the comments.
The post How Tinder made $3M With Genius “Hot State” Strategy appeared first on Dori Adar - Designing Users' Behavior.