Matchmaking services (1/2): Why business with love isn’t eager to innovate

Matchmaking companies (typically in the online dating industry) charge customers a regular monthly fee. That may lead to a reluctance to innovate since technological progress is often less lucrative.

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Tinder or Badoo are often perceived as services involving a frenetic swiping through of pictures of single men or women motivated by the desire for an easy hook-up.

However, according to an article on the website of the INSEAD business school, roughly 40% of users claim to be looking for a committed relationship on these platforms. Furthermore, over one third of all users found a relationship there which lasted more than six months.

Financial incentives

Why do we not hear about these successes? Perhaps because more money is made by flings than by matchmaking which results in lasting relationships.

So long as it is all about continuous new hook-ups, customers keep their monthly subscription in place; thus there is a steady inflow of fees. When, however, a user finds a longer-term relationship, they will probably delete their account.

That is also a reason why dating apps may prefer to be more of hook-up facilitators than actual long-term matchmakers.

Innovations? Be careful

Online dating platforms are no doubt well aware that innovation and greater success in pairing up users who turn out to well suited to each other will lead to these same users abandoning the platform.

The article points out that this may be an issue in several industries. One senior executive in recruiting complained that the high-quality matchmaking software used by his firm was fulfilling clients' needs too quickly and the sales team couldn’t keep pace. As a result, the company began experimenting with less effective technology.

-jk-

Article source INSEAD Knowledge - INSEAD Business School knowledge portal
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Matchmaking services (1/2): Why business with love isn’t eager to innovate

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