I just got back from iDate Miami and want to share a few thoughts with you:

There are some very interesting changes occurring in the Dating industry right now. It’s almost like the ground is shifting, with many people able to sense the shift, but few understanding where it is going or how to handle it. Look for yourself:

- Paid websites open Free portals;
- Free websites add Paid services;
- Payment gateway companies, which avoided working with dating sites before - now actively look for them;
- Established dating companies are more open to new marketing opportunities, JVs and partnerships which they didn’t consider before;
- Great potential and opportunities are opening for new dating projects.

In another words: while some established sites may see challenges, new sites see opportunities.

In fact, many new dating projects already successfully use the situation in their favor:
- There is a new site which recognizes psychological differences between men’ and women’s approach to dating, - and presents them with different interfaces;
- A dating site which leverages existing profiles from social sites - instead of asking you to create new profiles from scratch;
- A project which matches people by DNA samples;
- Niche projects: sites for pet lovers, for people who love tattoos, etc.

So, what allows these new projects to grow right next to the old and established sites? What keeps the bigger sites from holding the ground better?

Several reasons:

- smaller sites usually can move faster due to their light infrastructure. So, when a market situation changes they can act faster. Larger corporate projects need to go through their routines and boardroom meetings, etc. Their larger size and complex internal connections can significantly slow down the response time;

- For established projects it is harder to tweak their old business models because it means a greater risk. It takes guts to change something what worked well for you for years. The result might not be as expected. Start-ups are free from this predicament because they don’t have any old business models to cling to;

- small start-up projects are often run by enthusiasts, people who really love and believe in what they do, to the point where they are literally ready to get to work without anyone guaranteeing their pay… This alone amounts to something. Such level of dedication is not always found in larger projects.

It is exciting to see new projects emerging, and I believe we’ll see more new sites in the near future.

Andrey Malygin - Founder, DatingAdNetwork

P.S. Stay tuned for more interviews with leading Dating companies!

Vindicia provides on-demand billing and fraud management solutions. Among its customers are Online Buddies, SpeedDate, Avid Life (Ashley Madison) and other large dating sites.  Chairman and CEO of Vindicia - Gene Hoffman answers our questions in today’s exclusive interview for the readers of DatingAdNetwork blog:

Q: How can dating sites benefit from Vindicia CashBox?

A: Vindicia CashBox is an on-demand billing solution that enables dating sites, big and small, to continually acquire and retain customers.  From the acquisition perspective, CashBox supports multiple payment methods and payment processors; handles numerous business models, including subscriptions, one-time payments, and hybrids; calculates the applicable taxes (sales tax, GST, VAT) through a built-in engine; and automates the process of managing and disputing chargebacks.  On the retention side, in particular, CashBox features automatic payment-retry logic, which helps subscription clients consistently raise their successful transaction rate every month by 1-2 percent.  In addition, with CashBox, dating sites can communicate with customers in multiple languages, a win-win for global outreach.

In short, CashBox manages the entire billing process for dating sites so that they can focus on their business of helping people find that special someone.

Q: How does CashBox differ from other billing solutions?

A: CashBox delivers many distinct advantages besides automation of the order-to-cash process. Most of all, CashBox helps clients optimize their customer acquisition and retention capabilities, resulting in boosts to customer lifetime values north of 10 percent annually.  No other billing solution manages chargebacks as effectively as CashBox, which tackles the friendly-fraud challenge that all dating sites face and rightfully returns revenue due them.

Typically, Vindicia wins 60-70 percent of the chargebacks that we dispute on clients’ behalf.  CashBox also provides our clients with a great deal of flexibility and versatility with its support for multiple business models, global payment methods, languages, and currencies. With CashBox, dating sites can quickly respond to evolving business conditions without having to wait for their billing infrastructure to catch up.

Q: Many payment processors are averse to dating sites and consider them a high risk. Why are you interested in working with them?

A: We’ve found that dating sites that take appropriate risk-mitigation measures for fraud are, in fact, high-margin businesses and ideal for the services offered by CashBox. Since many sites have as a goal notto retain customers for too long (after all, their success is defined as /not /needing a dating site), a simple, transparent, robust, and logical billing and payment service is a key facet of a satisfactory customer experience.  Bottom line: We believe that we can help dating sites grow their business and stay successful through our unique approach of building online revenue.

Q: Tell us more about your fraud-screening and chargeback management capabilities.

A: CashBox’s fraud-screening capability generates a risk score for each sales transaction so that dating sites can identify obvious fraudsters before the transaction is complete.  Many variables are factored into the risk score, including the geographical location of the customer’s IP address, validation of the billing address and BIN, detection of the related proxy, and card velocity.  Unique to the fraud-screening score is a database of chargebacks that we’ve created across a broad client base on the basis of hundreds of millions of past transactions.  As soon as CashBox detects that a credit card has been associated with a prior chargeback in our system, CashBox raises the risk score of the related transaction–essentially a red flag.

Chargeback management with CashBox comes into play post-transaction.  Oftentimes, chargebacks do not result from stolen credit cards or “true fraud,” but from people who make purchases but decide not to pay for them.  We call this behavior “friendly fraud” though it certainly isn’t.  For those cases, CashBox takes the chargeback data from the payment processor and maps it to usage and other pertinent information from the client site.  CashBox then creates a documentation package and a letter tailored for the customer’s issuing bank and “re-presents” the charge.  Aside from the positive impact of reversed revenue, our experience has shown that fighting chargebacks also provides our clients with valuable insight into their marketing efforts.

Q: Which dating sites are using CashBox?

A: There are quite a few, including Online Buddies, SpeedDate, iChurch, Avid Life, and others. They are either using or in the process of implementing CashBox.

We’ve received a lot of feedback on the previous post and would like to give Robert Fathers another opportunity to speak on our blog. Below you can find his thoughts on the dating industry, as it moves and changes in the current economic climate.

The Big Dating Sites

Dating is divided into several markets. Let’s say, the Big guns, like Match, Lavalife, Meetic etc; they are totally focused on their brand and very little else, they mainly rely on mass media advertising which is expensive and, more often than not, ineffective. They are purely working on a Business to consumer basis and miraculously many of them don’t have an affiliate system, mostly rely on expensive alternatives, such as Commission Junction and other larger services for affiliates, but of course CJ takes most of the money and the end result is very little profit and high advertising costs. This year highlighted many of these companies as losing money; my own belief is they will survive by their sheer size and backers, like Microsoft behind Match, but never to be that successful in their own right; their sites are also so basic, that most dating scripts even have more to offer.

Small General Dating sites

A very hard time for them: most are joining systems like our own, as they cannot get good deals with merchant accounts and overheads are difficult to cover in a market that is already flooded. However, the light at the end of the tunnel for them is by joining our system; this will help them to clear all operating costs and expand their brand with other languages, currencies and niches. This is a real solution for sites in hard times to expand and make money in an otherwise difficult market.

One off Niches

Each site should have their own unique quality, whether it’s a concept like eHarmony or a niche like JDate.com. These are, of course, more successful, but, of course, limited to a smaller segment of the market. Many of these sites cannot cope with ethnic sites. For example, try Chinese dating in the USA, or Indian dating in the UK. If jDate could cover all languages and countries then their niche becomes larger and, of course, more profitable.

Multiple Niches

The smaller the Niche the higher the profits, any Google AdWords specialist will tell you that this is the answer to real success. Building through 100 of these is no mean task.

Some ideas to dating webmasters and site owners

• How about starting your own dating empire? Where would you begin?
• A good name, a good Domain. Create your brand and design - and you have the beginning of your supersite.
• Build your site outwards, let’s call it superdaters.com
• Clone your site for each country, using the relevant language and currency for each site, link them all together.
• Create Niches around the same brand that cross sale well, like Gay dating or Adult Dating, and you are already making your own advertising for your other sites.
• Expanding on the above, you could create your own free dating site; why not add it to your social network? It’s a great fit and suits the free concept. Use the free dating site to make advertising revenue and then cross sell your free dating sites to your paid dating sites.
• The combinations of ways you can do this are endless; we estimate that you can create up to 13 million niches in our system. The beauty of it all is that anyone can do it from professional to amateur.
• This is a long lasting strong model that can last a lifetime and, I can say this honestly, completely addictive.

Robert Fathers, CEO, Datech Limited

Q: What is Datech Ltd., and what do you do in online dating business?

A: Datech Limited is technology partner to anyone online; whether they are large brands, want a community dating site or affiliates whose only target is to make money through a system that will earn a good return in revenue. Datech offers a full range of solutions, from white labeled sites, template sites, affiliates marketing tools and – later this month – free dating sites as well. Our unique position in the marketplace is that we are the only provider worldwide that offer true white labeling and not simulated sites with just header and footer. There is also an outstanding ability to allow partners to filter data from our database of 17 million members, into any possible niche they could imagine, in over 14 languages (‘Add your own language’ is just part of the service too) and any currency at prices that suit the targeted market. It is all operated under World Dating Partners brand and covers all the headaches of running a dating site, like Merchant accounts, customer support, anti fraud scrubbing, partner support, a server system with 100% uptime and unlimited capacity for traffic. Our system is used by major dating sites like dating.com who find that our model cuts running expenses and leaves them with what they do best – marketing. Best of all of course, everything is FREE and we run as a true partnership on shared revenue with recurring payments AND re-bills, something that other sites don’t pay out on. As a partner you can also sell to other sites if you prefer Business to Business and get a generous override/commission over total revenue for every site you bring in.

Q: Your software development office is situated in Ukraine. What’s the best about it and what’s the worst?

A: We have worked in the Ukraine for over 10 years, an outstanding achievement as our own outsourcing company, where most companies fail in their first year. We believe that our key to success is our ability to understand and sympathize with a different culture, to pay fair wages and treat our team of developers and other staff like a family and part of our UK office, instead of looking on them as a resource to exploit. Our team in the Ukraine is just as much involved in the running of the company as any in our UK team, if not more. I am very proud of them all and they give all they can. This can all be achieved with very good communication and the right person in the Ukraine as a team leader. For the future we will add more and more responsibility to our Ukraine office, as the country becomes more aware of marketing techniques, we find that these skills are something to look out for in the future.

Q: Do you work with big name companies only or also with individual web entrepreneurs as well?

A: Datech has over 21,000 partners, from small to major, and running business across different industries shows the flexibility of who we work with: we work alongside over 47 TV networks worldwide, over 250 radio stations, over 120 affiliate networks, have many celebrities who work with us. Some of our bigger names are Cellcast, Bauer media, Perfspot, Sky TV; quite honestly, really too many to mark down on one page. In 2007 World Dating Partners took over and ran Relationship Exchange, the forerunner and previous leader of this industry.

Read the rest of this entry »

Q: How do you position Meet Market Adventures on the market?

A: We have positioned ourselves as a one stop shop where singles can connect online or off at local events and adventures or on exotic vacations.

Q: Do you consider traditional dating sites as your competitors?

A: The other dating services that are out there do not offer the same services that we provide. Meet Market Adventures offers a wide range of events, adventures and fun for singles in the city. We also have an online community that allows singles to create profiles, talk about events or experiences with Meet Market Adventures. Our no pressure community gives individuals the opportunity to meet other singles in a social setting that other dating services do not offer.

Q: What’s included in Free Membership and what is your business model?

A: Our Free Membership includes unlimited use of our social networking platform, access to fun events and adventures, local discounts and cheap single vacations. Our model is 3 tiered. Our revenue comes from up selling on the group discounts we get from local vendors and operators, Travel Commissions and advertising.

Q: Do you target some specific social groups or anyone can join?

A: We do not reach out to a specific social group and anyone is free and able to join Meet Market Adventures. Our target market is singles between 30 and 50. This group seems to represent the majority of our members because of trends in lifestyle, changes is personal circumstances or personal choice.

Q: What areas and cities do you already cover?

A: Our goal is to be in every major city across North America in 5 years. We are currently represented in the following cities:

• New York
• Philadelphia
• Chicago
• Toronto
• Montreal
• Ottawa
• Winnipeg
• Calgary
• Edmonton
• Vancouver

Q: How important is your own website for your business?

A: Our website is crucial. Without it we would not have been able to grow as fast as we have. Our website acts as our store front for our events, adventures and social community.

Q: I am sure you also have groups and fans in Facebook and MySpace. Do you feel the emerging impact of social networks on your business?

A: Yes, we are covered on all Social Networks. It allows us to access millions of potential clients and has become our major marketing initiative. It is a great way to virally grow your business. It is has been beneficial to see what features and applications these companies are using and how you can incorporate them into your own model.