Tinder generated over $1.6 billion in revenue in 2021, 17% up from the year before. What's mind-blowing, is that it is only the 5th most lucrative dating app out there…

Despite being a measly number 5 (kidding), with 75 million monthly active users and 9.6 million subscribers (as of 2021) there's a huge amount to learn from Tinder when it comes to monetization, UX, pricing and user segmentation.

I'll cover each one-by-one below, and uncover how Tinder manages to monetise so darn well.

A quick side note: I'd highly recommend listening to Lenny's Podcast episode with ex-CPO at Tinder, Ravi Mehta. The episode is amazing and it's what drove me to jump back into Tinder (despite being happily taken) in the name of UX research.

1) Tinder's early UX flow: activation over monetization

Similar to Bumble, Tinder allows users to experience core functionality before pushing them to pay. I'm able to journey through onboarding and swipe on some profiles before any paywalls.

Screenshots showing UX flow of Tinder’s onboarding, and the lack of monetisation in the early flow
Tinder's early activation UX from registration through to onboarding, tutorial and the first profile. No demands for my money just yet.

The reason for this is that you don't want to stop users from reaching the magic moment. Pushing monetisation too hard for a product with a good freemium experience risks churning users too early.

This is especially important for dating product where a large proportion of freemium users are people who will have success no matter what: i.e. young, single, attractive women.

According to Andrew Chen, due to the nature of Tinder's network effects the 'hard' side of the network (young, attractive women) is in high demand by the 'soft' side of the network (men) and therefore women find it easier to match.

These women are less likely to pay as they're able to get what they want for free. In the UX flow, it's therefore crucial that these users can get in, create a profile and start swiping. Blocking them from doing so would be disastrous: no attractive singles on there, no dates, no payers, no revenue... Uh oh.

None

As a result of this focus on activation before monetisation, I was happy for a grand total of 5 minutes during my onboarding, before monetisation hit...

2) Don't leave any money on the table: segment your user base

In Lenny's Podcast ex-CPO at Tinder, Ravi Mehta, explained that Tinder's monetisation strategy has two key components:

  1. Subscription
  2. One-off payments

Within the subscription, there are three tiers (and counting). This is a similar model used by other dating apps like Bumble. The reason this model increases revenue is that it is personalised to different user's willingness to pay.

Tinder has three subscription products: Tinder Plus, Tinder Gold and Tinder Platinum.

Screenshot showing Tinder’s 3 subscription tiers and their price
Platinum is almost double the price of Plus, golly gosh. Screenshot source: https://tinder.com/en-GB/feature/subscription-tiers
Screenshot from Tinder’s website showing features included in each subscription tier
The additional features get more and more niche the more expensive you go….. Screenshot source: https://tinder.com/en-GB/feature/subscription-tiers

What's interesting is when I learn about each of these in the user experience.

I had no idea there was such a thing as Tinder Platinum for weeks. I can't even see Platinum on the list of in-app purchases on Tinder's app store listing.

Whereas, Gold and Plus are promoted to new users in their first session.

I saw Gold first, as I tapped on the see waves tab. Seeing waves is the main value proposition of the subscription, and the reason why the majority of subscribers pay. Hence why it makes sense to drive to their medium-expensive tier instead of the cheaper tier — to avoid missing out on $$$.

Screenshot showing Tinder’s see waves screen and their GOLD subscription screen
Tapping on 'see who likes you' on the See Waves screen takes you to a Gold popup.

I then saw Plus, Gold and a one-off payment from the profile cards themselves:

Screenshot showing Tinder’s cards and where each button leads to a monetisation screen for Tinder Plus, Tinder Gold and Rewinds

Try as hard as I might, I just couldn't find Platinum. I tried for a grand total of 10 minutes before asking a friend or two with a lot more experience on Tinder than me (thanks goes to Izzy & Alex).

Tinder Platinum is nestled in the Likes Sent tab. Why? My guess would be that this is a tab where power users go. Power users who aren't getting responses to their likes, and go searching around in the app.

Screenshot of Tinder Platinum screens from Likes Sent tab, and push notification on android
Nice to see a bit of Android once in a while.

What is very snazzy, is that once you see the payment screen, you're put onto a CRM flow. My unfortunate friend now receives Platinum-related pushes:

  • The first push 5–10 minutes after exiting the app and not purchasing Platinum
  • 4 hours later in the evening, another Platinum push

I'm a huge fan on personalised push — don't just send everything to everyone (else you kill that channel). Apparently, advanced targeting improves push engagement by as much as 300% and personalisation by up to a huge 400%.

With both push notifications and payment tiers, Tinder hides complexity for new users. The key idea is to avoid bombarding users early on and causing churn. There's an amazing case study on this by Growth.Design that explains progressive disclosure in more detail, if you've not seen it already.

Now that we have visibility over all their tiers and where they're promoted in the UX flow, let's draw it some UX flows. Here's a basic monetisation flow with some user cohorts draw on from most willing to pay (top) to least willing to pay (bottom):

Flow chart showing install -> subscribe -> renewal flow

With only one tier, you're catering to one of many cohorts. By adding more tiers, you're catering to multiple willingness to pay price points:

Flow chart showing install -> subscribe -> renewal flow, with the three Tinder subscription tiers

Tinder Platinum caters to people who want to get a date ASAP and will pay to do so (crucially, they want their likes prioritised). Tinder+ caters to the more price sensitive users who don't want to pay for GOLD.

If I'm honest, I didn't see the difference between Gold and Plus when I first saw the screens — the UI was a similar gross yellow colour. I can't help wondering whether people accidentally pay for Plus, realise they cant see waves, and then upgrade to the more expensive tier.

The same monetisation flow chart as above, showing the Tinder monetisation tiers in a flow diagram plus the ability to move from Plus to Gold

It doesn't stop there with segmentation, next we look at how Tinder drives even more revenue from power payers with one-off payments.

3) Drilling down into super users

Segmentation is not the only thing that drives Tinder's huge revenue numbers. According to Ravi Mehta, Ex-CPO at Tinder, one-off payments were a huge shift in Tinder's monetisation strategy, driving a disproportional amount of revenue from a small percentage of users (<10%).

Through focus groups and data analysis, the product team at Tinder found that some users where buying a huge amount of boosts and super likes. When the team drilled into this insight, they found that this small cohort of users had a surprising difference in average revenue per user per month (ARPU):

Named the 'Whale' users, this cohort displayed 10X ARPU compared to average (a monthly payment of $300 vs. $30).

When Ravi's team dug into the why, they found that these people were often mobile, they moved around a lot (think sales people and people in the army). Therefore, they were happy to throw money at Tinder to get them a date ASAP when they were located in a new area.

The same monetisation flow chart as above, showing the Tinder monetisation tiers in a flow diagram plus one off payments

Adding that into the UX flow, you can see that Tinder's monetisation strategy leans into segmentation even further by offering one-off payments that help power users get to the magic moment over and over again.

It's useful to think of monetisation as being broken into a few key levers:

Formula showing that revenue is a function of total userbase, conversion to payer and average revenue per user

Tinder drives revenue by moving not just average revenue per user (having higher pricing tiers and one off payments), but also conversion to payer (lower payment tiers).

Takeaways

To sum the lessons learned from the 5th most lucrative dating app:

  1. Don't bombard users with monetisation too early. Especially if you're a network, and the people attracting others are unlikely to pay — you risk killing your network (i.e. a negative network effect).
  2. Don't assume if users don't pay they never will. Similary, don't assume users paying won't pay more. By offering more tiers, you're catering to more price sensitive cohorts, as well as power payers. And don't forget about using CRM to help.
  3. Go even further with segmentation, what would the power payers pay more for? What can you offer the non-payers that may make them pay?

As for Tinder, there's lots they do well but also lots that rubs me up the wrong way. Some areas to consider testing:

  • Payment screen UI: could they distinguish more between Plus and Gold? (or are they trying to confuse us?)
  • Bombardment of monetisation screens: I do wonder whether users churn to less in-your-face dating apps. Whilst they progressively disclose features, there's still an overwhelming amount in there. Again, on purpose? I think so. Risky? Yes.

What else can you do to segment users? What have you tried to monetise your app? Would love to hear.