OPW Interview - Great Expectations co-CEO - Robert Fisher

OPW INTERVIEW -- Aug 11, 2006 -- Great Expectations has been around 30 years and charges thousands of dollars a year for it’s offline, high-touch, high service offerings. I spoke with Robert Fisher, CEO of the Valentine Management Group, one of the owners of a group of Great Expectations locations. - Mark Brooks

How was Great Expectations started?
It was started about 30 years ago in California as a franchise operation and was acquired in ’95 by a group from the Advanta Corporation. When they acquired it they started buying up locations and after a couple of years they divested and it became license based instead of franchise based. Today we have multiple owners but most locations are owned by four main groups of owners who are also the licensing arm of the company.

How large is Great Expectations today?
There are over 50 locations nationwide. I would say there’s between 100,000 and 200,000 members nationwide. Each of the locations are individually owned and operated. From a revenue point of view, we’re somewhere between $50 million  to $75 million a year now. Memberships are ~$3,000 each.

What does Great Expectations do differently compared to internet dating companies and why does it work so well?
Online dating's economic appeal was that you would drive traffic to a site and capture customers by providing a no-touch service allowing you to keep expenses down. Unfortunately, customer acquisition costs have risen to a point that many in the industry are struggling to maintain profitability. Along with this, online is so commoditized that prices cannot be raised without significantly changing the offering. Many online executives have told me they tried raising prices and it cost them signups.

We offer the personal touch. Offline dating companies are all about service and touch. So, that’s the biggest difference. Most of the time, the clients are the same, with the exception of those in their early twenties. We don’t typically handle that demographic very well. We have some clients in their early twenties, but not a lot. But, the same people that internet dating companies are selling a $30 a month membership to, we’re selling them a $3,000 membership. The difference is the amount of service the client gets. Also, of the top three offline dating companies, I believe most of their locations offer identity verification and background checks.

By virtue of us having the higher price point, we’re able to deliver a different service. It’s very difficult from an online perspective to truly get to know the client. For example, at Great Expectations, in our locations, we talk to each of our clients once every 60 days. When a client is a brand new client, we make sure, before we put them fully into the system, that we hold their hand with their first few selections.  Everybody in the industry has some people who are more difficult to match than others and you can either say, okay I’m not going to worry about that person, or you can say, what can I do to help them?  Maybe I’m a bit naive, but I believe that everybody can get out on a date. I believe that if you’re not guiding some people, their fear will keep them from taking the initial actions that will help them be successful. I’ve heard only a small proportion of the people that use an online dating service ever go on a date. Well last month in my locations over 70% of the people went on a date – yes, we measure it. So that’s a big difference, in my opinion, between offline and online dating services.

How are your online marketing efforts working out?
Our online efforts work very, very well. We started marketing online in 1998 and we’ve become really strong with our affiliate marketing. 

We have an online dating site, GreatDatingSite.com, that does quite well for us. We offer it through Relationship Exchange and our conversion rates are above the standard at around 11 to 13%. I’m hearing other sites typically convert registered members to paid members at 8% to 10%. I don’t know what brings about that difference.

How has online dating helped your business?  How might it help in the future?
We really didn’t get into online dating until 3 years ago. We should have gotten into it much earlier, so that was a strategic mistake on our part. What we have done well is use web marketing to drive traffic to our online sites. I think online dating has helped our service a lot because 10 years ago there was still a stigma attached to dating services. Today there’s not, and I don’t think that offline can take credit for that. I think it’s truly online dating that’s caused the shift. The question becomes today, what is the ultimate dating service going to look like? My opinion is that we’re going to be merged down the road.  There is going to be a marriage between offline and online, and I think it will happen sooner rather than later.

Another place that online truly helped us is that it drove some of the competitors in the offline space closer together and as the result we have learned from one another. Today, I count Brad Megahan at Together and Paul Falzone at The Right One as real friends. We talk regularly and Paul's son calls me "Fisherman." That might not have happened had there not been a first IDate Conference. I actually think you will see the offline companies working together to improve their offering and their marketing over the next few years. All of us are working more with some onlines as well. And here is a hint to the others: "Call us, let's talk!"

What should the online personals industry learn from Great Expectations?
Whether it’s offline or online, the thing everybody needs to understand is that if you want to have sustainability in a business model, you’re going to have to deliver something the customer truly wants.  We can no longer get by, and in the offline world for years we actually did get by, with not delivering a good service.  We were terrible at service. I believe that today you have to deliver a very high quality of service. I think you have to talk to your customer on a regular basis and find out what you’re doing right, and what you’re doing wrong? How are your customers doing? What can you do to assist? We’ve looked at customers, whether online or offline, as revenue numbers too many times. I think that we’ve made a big switch in the last two years. As a result of us really getting strong in customer service over the last two years Great Expectations has seen a tremendous increase in the number of referrals. Our clients are happy. We touch our clients more often, we ask them how they’re doing, and we follow up with them. I think that’s where we’re making big inroads today.

One place onlines and offlines could serve each other is through joint lead acquisition strategies. We have some of these in place with online companies and they are quite profitable for both parties. Unfortunately, some online and offline companies still refuse to even get into a dialogue out of some sense of competition or fear of revealing some presumed trade secret. That is a pity.

What are your plans for 2006 through 2007?
We’ve been working on a marriage between offline and online that will go live fairly shortly. I truly believe that there is a mid-tier space that can be served that’s not currently being served right now. I think both sides, online and offline, are looking for a way to bring all this together. I’ve had enough conversation with enough people in the last 180 days to know that it will happen.

Comments

[Fernando Ardenghi]

"I think both sides, online and offline, are looking for a way to bring all this together. "

I agree and I also see two tendencies for Online Dating!

THE FLIGHT TO ENTERTAINMENT.
* 13_to_25_years_old_persons (teenagers) not interested in serious dating.
They need fun == instant gratification.
"Fun Online Dating Success" is a high level of instant gratification; Big Databases full of profiles where any new member can find the persons he/she is looking for.

THE FLIGHT TO QUALITY.
* 26_and_more_years_old_persons interested in serious dating.
They need professionalism: i.e. quality CONTACTS == compatible real persons, avoid being hurt in their feelings by other persons, confidential treatment of information provided, privacy, code of ethics, background checks, like the contacts provided by OffLine Chains, but at affordable costs (If OffLine charges USD1,500 - USD3,000 then OnLine will charge an amount between USD300-USD800)
Also ISO 9001:2000 Quality Norms: external evaluators that will certify the companies complies with Quality norms will be a MUST HAVE.
"Quality Online Dating Success" same as "Offline Chains Dating Success"; any new member will be matched with compatible real persons.

New quality online dating sites offering more power_calculation and better personality_matching_methods will have a great opportunity to World Wide succeed!

Kindest Regards,

Fernando Ardenghi.
Buenos Aires.
Argentina.
[email protected]

[Mark Brooks]

Could you explain why an online dating site should consider ISO 9001 please Fernando. I can understand B2B companies undergoing ISO 9000 certifications but I don't think the average single internet dating user will have much knowledge of it's significance.

Mark Brooks
editor, onlinepersonalswatch.com

[Fernando Ardenghi]

About ISO 9001:2000 Quality Norms == the company is audited by external evaluators.

Shaadi is the Indian Online Dating Site certified by Det Norske Veritas until 2007-10-07
http://www.shaadi.com/customer_relations/faq/iso-certification.php

It is a standardized seal of trust for prospective clients.
A group of quality systems and processes, which will help meeting customer requirements and achieving customer satisfaction!

"If you want to have a quality attitude you must have a quality system. This is what ISO recognizes, and this is why ISO 9001:2000 is important. "

Some ISO 9001:2000 main processes for Online Dating, clauses (in brackets):
Communicate with customers (7.2.3).
Identify customer requirements (5.2, 7.2.1).
Meet customer requirements (5.2).
Monitor and measure customer satisfaction (8.2.1).
Meet regulatory requirements (5.1).

A U.S. & Canada Industry (OffLine and OnLine) as big as USD 1,200 million??? CAN NOT stay without:
- Legislation.
- ISO 9001:2000 Quality Norms.

More on ISO 9001:2000 Quality Norms could be seen at:
http://www.iso.org/iso/en/ISOOnline.frontpage
http://praxiom.com/iso-9001.htm
http://praxiom.com/iso-definition.htm

Kindest Regards,

Fernando Ardenghi.
Buenos Aires.
Argentina.
[email protected]

[Teresa Plett]

First of all let me say I'm not quite sure if this is the place to post my comment, on the subject of customer dis-satisfaction, but here goes. I recently joined GE in Seattle, and yes the sales reps are well trained. They get the job done, but promises are not kept and I belive there may even be some bait and switch tactics involved. I was told infaticly that the photographer had 18 years of experience with GE and was shown pictures of her work, after having expressed my doubt of getting a good head shot for attracting anyone on paper. When schedualing the photo shoot I was not told she would be on vacation. There after sitting for an hour waiting for the shoot I what posing for her brother a still life photographer!

The room for the videos, a small office where a pocket camer is used along with the microphone in it and with that of course the interviewer is much louder than the client. The lighting either washes out the subject or creats large circles under the eyes. There is nothing profesional about this operation. While waiting for this same appiontment I was called Dian twice by the same girl, not my name!

Reading your column I see there is supposed to be personal contact every 60 days. Not happening here.

The people in the service are supposed to be available and ready to date, this is what they asked of me. How is someone not divorced fit into this catigory? Leagaly separated or not? Talk about baggage!

There are members who are asked to come in to update their photos, what about their profile? I met someone in this service recently who stated 0 children at home. Not only 0 but 5, and 1 more on college break. Stated college Grad. Whent for one year. The screaning prosses is not what is presented at the onset as what seems is nothing else.

I would never recomend this service to anyone, and I will not be a repeat customer. Thank you for you time. Sincerely, Teresa P.

[Robert Fisher]

Teresa,
I am sorry you have had a bad experience in the Seattle location. I do not own that location but I have sent an email to the owner and have forwarded all your comments from the blog to him. I am hopeful that he will do something to change your opinion of Great Expectations. I have requested that he respond to me no later than this week. I will respond on the blog once I have that.
Sincerely,
Robert Fisher

[Jim]

What happened in Kansas Mr. Fisher, we seen your interview in the local news remarking that the Attorney General's lawsuit was baseless. Did they get the full $1.1 million in customer restitution they sued for or did you settle for less.
http://www.kansascity.bbb.org/commonreport.html?bid=91020026

[A.]

I would like to comment on Great Expectations. It is a lie that they talk to each of their clients once every 60 days. I have been a member of the service for more than one year, and nobody has ever called me. Furthermore, the database is lousy, and the service is worse than those who charge you only $30 per month. These people do not care about anybody - they just want to make money.

[John Smith]

I know Robert Fisher personally and have worked for G.E. in the past. It's a high pressure sale that uses emotional manipulation to get the high prices for the membership. When I worked there it was extremely shady. Many things were promised that never were delivered.

J.S.

[Kate Martin]

I will second Teresa's note above. I signed up with the Sacramento office. My photo appointment was cancelled twice within hours of the appointment, no apologies. Each time, I was told thye would call me back to reschedule, and never heard from them.

When I had billing and contractual questions, I was referred to Ann Victor, the Operations Director in NH. I have never in my life been treated so disrespectfully or dealt with worse customer service as I experienced with this woman. I am in business, and I am certain that if I spoke to my customers as she did to me I would be fired immediately. She was very rude, very insulting, yelled at me over the phone, and ended our conversation by hanging up on me while I was still talking. I literally called to ask her two questions about the billing process.

Furthermore, I am 28 years old and was told that there were plenty of gentlemen my age who would be good matches for me. I was completely misled and found that my selection was very small, with only 8-10 members under the age of 32.

I am contractually bound to this company for another year, but would rather pay the money and walk away than participate in this hoax for one more minute. I will not do business with a company who does not respect it's clients.

I am very dissappointed with this company and those who run it. In business, your customers are everything. I hope Great Expectations recognizes that it is unacceptable to treat your customers this way if you expect to last another '30 years'.

-Anonymous

[Frederick]

I can add my own complaint regarding the St. Louis office of Great Expectations, now called Club1, in Maryland Heights, MO. I was grossly misled about the number of members in my age range and about the rate at which new members sign up. Rhonda Bilbruck, the director, and Tiffany, one of the employees, told me that there were 100-125 female members in the age range I specified (24-34) within the St. Louis area, with 4-5 new members signing up each week. In reality, there are only 22 active female members in this age range, and they have less than one new female member in this age range signing up each month!

I have made numerous complaints to their office, and unfortunately they have mostly ignored me. I have now gone through the Better Business Bureau (where they have a C- rating) and the MO State Attorney General's office to try to get my money back. Interestingly, they even breached their own contract which states that in a dispute, arbitration with the BBB is MANDATORY -- they actually declined the arbitration request when the BBB sent it to them! I have never in my life seen a company behave so unprofessionally.