MAKING MONEY HELPING SINGLES MINGLE Many of the 60 million unattached adults in the U.S. spend freely to find a mate. So far only a few corporations and a pastiche of local entrepreneurs have been able to profit from this huge business opportunity.
By Edward C. Baig RESEARCH ASSOCIATE Sarah Smith

(FORTUNE Magazine) – IN THE ROTUNDA at New York's Madison Square Garden--where elephants congregate at circus time--a different sort of three-ring affair attracted crowds one recent weekend. Some 34,000 men and women plopped down $10 each to attend a trade show for the unattached called Single in New York. Run by Everything for Singles Inc., an $8-million-a-year company that wants to bring the show to four more U.S. cities this year, the convention featured lots of lonely hearts eyeing each other while listening to the pitches of dating services, hotels, travel agents, and other less obvious participants in the bustling getting- people-together industry. It was inevitable, of course, that Cupid and the business world would pair off. The singles market in the U.S. consists of 60 million adults over 18 (56% female, 44% male), most of whom are under 40, relatively affluent, and willing to turn over a large part of their disposable income to the hunt. But business success is no cinch. Companies that seem to be making the best of it are small, local, entrepreneurial outfits. Singles may reasonably believe that the way to meet the girl or guy next door is to use a business down the block. Still, many dating services, singles bars, and singles-oriented adult education companies are expanding nationally, via either franchises or company-owned branches. A few already trade their shares publicly. Major corporations that are happy to sell single-serving soup or specially designed financial plans to the unmarried seem to have no interest in the business of matchmaking. In some of its manifestations, it seems less a business than a collection of gimmicks engineered by charlatans to take advantage of people in need. But the same could have been said about the weight-reduction business two decades ago. Then Weight Watchers International managed to garner respectability, national scale, and an acquisition offer from H.J. Heinz. It's been a good business for Heinz. In Japan some corporations run dating services, not as businesses but as employee benefits. The services match employees with workers from the same or other companies. Abby Hirsch, who runs a New York City matchmaking service called Godmothers, has studied the Japanese system and is trying to sell U.S. corporations something similar. According to her research, single American workers spend eight hours of company time a week on their social life, twice as much as married employees. Hirsch hasn't signed up any corporate clients yet. Marketing mate-meeting is tricky. Firms must strive for respectability: advertising must be sensitive and high-toned, and word-of-mouth endorsements are the best ads of all. A company selling singles the prospect of meeting other singles cannot be too obvious. ''You don't want anyone to know that people aren't falling all over you,'' says a single female writer living in Manhattan. The more overt the pitch, in fact, the less likelihood of success. For example, restaurants that cater to a crowd of unattached people, many of whom seem to meet during the course of the evening, usually reject the label singles bar. If you believe what singles say rather than what they do, no one goes to singles bars. Personal ads, where singles can hide behind the anonymity of a post office box, are booming. Once the province of the obscene and psychotic, personal ads now appear in scores of newspapers and magazines, including some surprising ones. An ad in a January issue of the conservative National Review read: ''Inaugural Ball: Want to attend at minimum cost? Reaganaut woman with tickets (41, OK looks) seeks escort . . .'' The Chicago Tribune, which began printing ''Only Hearts'' ads in 1982, ran one recently that said, ''Good things do come in big packages.'' New York, a weekly city magazine with a circulation of 434,000, has had to hire two extra employees to handle the mail generated by its two-year-old personal section. Placing an ad in the magazine costs $23 per line, plus $15 for a New York box. The personals are bringing in an estimated $25,000 in revenues an issue, or $1.3 million a year--35% of the magazine's total classified revenues--and they are a help to circulation as well. ''We haven't publicized them at all,'' says publisher Carolyn Wall. ''It's just a social phenomenon that took off in 1984.'' According to Kathy Metzger, the classified ad manager for the highbrow New York Review of Books, a publication running personals since 1969: ''It really is a cost-effective way to meet people. The last time we figured it out, ads cost under $2 per response. That's less than any drink in a singles bar. Unless it's Happy Hour.'' Every major metropolitan area seems to have at least one publication just for singles. Denver has seven. Filled with advice columns, horoscopes, and occasional stories--''Living with Your Parents?'' for example--these newspapers are laden with personal ads. In fact, Los Angeles-based Intro stopped printing editorial matter and now publishes only personals. Dating services are opening all the time, but they have one potentially fatal marketing problem: people are often too embarrassed to use them. Common in Europe and the Far East for centuries, marriage brokers are regarded in the U.S. as the last resort of the truly desperate. Damian Whitaker, the owner of Two's Company Video Introductions in Atlanta, says he comes across people who say, ''I'd kill myself before I'd go to a dating service.'' SOME old-fashioned matchmakers still thrive. Dan Field, 57, who met his wife of 27 years through his Uncle Irving, runs a service his grandfather started in Russia 65 years ago. A sign in his small Manhattan office advises: ''This is not a Lonely Hearts Club. This is a Matrimonial Agency Exclusively for Companionship and Marriage.'' In a heavy Yiddish accent, Field explains his business: ''In the old days the parents made arrangements for the children to get married, and that marriage lasted. Today I do the same thing.'' Unbeknownst to a daughter, her father may tell Field he wants her to meet a doctor. Field peruses his thousands of file cards to come up with a name. The parent then tells the daughter the old story about having a friend who has a son who happens to be a doctor. Field charges between $25 and $250, depending upon ability to pay and the number of dates necessary to find the right match. ''Money is not important,'' he says. ''But I make a living.'' Up-to-date matchmaking is more complicated, often involving computers, videotape machines, and high fees. Though dating services can be started on a shoestring--with only a telephone, a pencil, and file cards--companies need a marketing strategy to attract members. Even if a firm is lucky enough to entice Prince Charming to join, there has to be at least one princess to fix him up with. Matchmate, a Denver computer dating company that opened last Valentine's Day, gave away its first 500 memberships, then blitzed the local papers with an advertising campaign to attract 500 more. The service charges $10 to put a name into the computer bank, plus another $25 to get three names of possible dates out. Major shareholder David F. Nolan, 41, says Matchmate, which now has 2,500 members, is breaking even. Nolan wants to expand to two other cities by Labor Day. HEATHER STERN, 35, a lawyer, started Personal Profiles Inc. in Chicago three years ago. She compares her introduction service to an executive search firm and advertises in Crain's Chicago Business, among other magazines. Stern is aiming at the highest levels of singledom. Men and women who call the telephone number in the ads are screened--and told of the $650 fee--before they are invited to visit Personal Profiles' plush North Michigan Avenue offices. There one of Stern's six counselors conducts an interview, assessing the prospective client on personality, poise, intelligence, and fashion. Once two members are introduced, Stern queries both to find out such things as what values the couple shared, where they went on their date, and whether they planned another. Together Development Corp. also evaluates potential members with an intense interview--How far will you travel? Where do you stand on politics, drugs, gambling, sex?--as well as a 78-item questionnaire. Founded ten years ago in Rochester, New York, Together now has 55 company-owned or franchised offices in 14 states that bring in about $5 million in sales a year. Co-owner Horace Trimarchi says the company is earning 30% pretax on sales. Together gets most of its members, who pay $250 to $750 for one year of monthly referrals, through television and print ads. The company spends $25,000 a week on advertising, not including the extra commercials it runs at such strategic times as New Year's Eve and Valentine's Day. ''People think dating services are not legitimate, especially if they see a tiny ad in the back of some schlocky paper,'' says Jeffrey Pappas, another owner. ''But when they see you on TV, that immediately lends credibility.'' Video dating uses the immediacy of TV in a different way by interviewing customers on camera. Jeffrey Ullman, who claims to have invented video dating, runs Los Angeles-based Great Expectations Creative Management, which makes about $1 million a year franchising its Great Expectations dating companies. Video dating is expensive: it costs $500 and up. For that, members can come to centers to look at each other on three- to five-minute color videotapes. Full names and phone numbers are exchanged only after both parties have seen and approved each other's screen tests. Critics are quick to point out that some people aren't at their best on the tube. Cindy Lewis, 30, a beauty consultant for Mary Kay Cosmetics, met her fiance at Great Expectations, but she initially rated his tape No. 5 of the five she selected. Ullman, the founder, also met his wife, Stephanie, through Great Expectations. Not everyone has found happiness in the video business. Allan N. Stillman, one of three partners who founded New York's People Resources Club, sold out in 1983 because ''we couldn't make any money.'' The investors had opened four People Resources centers around New York but quickly closed down three suburban locations when they couldn't get enough members. Current owner Reno Turtur, 53, is putting thousands of dollars into weekly advertisements in the New York Times in an effort to build up membership. The advertisement, however, refers to a nonexistent affiliation with a Manhattan health club. Apart from the dating services, companies with a find-a-partner constituency are generally reluctant to admit it. Some don't want to alienate married customers by making them uncomfortable in an avowedly singles atmosphere. Others know that the word ''single'' doesn't sell. Psychologist Karen S. Rook, of the University of California at Irvine, says that programs claiming to bring lonely or isolated people together for a purpose other than just getting together ''may be more successful than programs in which the goal of promoting social ties is made quite explicit.'' Adult education has always been a magnet for singles and big-city for-profit learning centers are proliferating. Offering cheap noncredit courses that meet no more than a few times--if Ms. Right isn't there, at least you don't have to endure a full semester--these low-budget night schools attract a student body that is 60% to 70% single. ''We're catering to the singles market,'' says Clive Kabatznik, the chief financial officer of New York-based Learning Annex. ''But when they get married, we'll give them a course called Massage for Couples.'' Singles go to school figuring that even if they don't meet somebody at least they'll learn about anthropology. Or some racier subjects. Some of the 30 or so course offerings at the Open University of Washington: Sex, Sex, and More Sex, 22 Creative Strategies for Being Your Own Matchmaker, and the Art of Flirting. These classes are always full. COMPANIES PAY teachers, many of whom are social workers or psychologists, around 30% of the gross. Teachers with the most students get the most money. Rents are low because the companies hold classes at instructors' houses or municipal facilities during off-hours. The Learning Annex, a public company that runs classes in Chicago and Atlanta as well as New York, still lost $166,000 on sales of $1.5 million for the fiscal year that ended last June, and had a negative net worth of $142,000. Owners of health clubs, which are popping up all around the country, get exercised at the notion that their businesses are just singles bars with sweat. William Peltier, spokesman for Bally's Health & Tennis Corp. of America (FORTUNE, April 16, 1984), says all advertising for the company ''is geared to fitness and health.'' Says Nanette Pattee of the Sports Connection in Los Angeles, ''We are actually afraid to emphasize meeting people; it really insults our members that people think they're coming here just to fool around.'' Still, more and more health clubs are installing wine and juice bars where singles can watch each other's muscles flex. The Los Angeles Athletic Club has formed singles-only activity groups that go whitewater rafting or take weekend tours to California vineyards. ''Being single,'' says club president Charles Hathaway, ''is the reason an awful lot of people join.'' Even real estate developers are getting into romance. In Denver privately owned Condominium Marketing Corp. has taken to calling some of its two-bedroom apartments ''mingle units.'' These large apartments attract roommates of the same or the opposite sex. The strategy seems to be working: 60% of the company's $7 million in sales last year were to singles. Unattached men and women who can afford a $600-a-month one-bedroom rental or a $60,000 condominium at Four Lakes Village in the Chicago suburb of Lisle, can mix at the complex's own ski hill, health club, and pub. Jon C. Stovall of First Property Management Corp. in Chicago, which manages Four Lakes, is wary about pushing the singles pitch too far. ''From a marketing standpoint, it is not very bright,'' he says. ''You want to exclude as few people as possible.'' Still, some 70% of the Four Lakes population is single. Luring singles away from home is also a growing business. The Concord Resort Hotel in upstate New York schedules five singles weekends a year. Each brings in about 2,500 people and about $500,000. Club Med, however, is trying to play down its somewhat racy reputation with a generic ''Antidote for Civilization'' pitch. It says that half its members are single and half married. In trying to avoid the matchmaking tag, Singleworld, a travel company with over $15 million in annual sales, perhaps protests too much. Says Richard Lowenstein, the president of Gramercy Travel System, Singleworld's parent, ''We are not a lonely hearts club, we are not a marriage bureau, and we are not a cruise with equal numbers of men and women.'' Yet Singleworld takes 15,000 single people a year--65% female--on worldwide cruises and sightseeing tours. Singles bars, rejecting their image as ''meat racks'' or ''pickup joints,'' mostly insist that they are not singles bars at all. ''We are a sports bar,'' says Charlie Olson, the major owner of Chicago's crowded Ultimate Sports Bar & Grill, where a boxing ring serves as the dance floor. Says J. Stuart Sargent, the president of Dallas-based Studebaker's of America, ''If a business is promoting the fact that it is a place for guys and girls to meet, and that was the only thing it had to sell, I don't think it would stay in business.'' KEEPING UP with singles' fickle fads or with some new trendy bar down the street doesn't make for long-term success: drinking establishments fail twice as often as all retail outlets. TGI Friday's, a public company and one of the most successful singles bars during the early Seventies, has abandoned the business almost entirely. Friday's now has 111 family-oriented restaurants and derives just 35% of its $285 million in annual revenues from the sale of alcoholic beverages. That's down from the singles days when alcohol accounted for 50% of sales. ''If we stayed with just the same thing, customers would have said, 'Well, gee, that was nice. So what else is new?' '' says Gregory Dollarhyde, a Friday's vice president.

Publicly traded Max & Erma's Restaurants Inc., based in Columbus, Ohio, also found that people tired of what was once its unique selling feature: telephones at the table so that a customer could call a person across the room. After losing $761,000 on sales of $17.9 million in 1984, Max & Erma's is pushing food not phones. The company closed four restaurants over the past two years, but still has ten in six cities, four with phones. McFaddin Ventures, a publicly held company with $2.5 million in profits on $31 million in sales for the first nine months of 1984, figures that it will just change any of its 26 clubs when the fad it is based on runs its course. It turned Cowboy, a singles restaurant and a locale for the film Urban Cowboy, into a unit of a new chain called Confetti. ''Around here we view our properties like a Broadway theater,'' says President Michael Boxberger, 38. ''When the play closes, you don't tear the theater down. You change the props and open another play.'' Occasionally McFaddin guesses wrong. The company is writing down Thrills, a three- club chain dedicated to New Wave music. That may explain why McFaddin's stock is trading a few dollars off its December 1983 offering price of $12.50 a share. McFaddin is currently betting on its four Confetti operations. ''The key element to success is the ability to attract attractive women,'' says Boxberger. To do that, McFaddin creates a vibrant, partylike atmosphere. Greeters, not bouncers, are at the door, and everyone is in costume. After the manager presses a blackout switch, the bartender strikes a Frank Sinatra pose and the cocktail waitress starts to sing like Tina Turner. Good clean fun is literally the attraction at Barwash in Austin, Texas. Part laundromat, part saloon, Barwash broke even just a month after opening in October. A zigzagging glass partition separates the washers from a bright, cafelike place where customers can buy beer, wine, and sandwiches. Tables are set about a foot below the window, so patrons can fold their laundry in private. ''Someone would really have to crane his neck to get a peek at your negligee,'' quips owner Robb Walsh, 32. He is preparing a manual with an eye toward franchising. Selling singles a chance on love may be a bit like selling mouthwash. No one likes to acknowledge that he needs it. In the singles business the only other generalization that seems to apply is that the product or service has to be enough fun to justify the price. The ways to meet that singles consider fun may be too disparate for any one concept to blossom into a FORTUNE 500 company. But with all those dollars in singles' pockets, entrepreneurs will keep on trying.