Conversations: Should Twitter "Fire" Its Users?

(Update: This post was written before Twitter put a muzzle its users. Eerie…)

I’ve had the pleasure of some rather thought-provoking conversations recently, all on Twitter. Some of the best discussions covered:

Finding/filtering information on Twitter — and whether hashtags fail
The role of agencies in social media
Whether Twitter should “fire” customers
Advertising on social networks
Desktop apps, the potential demise of Twitter, and why it doesn’t matter

Pretty engaging stuff, huh? I thought it would be useful to recap those convos on my blog and introduce you to the brilliant thinkers who participated. Today, let’s talk about whether Twitter should “fire” some customers.

Twitter Retention Problem? Quit Attracting New Users

Jason Keath, one of Charlotte’s social media leaders, prompted this debate by asking: “How do you think Twitter could improve their retention of new users?” He followed with a killer post on Twitter’s user retention problem. My response to his question (“Stop attracting new users…”) prompted a discussion about “firing” customers or clients.

@jakrose Stop attracting new users…
@ScottHepburn clever, not sure investors would love that.
@jakrose It sounds flip, but it’s legit strategy. If goal is profit, caring for “core” may trump adding here today, gone tomorrow users.
@ScottHepburn the core has proven not to need much care. not investing in customer retention seems short sighted for a company yet to profit.

Fire Users Who Aren’t Profitable

My conversation with Jason prompted this exchange with Brent Friar (@BNRBranding):

bnrbranding: Having a strong “core” is akin to having a strong foundation for a building. You can’t build much on a weak foundation.
ScottHepburn: True that. Which is why the Oprah effect is BS. Like doubling the sugar in your sweet tea…doesn’t make it better.
bnrbranding: The key is to build your core, then cash in on the bandwagoners while you can. But you have to maintain the core throughout
ScottHepburn: Profitable businesses “fire” clients all the time. Twitter will fire 80% of its customers, too. Just wait… (emphasis added)
bnrbranding: I think a lot of business take on bad customers because they don’t think they can fire customers.

My half-serious, half-joking prediction about Twitter raised a few eyebrows. “Whaddya mean, fire customers?” I had some great conversations via DM — I’ll recreate them here, but omit names for privacy reasons:

I think Twitter will build its audience, then find a way to charge. Your hardcore users, your true believers, will pay.
Or they’ll find some other way to cash in on the demand generated by the hardcore fans. Oprah effect users are disposable.
We tend to think everything should be free. Thank the Web. Not sure it’s a good thing. Doubt I’d pay 4 twitter, but I might.
- I’m so with you. and i will go to facebook instead of paying
- If the price point is reasonable i will (don’t care to rebuild a following) but if it’s stupid or goes up, i won’t.
Depends on alternatives. I live 4 conversation like this. Can FB measure up? If not, who? My life is far better b/c of the convos.
- As FB becomes more like Twitter (SMS capabilities, open API), it could potentially replace it.
- Also with seesmic tweetdeck-like interface that makes FB look like twitter, it’s not a stretch.
- Plus, it’s proven to be more stable so who knows? not ideal, but possible.

Twitter Will Charge for Service…Just Like Newspapers

My belief that Twitter will eventually charge users for its service goes back to newspaper. Yes, newspapers…remember them?

When the Wall Street Journal launched WSJ.com in 2003, it was big news. Newspapers had just started coming online. Falling ad revenues (yes, even then) meant newspapers needed creative ways to attract eyeballs to justify their rates to advertisers.

WSJ.com built a massive online readership. And then, shockingly, began charging for an online subscription. The subscription fee cut online readership about 90%. But here’s the funny part: The paying subscribers comprised a very narrow, highly targeted, wealthy, business-oriented demographic — just what advertisers wanted. Subscription revenues and premium advertising rates made firing readers a profitable transaction.

Today, most newspapers still provide content free online. But that’s changing. As print revenues plummet and newspapers collapse, many are wondering if charging for online news is the way to go after all.

Back to Twitter. We’ve all heard of the Oprah effect: Twitter saw a 43% increase in traffic after Oprah joined. The service is adding users by the hundreds of thousands.

But so what?

Twitter will have to cash in one day. Sure, there are rumors of a sale to Google, and a Facebook buyout bid was rejected. But I’ve done the math: 30 million users x $10/month x 12 months/year = $3.6 billion in annual revenue. Even if Twitter “fires” the 90% of users who don’t want to pay, that’s still $360 million in revenue a year.

Still think Twitter won’t charge you?

http://thelostjacket.com Stuartfoster

I think the problem here is that the technology is far to easy to replicate. The appeal of Twitter is its population of users and little else. I would be on another platform if the people I looked up to decided to jump ship. It just has to hit a critical mass of people leaving in order for that to happen. We are already seeing an exodus to friendfeed…could a paid model really be that valuable?
http://www.bnrbranding.com/ Brent Friar

Wow. I hadn't really thought of the math involved on a scale the size of Twitter. For anyone who has taken the time to build a sizable (and more importantly targeted) following, I would imagine that a small fee would be preferable to pulling up stakes and starting over elsewhere. I know I would pay it.

To take your example one step further, Twitter could offer their service for $1 per month, fire 90% of it's users, and still pull in $36M a year. Plus you would have a highly refined userbase that would be worth a lot more to advertisers.
http://thelostjacket.com Stuart Foster

I think the problem here is that the technology is far to easy to replicate. The appeal of Twitter is its population of users and little else. I would be on another platform if the people I looked up to decided to jump ship. It just has to hit a critical mass of people leaving in order for that to happen. We are already seeing an exodus to friendfeed…could a paid model really be that valuable?
http://www.bnrbranding.com/ Brent Friar

Wow. I hadn't really thought of the math involved on a scale the size of Twitter. For anyone who has taken the time to build a sizable (and more importantly targeted) following, I would imagine that a small fee would be preferable to pulling up stakes and starting over elsewhere. I know I would pay it.

To take your example one step further, Twitter could offer their service for $1 per month, fire 90% of it's users, and still pull in $36M a year. Plus you would have a highly refined userbase that would be worth a lot more to advertisers.
MediaMensch

Twitter's main issue is it has to grow up – meaning it has to decide on its interface. For most users Facebook's discussion/comments/posting is easier to use and feeds out to people you know creating a real conversation among friends.

The other thing twitter faces is that although the character limitation is a cool thing, it is also not conducive to true conversation and response. It causes sometimes people to put in half or incomplete thought, bad grammar, etc.

As far as subscription models, social media and paid models are not out their yet, in fact that is why newspapers are closing. Most people are not willing to pay for consumer type content anymore. (versus business/intellectual). Look at Classmates.com vs Facebook. Which one grew the fastest and has the most relevancy?

Good points and discussion.
MediaMensch

Twitter's main issue is it has to grow up – meaning it has to decide on its interface. For most users Facebook's discussion/comments/posting is easier to use and feeds out to people you know creating a real conversation among friends.

The other thing twitter faces is that although the character limitation is a new concept, it is also not conducive to true conversation and response. It causes people to put in half baked or incomplete thoughts, bad grammar, etc.

As far as subscription models, social media and paid models are not out their yet, in fact that is why newspapers are closing. Most people are not willing to pay for consumer type content anymore. (versus business/intellectual).

For social networks – paid vs. free – look at Classmates.com vs Facebook. Which one grew the fastest and has the most relevancy?

Good points and discussion.
http://factor77.tv Jared O'Toole

What I love about twitter is how those # increases don't matter to me. I dont follow those people if I dont want to. So I dont see their conversation or care when they dont ever come back to twitter. Follow who you care about and thats all that matters.
http://Under30CEO.com Jared O'Toole

What I love about twitter is how those # increases don't matter to me. I dont follow those people if I dont want to. So I dont see their conversation or care when they dont ever come back to twitter. Follow who you care about and thats all that matters.
Rick

Scott,
Interesting observations. There is much discussion and knowledge about twitter at the national level. Here's what I'd like to know about Twitter: What's the best way for for local, small business to capture followers and build relationships (and eventually, prospects) — especially b2b professional service companies (accountants for example) or health care professionals (optometrists as another example)? They don't need followers from India or Australia.
Rick

Scott,
Interesting observations. There is much discussion and knowledge about twitter at the national level. Here's what I'd like to know about Twitter: What's the best way for for local, small business to capture followers and build relationships (and eventually, prospects) — especially b2b professional service companies (accountants for example) or health care professionals (optometrists as another example)? They don't need followers from India or Australia.
Rick

Scott,
Interesting observations. There is much discussion and knowledge about twitter at the national level. Here's what I'd like to know about Twitter: What's the best way for for local, small business to capture followers and build relationships (and eventually, prospects) — especially b2b professional service companies (accountants for example) or health care professionals (optometrists as another example)? They don't need followers from India or Australia.