Twitter finally hit the mainstream about 8 months ago, but I’ve been saying for a couple of years now, without a real way for the company to earn money, what’s the future fate of Twitter?

On the personal side, where is the real value for the users?  For the most part, Twitter has replaced most people’s IM (instant messaging), at least in the technology circles I run in.  It still has value for users as a communication tool.  But I see it more as a fad.  My prediction is over the next 6 months we’ll start seeing a usage drop (if we haven’t already started to see it).

On the business side, how does Twitter make money?  It doesn’t.  If you use the text messaging capabilities, you see a few ads.  But most smart phone and PC users, won’t ever see them.  I still think Twitter has the best chance to make money by forcing the “collectors” to pay money.  You know what I mean by “collector”, those people that collect tons of followers or friends.  If Twitter caps the number of followers and makes you pay to have more, would you?  The normal twitter user doesn’t have that many followers, and this is where my title comes in …

BUT

The financial value for Twitter is really seen through businesses connecting with their customers.  I’ve seen 3 effective ways this has been accomplished.

1. Giving your customers a coupon or announcing a sale

My favorite is @amazonmp3, Being a huge music lover, I get notified when they put music on sale.
Various restaurants like @ruthschris_ARK will let their favorite customers know about certain specials
@BluefinMemphis I was traveling through Memphis once looking for a sushi restaurant when they had %50 off if we mentioned we saw them on Twitter.  It was their first attempt at trying to encourage customers in the door, and after talking with the management, it was a huge success

2. Giveaways

@namecheap Several companies have started huge marketing campaigns, but my favorite is watching companies post trivia questions, and the first person to respond wins a prize.

3. Responding to Customer Complaints

I once posted a complaint about American Express (a company that I have slowly come to really dislike) but they actually had someone contact me to try and resolve the issue.  I give them credit for paying attention, but still dislike them for their horrible credit practices.