In my post last week (Would you pay for Twitter?) I got a comment from a reader who asked:

“Here’s my question, if you are a business and offer a lot of things for free, how do you parley that into appropriate revenue without disengaging your audience?”

That is a very good question, and one that every business (or would-be business) should be asking. I started thinking about this a couple of years ago, posting this article (How Can You Measure the Value of a Conversation?) in October ’08. Here is the heart of the message:

Make money “because of”, not with

The “because of” effect is much more powerful than the “with” effect. One of the commenters on Jason’s post, Mack Collier (The Viral Garden), hits the nail on the head with:

…companies that are NEW to social media, wanting to use metrics and measurements that they are used to when using TRADITIONAL marketing methods to ‘get their message out there’. Their thinking is ‘how do we make money from this?’, whereas companies that have been active in this space for a while, such as Dell, understand that by PARTICIPATING that they will make more money as a BYPRODUCT of their efforts. Dell has been in the game long enough to see the impact that their efforts are making, and as a result have shifted away from the ‘how do we make money with this?’ mentality.

Attempting to DIRECTLY monetize social media efforts is the quickest way to ensure they fail. But companies that aren’t familiar with this space don’t know any better. In a few years, after more companies are more familiar with these tools, I think we’ll see them looking to INdirectly monetize their efforts, while putting the focus on SM as a way to DIRECTLY connect with their customers.

One of the best lessons that I learned from the SOBCon event that I attended in May was that blogging (and Social Media in general) should be treated like a business. That business is the marketing of your products and services & establishing yourself/your business as an authority. The goal of that business is to make money because of your blog (or Social Media efforts), instead of with your blog.

Let me repeat that for you – “by PARTICIPATING [you] will make more money as a BYPRODUCT of [your] efforts”.

Money as a by-product of participation

How exactly does this work? Well, it is both easier and more difficult than it sounds. The very first thing that your business can provide for free to its customers is Value. Something above and beyond the products and services that gives your customers a reason to visit your place of business or website, or follow you on Twitter, or friend you on Facebook (this list goes on and on).

For a real-world example, using a “place of business”, look at Starbucks. The mental images of the starving artist or writer slaving away over a venti latte, or the entrepreneur using Starbucks as an office are so common as to be a cliche. But they are a cliche because Starbucks offers something that places like McDonald’s do not – a welcoming atmosphere with music and ambiance, access to coffee and snacks, and typically like-minded folks to chat with. That is the value. That is what makes people come back.

Now, this example is not representative of what you can do with Social Media, or is it? Imagine that your blog or website is the Starbucks, how do you go about inviting people to come and hang out there? Give away some cool, free stuff. I’m talking about your blog posts, or FAQs on your industry, or whatever it is that draws people to your site in the first place. Give them the answer or information about the solution to the problem that they have, then give them even more. Add value.

Then add an opportunity for your visitors to have a conversation.

If you let them speak they will come

Online communities are exploding in popularity and will continue to grow. As Clay Shirky discusses in his book Cognitive Surplus (review here Thoughts on Cognitive Surplus) people crave community and the online space has the lowest barrier to entry, ever. Letting your customers talk to you and to each other gives you a Starbucks-like place for your potential marketspace to congregate. Then, and only then, can you get involved in the conversation – providing that added value, building your credibility and authority, and finally creating a rapport that invites your community to ask to buy something from you.

Jeffrey Gitomer says “People hate to be sold, but they love to buy”

In his Little Red Book of Selling (which every blogger and business person should read by the way) Gitomer says, “If they like you, and they believe you, and they trust you, and they have confidence in you…then they may buy from you.” That is what you are doing when you build the community and marketspace. Do ask compelling and engaging questions. Don’t sell your product or service.

Ask the community what they think. Talk about profit and productivity. Remember, they are taking the time to be involved in their community, not your community, it all needs to be about them.

I trust that this has given you some ideas for your own business and how to apply this concept to create more sales as  by-product of your Social Media activities. If you still have questions and are interested in being the feature of a case study on this topic (to be published for free on this site), please send me an email and we can talk about your situation.

A recent survey has some pretty surprising results:
Survey – How Many Would Pay For Twitter? Zip, Zilch, Zero – NYTimes.com

If microblogging service Twitter was entertaining even the slightest notion of charging for its service, then it might want to reconsider. A recent survey of nearly 2,000 people found that zero percent – you heard correct – of respondents would pay to use the service.

The survey, conducted by the University of Southern California’s Annenberg School for Communication and Journalism, is part of its yearly “Digital Future” report, which looks at the overall state of the Internet in the U.S., from adoption to views on advertising and paywalls.

Jeffrey Cole, director of the Center for the Digital Future, said that the response shows just how difficult it can be to begin charging users for services and goods they already receive for free.

“Twitter has no plans to charge its users, but this result illustrates, beyond any doubt, the tremendous problem of transforming free users into paying users,” said Cole. “Online providers face major challenges to get customers to pay for services they now receive for free.“

Well, now. I have to say that I am extremely skeptical of that survey, as I would pay as much as $50 a month for a “Power-user” account on Twitter, or perhaps to Tweetdeck for the information and connections that it provides.

I could definitely see a multi-layered version of Twitter, following the example of other online services that provide basic features for free and more powerful features for paying members. Even third-party providers such as Tweetdeck, Seesmic, or Hootsuite could benefit from a tiered user business model.

In fact, the NYT article goes on to say:

While the survey came up with nobody saying they would pay for the service, we have to imagine it was just missing the proper segment of the population. Our own reader poll (last year, at that) found that 20% said they would pay under $5 a month to use the service, while 66% said they would pay nothing. As for our own Marshall Kirkpatrick? He said that he would easily pay $50 per month for what he gets out of Twitter for a number of reasons.

Here is some of what Kirkpatrick has to say about Twitter:

Twitter is an incredible professional development tool. I know that’s the case for journalists and I strongly suspect that it is or will be used in the same way in lots of other industries. You show me an industry where you can’t find a competitive advantage in learning more, faster and from highly active people in that industry and I’ll show you an industry that I at least am thankful I don’t work in.

Ditto that. When I was freelancing I was getting tons of referrals and leads from Twitter, which like Kirkpatrick paid my rent and car payment. Not too shabby.

Even though I now have a full-time job managing a restaurant, I use Twitter and Facebook to promote and communicate with my customers. I could be using it more and better, and frankly if I had to pay for that access I would. (In addition, the demographics in the region makes the online marketing kinda tough – the locals are not as “plugged-in” as they tend to be in a larger market.)

What are your thoughts on paying for Twitter? Yes, no, maybe? Share in the Comments.

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For those of you out there with websites and blogs built a few years ago there is some important news from WordPress:

WordPress › News » PHP 4 and MySQL 4 End of Life Announcement

Our approach with WordPress has always been to make it run on common server configurations. We want users to have flexibility when choosing a host for their precious content. Because of this strategy, WordPress runs pretty much anywhere. Web hosting platforms, however, change over time, and we occasionally are able to reevaluate some of the requirements for running WordPress. Now is one of those times. You probably guessed it from the title — we’re finally ready to announce the end of support for PHP 4 and MySQL 4!

First up, the announcement that developers really care about. WordPress 3.1, due in late 2010, will be the last version of WordPress to support PHP 4.

For WordPress 3.2, due in the first half of 2011, we will be raising the minimum required PHP version to 5.2. Why 5.2? Because that’s what the vast majority of WordPress users are using, and it offers substantial improvements over earlier PHP 5 releases. It is also the minimum PHP version that the Drupal and Joomla projects will be supporting in their next versions, both due out this year.

If you would like some help in upgrading your site and hosting, please let me know, very reasonable rates!

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…and it’s Big Brother coming your way: (from NoisyRoom.net)

From TorrentFreak:

After the U.S. Government took action against several sites connected to movie streaming recently, nerves are jangling over the possibility that this is just the beginning of a wider crackdown. Now it appears that a free blogging platform has been taken down by its hosting provider on orders from the U.S. authorities on grounds of “a history of abuse”. More than 73,000 blogs are out of action as a result.

Yesterday, an event took place here in the United States that got little comment – cue the crickets… WordPress host Blogetery and 73,000 WordPress blogs were shut down, marking the beginning of a modern day 1984 society in the US. A chill rippled through the blogging world and the internet sparking 1st Amendment fears and a Constitutional outcry from those paying attention.

I remarked that this was “Possibly the biggest violation of Constitutional rights I have seen in my lifetime…” I twittered, facebooked and sent this out to the largest bloggers on the web. Silence ensued, apathy reigned and a disquieting sense of despondency descended. Only The Radio Patriot commented on the fact that their Google, Blogger account just vanished some time ago and that it now feels like ‘1984‘ in the realest sense of the title.

I agree with the author, back up your sites, and have an alternate hosting plan in place.

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You might have heard of my friend and blogging consultant, Chris Garrett. He wrote the Problogger book with Darren Rowse.

Well he has a new ebook out that tells you everything you need to know to get quality authority links and a boost in traffic, all through a quick and easy approach to guest blogging.

Right now he is offering it for the crazy low introductory price of only $7! This price is sure to go up within days as the reviews and testimonials start to pour in, so make sure you grab your copy and check out all the bonuses fast.

Check it out here: Guest Posting Workbook

Easton has some great advice:

How to Create Blog Content That Rewards Your Business Forever | Visionary Blogging

A Bunch of Ways to Figure Out Who On Earth Your Blog Should Be For

* Observe carefully. Pay close attention to details. Pay extra close attention to the blogs and people whose examples you want to follow. Hang onto their every pixel and word.
* Experiment. The only way to know if a seed will grow into a tree is to plant it. If it grows, it’s a good seed. If not, either it’s a bad seed or its growing conditions are too poor. Similarly, you should have the courage to try things out on your blog and in your blogging routine. If they work, keep doing them. If they don’t, stop and consider changing your approach or replacing your idea.
* Imagine the future. Think of the possibilities and probabilities involved. Should your blog become a company? Depends in part on how many gray hairs or wrinkles you think that would give you.
* Remember the past. What to write about? Well, what worked before? That’s one good approach.

I have a new post on Critical Priorities for Entrepreneurs at the Successful and Outstanding Bloggers site today:

Get Your Website Up and Running

Your website has to say “This is who we are” to the world in a way that is compelling. A great web design doesn’t have to cost a fortune. If you don’t have the HTML skills or graphic talent in-house, look for a young and hungry web designer who’s looking for a shot, as you are.

Expect to update your website regularly and improve it constantly over time. Having a website with months-old or irrelevant content is a real deal-killer. It makes your company look stagnant, at best.

Dave Navarro of Rock Your Day shares his tips for managing your days in his post “The 10 Skills of Painless Time Management”. Includes staying motivated and keeping accountable. http://www.rockyourday.com/10-time-management-skills/

Erin of Unclutterer discusses how to decide what to keep and what to throw away in her post “Tough calls and hard decisions”. Discusses the process of sorting clutter into three sections, plus the extra forth, the tough call pile. http://unclutterer.com/2009/07/30/tough-calls-and-hard-decisions/

Ian McKenzie of Ian’s Messy Desk shares “Tips For Choosing A Good Password”. Includes tips and ideas for making a password dictionary proof. http://www.ismckenzie.com/tips-for-choosing-a-good-password/

Brad S. of Gearfire shares his tips for preparing for the school year in his post “Summer – Surefire Ways to Prepare for the School Year”. Includes tips for administrative, financial, physical and mental preparation. http://www.gearfire.net/summer-ready-school-year/

Micheal Ramm of Black Belt Productivity asks the question can social networks help us get things done in his post “Can Social Networks Be Productive?”. http://blog.blackbeltproductivity.net/can-social-networks-be-productive/

Mohamad Zaki of Lesson in Life shares his “10 Simple Ways To Backup Your Life”. Includes investing in an external drive, using gmail and scanning important documents. http://lessoninlife.com/2009/07/28/10-simple-ways-to-backup-your-life/

On 28 July 2009 a company named Horizon Realty made some big news on Twitter, namely that they were suing a former tenant of one of their apartment buildings for an allegedly libelous tweet. I first noticed this news via one of the people that I follow on Twitter who pointed to a post about it at Mashable: Woman Sued for Tweet:

The Tweet, posted under the now defunct user name @abonnen, was the impetus for the libel lawsuit filed at Cook County Circuit Court, seeking $50,000 in damages. And although the Tweet and username are now deleted, accessing the account via Google ()’s cache shows it has around 20 followers. While the numbers could have dropped since deletion, it doesn’t appear the message would have travelled far. @abonnen wasn’t a particularly heavy Twitter () user, either – she posted somewhere between 1 and 5 tweets per day and often didn’t post for 2 or 3 days.

After this, things started to get out of hand. The massive crowd of early-adopters on Twitter, as always tuned in to anything Twitter-related started to spread the word (of course Mashable has over 1 million followers and nearly 300k blog subscribers…) and by mid-day “Horizon Realty” was a trending topic on Search.Twitter.com.

And other bloggers started talking about it too. In fact, my friend Sonia Simone, writing at Copyblogger has an interesting comment about it:

It’s not about what you think is fair

Horizon Realty might be the most loveable, fair, decent and true company in the world. Right now, their name recognition has about as much appeal as Saddam Hussein. With mold.

Whether fair or not, Horizon has made a worldwide name for itself virtually instantly, connecting its brand with callous disregard for its tenants, or worse.

(Yes, there is such a thing as bad publicity. This is what it looks like.)

Do social media users read all the facts carefully before flaming? Of course they don’t. Are there dozens of inaccurate accusations about Horizon flying around Twitter at the moment?

Absolutely.

Is that fair? No. Then again, filing a $50,000 lawsuit against a customer for a snarky remark made to a friend isn’t going to strike many as entirely reasonable either.

I have written about Responding to Negativity before, “You should definitely respond to negative posts. In fact, you simply must respond quickly and carefully. Say you’re sorry, offer to fix the problem, and provide contact information. ”

Of course, Horizon Realty has a bunch of lawyers and such hanging around, waiting to jump on people that get in their way (that’s how things work in Chicago), they even said “We’re a sue first, ask questions later kind of an organization.” Now that is acting stupidly.

How Should Horizon Have Handled This

They could certainly still sue the tweeter, but could have avoided a massive amount of negative press, by simply getting out in front of the issue. Instead of waiting until it was too late to issue a press release like this one, they could have (and should have) exercised a little more intelligence in dealing with the client in the first place. The client filed a suit of her own last month, which Horizon Realty believes is without merit, so I suppose this is a way of “getting back” at the former tenant.

If Horizon Realty felt that it was too late for any customer service opportunities because the tenant had moved out and filed her own suit against Horizon, perhaps a reply to the tweet, and a polite letter asking her to delete it, would have been a better way to start the process. Remember, the word-of-mouth potential here is enormous.

People who have a bad experience tend to tell more people about it than people who have a good experience. Add in an element of schadenfreude on the part of people who like to share stories like this and BAM, millions of people hear about your customer service fail.

I am not a lawyer, but it also seems to me that if you are going to file a lawsuit re: libel, perhaps you should include a little more background and information in the filing. You can read the original PDF here. They included a “definition” of Twitter and a couple of paragraphs lauding their own good standing, but nothing to affirm their claim that the “statements in the Tweet concerning plaintiff were and are wholly false“.

Seriously.

How about if point 10 had been:

10.          The defendant’s apartment was inspected on such-and-such date, 2009 by So-and-So Environmental Company of Riverwoods, IL and the apartment was found to be free of mold. A copy of the report is attached to this filing.

Of course that might have been too obvious. And I suspect that there is still more to this case than we know about. Stay tuned, we will find out if there really was any mold there…

Arif of Arif and Ali’s Blog writes about when and when not to bring up and issue in his post “Speaking Up When We Shouldn’t- an Effective Management Tip.” Discusses how to decide when an issue is worth raising with your team or employees. http://www.vakil.org/2009/07/15/speaking-up-when-we-shouldnt/

David Pierce of Gearfire shares tips for keeping organized in his post “The 3 Step Plan to Owning Your Task List”. Includes tips for keeping everything together, scheduling, reviewing and shares tools for doing all of the above. http://www.gearfire.net/3-step-plan-owning-task-list/

Ian McKenzie of Ian’s Messy Desk shares his tips for good phone habits in his post “Bad Telephone Habits to Avoid”. Includes answering the phone before the third ring, speaking with the transmitter under your chin, and losing track of someone that you have put on hold. http://www.ismckenzie.com/bad-telephone-habits-to-avoid/

Easton Ellsworth of Visionary Blogging shares tips on how to improve your blog in his post ” 5 Surefire Steps to Better Blog Content” Includes some in depth tips on how to improve your content by really delving deep into your blog and analyzing it from all angles. http://www.visionaryblogging.com/content-improvement/

Erin of Unclutterer shares tips for raising an organized child in her post ‘Teaching Time Management Skills To Children”. Includes giving children an hour to get dressed and fed every morning, no tv. an hour before bedtime and giving 15, 10, and 5 minute warnings. http://unclutterer.com/2009/07/21/teaching-time-management-skills-to-children/