Every couple of months, the investment analysts at MKM Partners do a survey of Twitter users to find out how they like it. This month, the news is not good, according to MKM’s Rob Sanderson:
Our research shows that 40-50% of inactive users have tried a few times and quit.
Twitter has had a longstanding problem with people who try the app and then don’t come back. More than 741 million people have signed up for Twitter and then abandoned it. In Q3 2014, Twitter reported 284 million monthly active users (MAUs). Its user base is growing, but not fast enough to juice the stock. TWTR is currently trading at roughly half its all-time high of $US66 per share.
On Feb 5, CEO Dick Costolo will report Twitter’s Q4 2014 earnings, and analysts will be hoping he has solved the Twitter MAU problem. The company has been pushing to make Twitter easier to use, especially for new users.
MKM’s data shows that may be working. Back in May 2014, more than 45% of users who quit had actually “tried it a few times and quit.” That’s an astonishing number — it suggests that even people who were determined to become Twitter users found the experience so annoying they walked away.
More recently, however, MKM’s survey shows that only 38% of people who quit did so after multiple tries. Somehow, Twitter’s on-boarding experience may have become better. Here’s the chart:
“Tightening down a very high attrition rate to something less extreme would drive acceleration in net user growth. We think this will happen in 2015,” Sanderson concludes. So while that headline stat may be alarming, it’s actually a good trend for Twitter.
Disclosure: The author owns Twitter stock.