5 things LinkedIn could have done to retain share value
Silicon Valley-based LinkedIn’s shares closed down 43.6 percent at $108.38 on Friday, after hitting a three-year low, following a sales forecast well short of analysts’ expectations (source Reuters.com)
Barclays analyst Paul Vogel said he was not surprised by the sharp reaction in LinkedIn stock. “It is definitely a lot harder not to wonder if the company is starting to hit saturation levels with certain users or enterprises,” he said in a note to clients (source The South Africa Technology News)
As a Premium Account LinkedIn user, I have a good understanding of how LinkedIn users are able to derive value from the platform, so I do not mind paying my monthly subscription. The problem for LinkedIn is that their predicted sales forecast was based on the assumption that their value proposition was understood by the majority of their users but this obviously was not the case.
I have listed five things LinkedIn could have done to avoid its sharp decline in share value.
1. Purge dormant and fake accounts
Regular LinkedIn users will concur that there is a high percentage of dormant and fake users on LinkedIn that should have been purged ages ago. Dormant accounts do not purchase LinkedIn products and fake accounts steal LinkedIn user information. If LinkedIn had done a better job at purging these accounts, their reported user numbers would have been more realistic.
2. Understand user requirements better
If you want to upsell your existing users, you have to understand them way better. There are numerous ways that LinkedIn could have engaged with active users, asking questions, polling them regularly to understand their requirements and personal challenges. By being more reactive with the information they gleaned, they could have been more proactive in providing valuable feedback to users, based on their findings, displaying that they care.
3. Develop regional LinkedIn training network
There are many companies selling LinkedIn training, which is absolutely vital if you want to develop informed users. Informed users understand the LinkedIn platform and the features and functions (which they need to pay for) that add value. To date, LinkedIn does not endorse (as far as I know) any LinkedIn training advisers and there is no LinkedIn certification available which is endorsed (as far as I know) by LinkedIn. With a properly managed regional LinkedIn sales training partner network, more users would have been trained and purchased upgrades.
4. Develop a referral programme
There are millions of LinkedIn users using the platform regularly, who are potential brand advocates. By establishing a referral programme, existing users would be encouraging their connections to upgrade, for the right reasons of course.
5. Make the platform more attractive
I have participated in many forums, where existing users have discussed all the functional short falls of the platform. If LinkedIn had listened to their users and resolved these problems, they would have made a lot of users happy and they in turn will have possibly shared this positive information with their networks. LinkedIn has a long way to go in terms of the analytics they provide and the user experience is still pretty “clunky” in places.
This is my take on the current situation. What are your views and thoughts?
Image: smi23le via LinkedIn.