The LinkedIn Paradox: The Hunters And The Hunted

 

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How LinkedIn handles an uncomfortable coexistence may foretell the company’s future.   

There are two types of users on LinkedIn: the Hunters and the Hunted. The Hunters are the sales and marketing types, along with the recruiters and human resources crowd that use LinkedIn as a place to source customers and employees. The Hunted are actually everybody who uses LinkedIn, as everyone is a candidate for some job, some product, or some service.

This sets up a precarious tightrope that LinkedIn – and soon Microsoft – has to walk. LinkedIn needs to:

  • Sell more subscriptions to the Hunters
  • Turn more of the Hunted into Hunters
  • Get more engagement out of the Hunted,  and make them more active and attractive to the Hunters
  • And do all this without alienating the Hunted.

Let’s examine this whole idea a little more closely.

First, let’s talk about the Hunters. LinkedIn receives something like eighty percent  of its revenues from recruiters and salespeople who plumb the LinkedIn database and contact prospective employees and customers using LinkedIn.

Microsoft thinks it can ramp up LinkedIn’s sales more quickly. This was highlighted in the joint presentation CEO’s Nardella and Weiner made after the acquisition was announced:

“accelerate monetization through individual and organization subscriptions and targeted advertising”

That means more revenue from some combination of the Recruiter, Business, Sales Navigator, LinkedIn Learning (which used to be Lynda.com) and Sponsored Ad products. But the easy pickings for recruiter are likely in the past, and it’s still early days for Learning. Sponsored ads have done well, but I can’t see that as a huge source of revenue. What could be a huge source of revenue?

Sales Navigator.

When people ask me how big Sales Navigator could be I always answer with one question: what’s the ratio of sales and marketing people in your company compared to human resources people? Five to one? Ten to one? Larger than that? And currently Sales Navigator sales are less than one third of Recruiter sales. So I think it is fair to expect a huge push for more Sales Navigator subscriptions.

So LinkedIn’s biggest short term opportunity seems to be getting more Hunters.

Now , let’s talk about the Hunted. That would be, well, actually it’s everybody using LinkedIn. You may not feel like you are one of the Hunted, but you are. You are a prospect to be recruited or to be sold something, or to play a role in the purchase of something being sold by the LinkedIn Hunters. You may be a LinkedIn User but you are also part of the LinkedIn Product. Access to your profile and notifications about your LinkedIn activity are products that LinkedIn sells to recruiters and salespeople. And LinkedIn would like those profiles complete, up to date, and stuffed with information that would help the Hunters. Oh, and how about generating some activity and engagement for those social selling Sales Navigator types to latch on to? Great. Thanks.  

But one of the facts with the Hunted is that the majority of them – over three hundred million or seventy-five percent of all LinkedIn users – show up less than once a month. Those are the Hunted that LinkedIn needs to work on to get better profile data and more engagement. The flip side to this is what the Hunted want, and that is for LinkedIn to stop bugging them with so many messages, emails and InMails. LinkedIn kinda sorta admitted this when it changed Notifications around eighteen months ago in order to send less messages to LinkedIn users.

Okay, so all of this sets the stage for the Hunters and Hunted. Let’s look at one scenario to illustrate the dilemma facing Link-rosoft.

Let’s say LinkedIn succeeds in doubling the number of Sales Navigator subscriptions. The possible chain of events could go like this:

  • Sales Navigator subscriptions double, resulting in twice as many InMail messages.
  • This results in many more LinkedIn users getting mad at all those InMail messages.  
  • These irate users become disillusioned and spend less time on LinkedIn.  

In other words, the opposite to what LinkedIn wants to happen happens.

  • This makes social selling tougher – maybe the percentage of LinkedIn users that show up less than once a month starts to climb past the current 75% mark.
  • This in turn lessens the attraction of being a social seller who needs Sales Navigator.

Result: everyone – Hunter, Hunted, LinkedIn, Microsoft – loses.

Well, let’s try a related scenario: what if LinkedIn could institute more restrictions on the number of InMails and stricter penalties for failed InMail attempts (they have both of these in place now. LinkedIn could just make them tougher). This might make the Hunted feel more at ease and less harassed. But would this then make social selling less attractive to all those extra people that just bought Sales Navigator? Do those sales people then just say the heck with using LinkedIn and subscribe to the email and phone number discovery tools out there?

In this scenario LinkedIn loses both engagement and the revenue resulting from Sales Navigator subscribers leaving and switching to email discovery tools. Ouch.

Result: Hunters and LinkedIn lose.

So we have the Hunters and the Hunted living in a somewhat uneasy coexistence.

The Hunted don’t like being bothered, but overlook the fact that without the revenue from the Hunters, there would be no LinkedIn.

And the Hunters are frustrated because the Hunted don’t keep their profiles as up to date as the Hunters would like, and also that the Hunted aren’t around often enough to be contacted through LinkedIn.

Meanwhile the Hunters overlook the fact that many of the Hunted are sick of being, well, hunted.  

And that’s where we stand. This is going to be fascinating to watch play out. And we all have a front row seat.