Monetization project | LinkedIn Premium Subscription
Section 1: Product is not monetizing
About LinkedIn:
LinkedIn is a social media platform that is business and employment focused.
It was launched on May 5, 2003 by Reid Hoffman and Eric Ly. Since December 2016, LinkedIn has been a wholly owned subsidiary of Microsoft. The platform is primarily used for professional networking and career development, and allows jobseekers to post their CVs, search for jobs, post content and employers to post jobs. From 2015, most of the company's revenue came from selling access to information about its members to recruiters and sales professionals
LinkedIn has more than 1 billion registered members from over 200 countries and territories.
LinkedIn's Vision : Create economic opportunity for every member of the global workforce.
Mission: To connect the world’s professionals to make them more productive and successful.
Current CEO: Ryan Roslansky
Global Revenue: 16.37 B USD (as of 2022)
Availability : Mobile app and Web Browser (Desktop Version)
Type: Social Media
Core Value Proposition:
- Being a marketplace where professionals can search, apply and interact with organizations.
- Being a social media networking platform for professionals and help organizations scale
For the purpose of this project we are using LinkedIn's premium subscription - LinkedIn Premium
These are the various LinkedIn subscription plans available
Based on the latest information until 2023, here’s a rough estimate of each plan’s monthly subscription cost:
- Premium Career: ₹1,499 pm
- Premium Business: ₹ 2,308 pm
- Premium Sales Navigator: ₹6,500 pm
- Premium Recruiter Lite: ₹9,000 pm
Lets go about defining ICPs for LinkedIn (We are only looking at B2C for this project)
Elements | ICP1 | ICP2 | ICP3 |
|---|---|---|---|
Usage Characteristics for LinkedIn | For Showcasing profile | Profile + Networking | Sharing news and posts on LinkedIn |
Usage Characteristics for LinkedIn Premium | Using to send Inmails, requests to people outside network primarily for job hunting | Using for building network | Using to showcase credibility + trust in profile+ drive engagement |
Gender | M/F | M/F | M/F |
Age | <25 | 25-40 | >40 |
Current City | Tier 1 & Tier 2 | Tier 1 & Tier 2 | Tier 1, Tier 2 , Tier 3 |
Occupation | Young Professional | Mid Career Professional | Senior Professional |
Source of Money | Self, Parents | Self | Self |
Lives with | Parents or in a shared accommodation | Spouse and/or with family- young kids | With family - teenage kids |
Used Social Media | Youtube, Instagram, Snapchat, WA | Netflix, Instagram, Amazon prime, Quora etc | FB, Whatsapp, youtube, Amazon, Streaming online content- Hotstar, Sony Liv etc |
Passionate topics | Searching for job, interviewing tips, profile relevant skills | Sector oriented posts, Career growth discussions | Life lessons, learnings |
Recency of use case | Low (in case of premium plan) | High | High |
Monetary/AOV/Revenue Generated | Low (in case of premium plan) | High | High |
What plan do they prefer? | Will only try free trial for a month | Premium Career/Business/Sales Navigator | Premium Business |
Level of Engagement | Low | High | High |
What alternatives do they have | Glassdoor/Naukri/ IIM jobs/ Websites | Twitter/Fishbowl/Career blogs/Forums | Self blogs/forums |
Reasons to leave LinkedIn | Nil | Nil | Nil |
How do LinkedIn Users experience the core value prop?
- By receiving and sending connection requests
- By messaging current connections
- By engaging with organizations/personas posts- comments, likes, following relevant pages
- By applying for jobs on the platform
- By searching for jobs on the platform
- By completing their profile and keeping it up to date
- By signing up for a free trial for Premium
Lithmus Test
- Retention Curve-
- 16.2% of LinkedIn Users are Active Daily
- About 134.5 million users actively use LinkedIn each day.
- Additionally, over 48.5% are active monthly.
- 2022, LinkedIn Saw a 22% Increase in Engagement
- It is estimated that there were 175.5 million premium users on the platform in 2023, up from around 154.4 million in 2022.
- Deeper Engagement-
- LinkedIn is unique because it is a social media for professionals and its lack of competitors in its space (B2B, B2C)- Fishbowl/Glassdoor/Reddit/facebook are all competitors but do not have the same unique offering as that of LinkedIn.
- The Number of Job Applications Submitted Per Minute on LinkedIn is Approximately 90.
- About 50 Million People Use LinkedIn to Job Hunt Weekly.
- On Average, Eight People Get Employed Per Minute on LinkedIn.
- It is estimated that there were 175.5 million premium users on the platform in 2023, up from around 154.4 million in 2022 (Statista).
- The LinkedIn Application has a Daily User Access Rate of 16.2% and a Monthly User Access Rate of 48.5%.
Type | Activity |
Power (20%) |
|
Core (49%) |
|
Casual (40%) |
|
- Willingness to Pay
Casual | Core | Power | |
How much would you pay for the premium subscription monthly? | <INR 500 | INR 500-800 | >INR 800 |
Would you pay for this just once or on a recurring basis? | When I need- such as for job hunting or network, happy to discontinue and not pay for periods of time. | Happy to renew on a recurring basis, appreciate the annual discount. |
|
What would make you pay more? | Career upskilling and profile optimization resources |
|
|
We already know LinkedIn is monetizing, we can the Litmus test to double check once more- LinkedIn passes all three criteria .
We also know LinkedIn is a highly successful business monetizing at scale.
Section 2: Product is Monetizing
Experiment 1:
Highlighting premium features and giving an option to try some of the features of premium without signing up for premium.
Reasoning- This will engage users who would like to try premium but don't want the hassle of free signups, giving payment details, will build trust and will be on a no commitment basis
Channels- In app notifications, Email Marketing
Experiment 2:
Engage in a LinkedIn roulette where in every new user signing up for premium - will get a chance to win another month of free premium.
Reasoning- Will drive user signups and engagement.
Channels- Email marketing, Social Media, In app notifications.
Experiment 3:
Give an option to upgrade or downgrade the premium services one level up and down in a 6 month period for Core and Power Users.
Reasoning: This will build loyalty and trust in power users and they can freely explore other plans - having to pay for only 6 months instead of a yearly plan
Channels- Email and in app notifications.
Section 3: Substitute pricing
What are customers paying LinkedIn for?
Customers are paying LinkedIn to build, maintain and nurture their professional profile and their network. It is a free model to sign up and use.
LinkedIn's freemium model is sufficient for users early on their career.
Users are paying LinkedIn for
- Building and maintaining a professional network
- Check out job posts
- Apply directly on LinkedIn through easy apply
- Follow company pages and interact
- Consume content on LinkedIn
- Access learning resources
- Find potential business partners/talent
What does the product stand out for?
LinkedIn stands out as being a combination of social media in the form of a professional network. This is something unique and not offered by any other platform currently.
Competitors:
LinkedIn has some competitors in the Social media and Professional Recruitment space
Element | IIM Jobs | Naukri | Glassdoor/Fishbowl | Instagram/Twitter (X) | |
|---|---|---|---|---|---|
Primary Use Case | Social Media and Professional Platform | Online Portal where employers and job seekers connect | Online Portal where employers and job seekers connect | Online Portal where employees leave review about organizations/roles- | Social media |
Standalone or Suite | Suite | Suite | Suite | Standalone | Standalone |
Pricing | Freemium, base paid version starting at INR 5998 annualy | INR 1500 for 6 months plan | INR 3000 for base version | Freemium (one has to signin with a professional email to view in detail) | Freemium (monetized via ads) |
One time purchase available | Yes | Yes | Yes | NA | NA |
Primary department | Professional Social Media | Recruitment Portal | Recruitment Portal | Rating portal | Social Media |
Core use | B2B, B2C | Hiring Managers and Job Seekers | Hiring Managers and Job Seekers | Professionals | Everyone |
Competition with LinkedIn | NA | Direct Competitor | Direct Competitor | Indirect Competitor | Indirect Competitor |
Website / Mobile App / Desktop App | Website, Mobile App | Website, Mobile App | Website, Mobile App | Website, Mobile App | Both |
Bundle Offerings | Yes | Yes | Yes | No | No |
ROI to Build Network | Very High | Nil | Nil | Nil | High |
Section 4: Monetization Design
Answered in subsequent Sections 5, 6, 7, 8, 9
Section 5: Whom to Charge
Who to charge?
From the RFM model we need to charge these these three categories of users-
- Loyal Customers- They use LinkedIn very frequently and their perceived value is very high. This is a good base and we need to convert them into paid users
- Champions- Essential to convert to paid users as perceived value is very high
- Potential Loyalists- We need to try and convert them to Loyalists and Champion buckets
Section 6: When to Charge
This is the customer journey on LinkedIn
Day 1-7
- Completion of signup and profile updated to 25%
- Exploring the app
Day 7-14
- Profile completed >50%
- Exploring connections and sending and receiving connection requests.
- Gets an notification that search limit exhausted for the day
Day 14-21
- Adds upto 200 connections
- Joins groups related to uni and work
- Sends messages
- Exhausts inmails, viewing connections outside of 2nd/3rd degree
After Day 21, this is the inflection point where the perceived value is greater than pricing
The user then signs up for 1 month of free trial of premium
Section 7: What to charge for
LinkedIn's freemium model allows a user to
- Create a profile
- Search for connections to a limited extend
- Message people to a limited extend
- Add connections upto a limit
- Building a network (limited)
However to truly extract value from the platform, users need to convert into paid users, so LinkedIn is charging for ACCESS and OUTPUT.
LinkedIn will prompt you that you can message/send Inmails x no of people per month based on your premium plan.
The platform gets a user hooked to the platform, understands its benefits and then gently nudges them to become a core and a power user.
Section 8 How much to charge?
Currently as per my research through user calls, most users consider LinkedIn as expensive
Considering LinkedIn will not change the pricing as the annual pricing is discounted, it can consider the following strategies
- Have a monthly discounted pricing for 1st time premium users
- It can have the career plan in the middle
- It can put testimonials of users
- And it can slash pricing (giving a discount on 5% for monthly prices)
Based on the research (user insights) LinkedIn can charge the following-
- Monthly INR 800 for first 6 months of trial for first time users
- Discounted rate of 15% for multi year renewal for Core and Power Users
Section 8 How much to charge?
Currently as per my research through user calls, most users consider LinkedIn as expensive
Considering LinkedIn will not change the pricing as the annual pricing is discounted, it can consider the following strategies
- Have a monthly discounted pricing for 1st time premium users
- And it can slash pricing (giving a discount on 5% for monthly prices)- for first time users
This is the suggested pricing for the first 6 months for a paid user--
- Premium - INR 1000 pm (for first time users)
- Business - INR 1800 pm (for first time users)
Only recommending premium and business plans as they would be the first plans paid users would sign up for.
Section 9 Pricing Page
- This is the current pricing page of LinkedIn
- LinkedIn can do the following on the pricing page-
- They can put testimonials of users
- They can use slash prices
- It can have the career plan in the middle- as a decoy effect
- System 1 vs System 2
- For first time users, the onboarding needs to be simple
- But for premium users - this is an expensive subscription and they would like the information so it would need to be System 2.
- This is ensure they are making an informed decision, and build trust in LinkedIn.
- This is why SYSTEM 2 should be the landing page for Premium
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