LinkedIn: Musings on $LNKD

On LinkedIn’s Q1 earnings call yesterday, the firm boasted that their Sales Solutions products grew revenue 55% year-over-year with sales products now constituting 40% of Premium Subscription divisional revenues.  Thus, LinkedIn Sales Navigator revenues were around $60 million last quarter.  This is an impressive number given the short period of time the product has been available.  It also suggests that Sales Navigator is by far the largest Sales Intelligence product on the market.

The funny thing is, when I talk to other vendors in the Sales Intelligence space, LinkedIn remains low on their competitive threat list.  They simply aren’t seeing them much as competitors.  Perhaps their customers are licensing both Sales Navigator and their solutions, but I’m not sure about that.  Doing so would be an expensive proposition.

This is a square I have yet to circle.

LinkedIn, which laid an egg last quarter after announcing much more conservative guidance than the analysts expected, raised its full year guidance by two percentage points and had beats on earnings and revenue.  The market obviously overreacted to its lower than expected FY 2016 revenue guidance on the Q4 call, but LinkedIn generally guides low.  The problem with hyper-growth stocks is the moment the growth trajectory slows, the expected revenues and future cash flows decline by a compounded factor.  Thus, several years of stock price growth can be wiped out overnight.  There is a reason analysts often say these stocks are “priced to perfection.”

LinkedIn announced a set of small-ball enhancements to its Sales Navigator service in Q1.  The firm mentioned some improvements to their CRM connectors on the earnings call, but didn’t provide any details.  There were some non-discussed features that were covered on a SlideShare presentation a few days ago.

The best new Sales Navigator feature is a set of Spotlight filters for prospecting.  These LinkedIn-specific filters appear at the top of the results page.  Navigator users can now screen for executives and managers who have

  • Shared experiences (e.g. groups, education, companies, etc.) with the sales rep
  • Changed jobs (company or title) in the past ninety days
  • Posted on LinkedIn in the past thirty days
Sales Navigator's new Spotlight filters leverage member intelligence to identify contacts more likely to respond to your InMail.
Sales Navigator’s new Spotlight filters leverage member intelligence to identify contacts more likely to respond to your InMail.

These Spotlight filters help identify individuals who are more likely to respond to InMails due to similar affinities, job changes, or active LinkedIn participation.  Spotlight filters, like TeamLink, are a good example of the firm leveraging its unique content sets to provide value added Solution Selling features instead of taking a me-too approach.

LinkedIn added five other new filters to their side panel of selects including “Leads that Follow Your Company on LinkedIn.”  This filter lends itself to strong messaging concerning displayed interest in your company (e.g. “I see that you follow us on LinkedIn.  How did you hear about us?”).

The other new filters are “Exclude my Saved Leads,” “Years in Current Position,” “Years at Current Company,” and “Company Type” (e.g. Private, Public, Partnership, Educational, Nonprofit, Government Agency, Self-Owned, and Self-Employed).

Other enhancements include multi-ZIP screening, notifying the user when a lead views his or her profile, and shifting Navigator accounts to different contracts.  All of these are welcome feature additions, but small-ball upgrades unlikely to grow the business.

Navigator added an update message that flags leads who have recently viewed user profiles.
Navigator added an update message that flags leads who have recently viewed your profile.

And contract shifting is potentially problematic.  If a sales rep joins a company, the firm can invoice the employer instead of the rep (good).  However, if a rep leaves the firm, he or she can assume the contract for their account (potentially very bad).  Thus, a sales rep can maintain a digital rolodex of leads and customers within Sales Navigator and take it to his or her next employer.  The sales rep would be delighted by this opportunity, but the former employer is potentially making it easier for a rep to walk across the street to a competitor with their book of business.

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