The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue by Robbie Kellman Baxter

Author:Robbie Kellman Baxter
Language: eng
Format: mobi, epub
Publisher: McGraw-Hill Education
Published: 2015-03-19T22:00:00+00:00

LinkedIn: Using Freemium to Avoid the Chicken-and-Egg Problem

As of August 2014, LinkedIn, the professional networking site, had over 300 million users in over 200 countries and territories around the world.4 Nine years earlier, LinkedIn had only about a half-million users. How does a new community grow like that at the same time that professional associations are lamenting declining membership and engagement among virtually all industry and functional associations?

The engine that drives LinkedIn’s success is the freemium model. By welcoming everyone to use LinkedIn to store and share professional credentials and connect with the network, LinkedIn provides tremendous ongoing free value—a requirement for the freemium offer.

Even without the community and social network elements of the LinkedIn model, a critical mass of members found value from day one at LinkedIn, just in having an easy way to create a professional profile online. Over time, the network effect created by the broad participation of professionals increased the value of the community, as a means of keeping current status and contact information for one’s network. It also made the premium memberships worth purchasing for a significant subset of members.

The vast majority of LinkedIn’s existing network of professionals has never paid a thing for membership. However, it’s the existence of this community that attracts the broad range of members. Certain groups of professionals—recruiters, marketers, and salespeople—needed additional services, and LinkedIn introduced tiered pricing and services to accommodate these needs. A subset of users upgraded to use the service more efficiently and to take advantage of the growing network.

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