Here’s How LinkedIn Is Strengthening Its Sales Offering

by Trefis Team
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LinkedIn
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Recently, LinkedIn (NASDAQ:LNKD) acquired PointDrive, a Chicago-based start-up which has a technology allowing sales professionals to share visual content with prospective clients, thus building better relationships.  The company plans to integrate PointDrive’s technology into its sales solutions portfolio to better position LinkedIn as a platform where sales professionals can engage with clients.  This acquisition comes on the back of LinkedIn’s enhancements to its Sales Navigator tool, where the company included CRM sync, Gmail extension and new discovery features on the Sales Navigator mobile app. Once  LinkedIn becomes a part of Microsoft (after the pending acquisition), an increased focus on its sales tools can enable the company to tap into the growing trend of social selling.  The enhancement of its sales products can drive revenues for its Premium Subscription segment, where Sales Navigator is the fastest growing component.

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Tapping Into The Potential Of Social Selling

LinkedIn’s Sales Navigator tool helps sales professionals to target the right buyers and companies through its huge database and data-derived insights. This tool is aimed at “social selling”, which is being touted as the future of new business.  Estimates suggest that social networking takes up nearly a quarter of all time spent online and reaches more than 75% of all internet users. Social selling is therefore being considered as a powerful tool to reach and engage clients. LinkedIn is clearly looking to tap into this potential with its huge database of professionals and companies to allow sales professionals to reach the right set of clients and engage them effectively. Sales Navigator, which was launched in 2014, is now being deeply integrated with CRM data to ensure that relevant accounts are automatically imported from a user’s system, thus eliminating the need to manually do so. The Gmail extension will allow users to engage with their Sales Navigator insights inside of the Gmail experience just like they are communicating with their contacts. With 25% of its users using only the Sales Navigator mobile app, the company introduced a new discovery feature on its mobile app which will make it easier to find new accounts and leads. With a goal to help sales professionals to build deeper relationships by working smarter not harder, LinkedIn is strengthening its sales tool.

As per our estimates, Premium Subscriptions account for nearly 15% of LinkedIn’s valuation and Sales Navigator is an important part of this segment.  We expect the company’s average annual subscription revenue per registered member to increase from $ 1.46 in 2016 to $ 1.95 by the end of our forecast period.

A more robust Sales Navigator tool can attract more sales professionals to register and pay for premium membership, which in turn will foster higher revenue growth.  This in turn will drive increases in revenues, impacting LinkedIn’s valuation positively and benefitting Microsoft in the long term.

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