When you change your business model, make sure you take your customers with you. Just assuming loyalty and the power of incumbency can be terminal. The evidence to this is long: Kodak, Blockbuster, and more recently, Blackberry, amongst a very long list.
A few customers will hang around, even to the death, but most will walk just as soon as a viable alternative emerges, and in the meantime probably think you have overindulged in happy-juice, and think way less of you for it.
Not many would see this as a good outcome in the challenge to build and leverage a brand.
LinkedIn has been a great success, making its founders billionaires, early investors multi millionaires, and enabling business connection and networking in ways unimaginable just half my working life ago.
The freemium model they used worked well, it gave significant levels of usage for free, which hooked in a huge, professional user base.
You did get a lot for no financial cost, but in exchange, you did give them a lot of information.
Your personal details, work history, interests, location, affiliations and networks, and a lot more, all of which should have been an advertising bonanza, and if I asked for it when interviewing face to face in Australia, I would be breaking the law.
This information is the quid pro quo for the use of the platform, and unless you are really stupid, you know that it will be used to sell access to that information to anyone with the money, who wants to reach you.
Nobody would seriously argue that this was not the case.
Facebook has made a huge success of advertising to finely defined audiences based on the personal information given in return for access to the platform. That LinkedIn failed to do the same, with the significant added value that could be accessed via the subscription versions, is their marketing failure, not evidence that there was not an opportunity waiting to be grabbed.
Anyway, at some point, some of the users of the free version needed to go a bit deeper, to be able to search in a more targeted manner, so they happily upgraded to one of the premium packages. While the subscription revenue may have been under what it could have been, LinkedIn seemed never to really set out to market the benefits aggressively to their user base, all they did was offer a months free access to the premium version.
As LinkedIn seeks to generate revenue by annoying its users, Facebook jumps into the markets to date dominated by LinkedIn and offers similar services to its huge user base. Serious competition? Not too the differentiated Linkedin, but perhaps now it is.
I was a constant advocate of LinkedIn, and strongly encouraged and coached all those I worked with started to use it, some migrating to the subscription services. That advocacy is now gone, and I am sure that I am not the only one.
How long before the first cat photo turns up? Perhaps it already has, further blurring the differentiation LinkedIn used to have to Facebook and other social platforms.
I get that Microsoft needed to create a return on their $26 billion investment, but ignoring your market is a pretty stupid way to go about it.
Perhaps the new bloke who has admittedly made some pretty smart moves since he took over from Steve Ballmer, should have rung Jeff Bezos at Amazon who may have reminded him that Amazon keeps an empty chair at every meeting as a constant reminder that they are there to serve customers, not the other way around. Do that successfully, and you will make money, fail to do it, and the bell will eventually ring.
The upside for the few really effective marketers out there is that a really effective automated toolbox has been removed from the wannebe’s, so creative, differentiated, focused and truly customer-centric marketers will have more oxygen.