Chapter 1 Understanding Digital and Social Media Marketing Concepts

Case Study Chapter 1: XINGA successful professional social network in Europe

Overview

XING is a successful example of a professional social media business network. The company was founded in November 2003 by L.Hinrich in Hamburg, Germany, but at that time it was called Open Business Club (openBC). By the end of 2003 the platform was launched in German and English and the first special interest group was set up. The company’s capitalization during the IPO ( Initial public offering) in 2005 was nearly 20 million euros and reached 55 million euros by 2010. According to Statista, in 2014 XING had 14 million members. The buyer personas of most of the users represented German-speaking countries (Germany, Austria and Switzerland) and they were using XING to boost their business, jobs and careers.

The Aims of XING are to:

● expand the platform ● develop new services

Implementation

By the end of 2004 openBC was accessible in eleven languages (Spanish, French, Portuguese, Japanese, Finnish, Dutch, Swedish, Chinese and Hungarian). At the beginning of 2005 there were sixteen languages. In 2004 openBC consisted of more than 500,000 members, and claimed to be the largest social network for professionals in Europe (Runge, 2014).

Source: Heinze, A., Fletcher, G., Rashid, T., & Cruz, A. (Eds.). (2017). Digital and Social Media Marketing: A Results-Driven Approach. Routledge. Accessible online http://mastersindigitalmarketing.org/book/ #passion4digital This work is licensed under a Creative Commons Attribution 4.0 International License.

In December 2006, Open Business Club AG was the first Web 2.0 company to go public, floating in the Prime Standard segment of the Frankfurt Stock Exchange. It changed its name and became XING for the IPO (Faber Novel, 2007).

XING’s primary target market is D - A - CH region - German-speaking region (Germany, Austria and Switzerland).

XING always strived to become the number one business network in Europe for professionals. Such a position is also very attractive for companies and recruiting specialists. The service offered for users was twofold:

● Free membership - enables members to access limited profiles of the other members, invite other users to join their network, make basic searches, receive private messages, join groups, organize one meeting per month, research job offers.

● Premium membership - enables members to receive and send private messages, carry out advanced searches, post job offers, organize unlimited meeting and conferences, check which members have looked at their profiles and have access to the “premium world”.

Three options are available for businesses – e-recruiting, advertising and company profile. Companies can also promote the information related to different events.

According Faber Novel (2007), the XING business model was successful through the implementation of several aspects:

● Leveraging economy of scale - XING used viral marketing techniques having used existing and new members as marketing agents in order to increase members and the premium members base.

● Attracting new members - XING attracted new premium members. Existing members can easily expand their own network through simple tools. Members were encouraged to do this through an offer of one month’s free subscription to each new member subscribing to the premium option.

● Monetizing user’s base - this was achieved through several levers: the adaptation of local specificities; clear and readable offer for users; discreet and efficient advertising; specific offers for premium members and services of high quality.

XING made several acquisitions:

● In December 2010, XING acquired Amiando AG, a Munich-based company and Europe’s leading provider of online event management and ticketing.

● In January 2013, XING acquired Kununu GmbH, the leading platform for employer reviews in German-speaking countries.

Results

Source: Heinze, A., Fletcher, G., Rashid, T., & Cruz, A. (Eds.). (2017). Digital and Social Media Marketing: A Results-Driven Approach. Routledge. Accessible online http://mastersindigitalmarketing.org/book/ #passion4digital This work is licensed under a Creative Commons Attribution 4.0 International License.

XING was the first Web 2.0 company to go public in Europe in 2006 and raised 35,7 million euros. The company’s capitalization during the IPO was nearly 20 million euros (2005) and reached 55 million euros in 2010. According to Statista, in 2015 XING generated a revenue of 122.9 million euros, up from 101.37 million euros in the previous year and in 2016 XING had over 15 million members. Most of the users were from German-speaking countries (about 8.7 million) and were using XING to boost their business, job, and career (XING, 2016). Currently the company employs around 500 people.

However, the greatest challenge for XING is globalization. The increasing mobility and travel of business people striving for global reach for their business networks, means that companies such as LinkedIn are becoming more useful.

According to Oğuz Alp Tan of social world trips (http://www.socialworldtips.com/):

“For small to medium-sized companies, as well as for job seekers in the German-speaking area, XING is very well suited.”

Further Information

1. https://recruiting.xing.com/en/facts-and-figures/ 2. https://recruiting.xing.com/uploads/downloads/

150824_XING_ImageBroschu__re_EN_01.pdf 3. https://www.youtube.com/user/XINGcom 4. https://plus.google.com/+XING/posts 5. http://mashable.com/2008/02/19/XING-growth-2007/#ifVnt.hPHEqW 6. http://techcrunch.com/2012/06/14/business-focused-social-network-XING-announces-

dividend-of-e0-56-per-share-total-payout-around-e3-million/7. http://techcrunch.com/2013/01/09/linkedin-competitor-XING-buys-glassdoor-like-startup-

kununu-for-12-3m-but-will-it-fair-well/8. http://www.exasol.com/fileadmin/content-de/pdf/Success_Stories_Kunden/

CSXINGEN0611B.pdf9. http://etm.entechnon.kit.edu/downloads/XING_AG.pdf 10. https://www.crunchbase.com/organization/XING#/entity 11. https://www.cleverism.com/using-XING-de-business-purposes/ 12. Runge,W. (2014) Technology Entrepreneurship: A Treatise on Entrepreneurs and

Entrepreneurship for and in Technology Ventures. Vol. 1.

Discussion questions

1. Discuss the level at which XING is on the DIgital Business Maturity Model.

Source: Heinze, A., Fletcher, G., Rashid, T., & Cruz, A. (Eds.). (2017). Digital and Social Media Marketing: A Results-Driven Approach. Routledge. Accessible online http://mastersindigitalmarketing.org/book/ #passion4digital This work is licensed under a Creative Commons Attribution 4.0 International License.

2. Why was XING’s business model was successful? 3. What advantages did XING gain by acquiring leading event management and review

management companies? 4. Describe the possible Buyer Personas for XING. 5. Why might the services offered by XING be of interest to English speaking countries? 6. In your opinion, what are the key revenue sources of XING?

Class activities1. In groups, research how the digital economy is likely to change and what impact this could have

on small and medium size businesses. 2. Applying the Ansoff’s Matrix discussed in Chapter 1, what new services might be interest to

professionals and business on XING?

Source: Heinze, A., Fletcher, G., Rashid, T., & Cruz, A. (Eds.). (2017). Digital and Social Media Marketing: A Results-Driven Approach. Routledge. Accessible online http://mastersindigitalmarketing.org/book/ #passion4digital This work is licensed under a Creative Commons Attribution 4.0 International License.