For most college students today, America Online was the Internet provider of the 1990s – it was simple, cool and popular. With chat rooms, buddy lists, games and Web surfing, AOL seemed to provide everything an average computer user needed for a technological fix. Even Meg Ryan and Tom Hanks were able to relive their Sleepless in Seattle glory days in the 1998 film You’ve Got Mail, complete with the familiar AOL sound bite.
But AOL’s glory days are a fact of the past. Once deemed the most user-friendly Internet service provider (ISP), AOL’s reputation is too tarnished to maintain its mogul status. Plans to eliminate 20 percent of its global taskforce are the latest proof that AOL is paying for its past customer manipulation.
In 1996, AOL switched from charging subscribers by the hour to a flat monthly rate of $19.99. This appealing price for a popular and seemingly high quality service boosted the user base to well over 10 million people. The dial-up traffic that resulted, though, left many unhappy AOL users.
When customers attempted to cancel accounts, many had trouble doing so. After AOL subscriber Vincent Ferrari documented his attempts to cancel his account and publicized his difficulties on CNBC, the entire exploitative AOL retention
manual was posted online in 2006, paired with an unconvincing public apology from the corporation. This event exposed the incentives for customer service personnel to “save” customers, often against the subscribers’ consent. Bonuses to employees who met retention quotas equated to tens of thousands of dollars.
The billing disputes that followed the subscriber exodus weren’t the only shadows over AOL’s reputation. Before the switch from an hourly rate, AOL was brought to court for rounding up the calculations of minutes used without proper billing notification. The underhanded attempt to squeeze money from subscribers served only to lose loyal customers.
Prior to that, AOL’s release of version 5.0 in 2000 led to an influx of customer complaints that the software was not compatible with their third-party service provider. This was about the time I said goodbye to my AOL account because the company was charging subscribers twice the $19.99 monthly rate – once for Internet access and once for broadband connection.
From there, I became a happy BellSouth ISP user with all the perks of keeping my virtual social life, thanks to AOL’s free AOL Instant Messenger, commonly known by its acronym, AIM. If I could keep my precious screen name at no cost, I reasoned, why should I pay $40 a month?
I shouldn’t, and I didn’t.
Apparently, other users caught on to the wiles of the corporation and shared my way of thinking.
The year 2006 proved pivotal in the downfall of the Internet giant. AOL boasted only 10.9 million paying U.S. subscribers, a 60 percent decrease from its peak of 26.7 million in 2002. The company also officially changed its name from “America Online” to “AOL,” probably because by January 2007, the last American call center closed its doors in Oklahoma City. All customer service calls are now outsourced – primarily in India, Argentina and the Philippines. AOL also began to offer free e-mail accounts and software that was previously privy to paying subscribers.
After eliminating or outsourcing 5,000 positions two weeks before Christmas in 2006, AOL announced its strategy to shift its focus to ad-supported Web sites in hopes of deflecting attention from similar providers like Yahoo!, Microsoft and Google.
A lesson that any powerful corporation can learn from AOL’s mistakes is not to abuse a large customer base through underhanded attempts to increase profits. Customers should be rewarded for company loyalty, not discredited and assumed to be ignorant of improper customer service.
Jaclyln DeVore is a junior majoring in masscommunications.