A Round of Applause For AOL

[jmiller]

Now here’s an interesting trick. How do you simultaneously illustrate exactly which business practices not to do and yet remain the world’s largest Internet provider and 4th most popular search portal? Maybe it’s a combination of being fathered by Time Warner, aggressive direct CD-to-drink-coaster marketing, seduction of the pre-teen masses, AND according to the latest news, not letting anybody cancel their overpriced Internet service.


After ponying up $1.25 million in penalties to the state of New York for shady customer service actions, AOL has promised to reform the department that ignored 300 Yankee customer requests to cancel their service and stop billing.

The result of the investigation, spearheaded by New York Attorney General Eliot Spitzer, also revealed the carefully crafted architecture that allowed this snafu.

Here’s how it works. You hire a bunch of customer service reps, pay them the usual customer service rep wage, and then offer huge incentives if they can maintain a high percentage of “saves” when a customer, no doubt realizing the absurdity of a $23.90 monthly dial-up fee, calls up to cancel their service.

If the especially dissuasive reps consistently exceed their save quotas, give them huge bonuses. This method encourages them to ignore cancellation requests altogether to beef up their, most likely, pittance of a customer-service rep paycheck. Brilliant!

Nearly 2 million of AOL’s 21 million subscribers live in New York. AOL agreed to refund up to four months of service to all NY subscribers whose requests were recycle binned.