60% of AOL's Profits Come From Misinformed Customers 301
satuon writes "Ken Auletta's big New Yorker piece on AOL (subscription only) this week revealed an interesting detail about the company's inner workings. According to Auletta, 80% of AOL's profits come from subscribers, and 75% of those subscribers are paying for something they don't actually need. According to Auletta: "The company still gets eighty percent of its profits from subscribers, many of whom are older people who have cable or DSL service but don't realize that they need not pay an additional twenty-five dollars a month to get online and check their e-mail. 'The dirty little secret,' a former AOL executive says, 'is that seventy-five percent of the people who subscribe to AOL's dial-up service don't need it.'"
My grandmother is one of them... (Score:5, Interesting)
Who are the other two? And particularly the person who actually NEEDS AOL?
We've tried, and she actually understands. But she's hooked on the "experience". Maybe she just likes some disembodied voice telling her that her internet is up or down.
Well, maybe it will go away once she starts using a smartphone and starts uploading all her stuff into the cloud. That doesn't seem like a very compelling argument we have to make to her, though.
People are creatures of habit (Score:4, Interesting)
It took me YEARS to wean most of my AOL using friends/relatives off of AOL. Once something winds up getting "automatically charged" on their credit card every month, a lot of folks are just too lazy to change. None of them were using any of AOL's "value added services" and it was just an email application for them. Most of them already had high speed internet from their cable company or a telco DSL line already. They're all using gmail now.
Re:My grandmother is one of them... (Score:5, Interesting)
Some people live in the boonies and can only get dial-up. Wireless ISPs are moving in to many places now, though. I have relatives that live in the middle of nowhere and have internet options now that are at least as fast as I do in the big city.
Where are the lawyers? (Score:3, Interesting)
Sounds like a class action lawsuit to me.
No, I'm being serious. This is an abusive business practice. In financial circles, similar actions to intentionally mislead clients, especially elderly ones, especially by omission of whether a particular service is needed or not, is a very big deal and results in loss of license to the sales agent and potentially punitive action by the SEC to the employing firm. The scales of money are different, but the sleazy flavor is the same.
Re:Debunked (Score:5, Interesting)
doesn't surprise me in the least (Score:5, Interesting)
seventy-five percent of the people who subscribe to AOL's dial-up service don't need it.
Many dozens of times I've seen customers come in that are using AOL with their DSL. I don't see it so much with cable because the majority of people using AOL are using it because cable isn't available to them, they're too far from the city, but DSL is available and they've had it for years. Many of them signed up for their DSL (service by Qwest, formerly AT&T) through AOL and don't even realize it's not AOL providing it.
So I ask them why they are still using AOL, and it quickly becomes apparent that they believe that AOL is the internet. I'm able to reason with some of them, but even a percentage of those still want to keep AOL because they're comfortable with it. Me personally, having to change my email address would be the big problem. But last I checked, AOL reduces your charges down to something like $9.99/month if you just want to keep email and not have the rest of their service such as dial-up. But even when I explain this to them, many are just not interested in it. Many years ago when I quit my dialup, I switched to my isp's "email only" plan for that same amount and kept it for about 6 months, and it made the transition to cable a lot smoother for me.
I try to explain it to them, how using a local email app on your computer makes things like managing attachments so much easier, but a lot of these people just aren't interested in anything making their computer use unfamiliar again even if only for a brief time. They're in their secure zone and don't want to leave. Only just this year I finally got my next-door neighbor to drop AOL after showing her just how much easier it was to email photos from her new digital camera using a local email app.
And I'll just toss it right out there - they're all old people Every last one of them. So eventually AOL's user-base is going to literally die off.
Re:Todo: Get your granny's AOL login (Score:4, Interesting)
I took cancellation calls as a customer service rep for a few months. Most of the time I sympathized with the customers who wanted to cancel and clearly would not be swayed by the scripted "save" offers I was required to make. But when customers started cursing or being rude, I was only too happy to continue with my script and take my time with it. And after speaking with some especially rude customers, I accidentally checked the "free-for-three-months-then-begin-charging-again" response instead of "cancel". Oops.
Re:My grandmother is one of them... (Score:5, Interesting)
A few years back, my mom got DSL. I told her to drop her paid AOL subscription and just use their free service. She asked me to call AOL and do it for her.
I was prepared to spend an hour saying "please cancel the paid service" over and over and over.
I was shocked. It took me 5 minutes on the phone. Then, when I wanted to call back to confirm something, an automated voice told me that the account was on the free service, and customer service would cost me -- did I want to continue?
Re:Todo: Get your granny's AOL login (Score:3, Interesting)
You think that's pretty funny, don't you? I say it's pathetic and I hope your karma catches up to you in a big way. I talk to those AOL customers every day. Many of them are senior citizens. On average, they aren't well educated, and they don't have a lot of money. For some of them, $25 a month is a lot of money. So while you laugh your way to the bank with your paycheck, your health insurance, and all of the other benefits, remember that the people you are screwing are the ones that funded that paycheck, and the reason they are so angry in the first place is because of the way they've been treated by AOL customer service reps.