Aug 10 2006
Calacanis Mopes
Jason Calacanis (disclaimer: I like Jason very much) is a bit depressed:
I have to be honest with y’all: it’s hard times at AOL right now, that’s for sure.
Every couple of steps we take going forward (Netscape, TMZ, Live8, moving to the free model, AIM Pro, AIM Pages, free five gigs of backup, 40% growth of advertising for Q2–beating Yahoo, MapQuests API, AOL Uncut Video), we seem to get hit back by something horrible like “the call” or “the data Valdez.” The truth is the company is moving forward, but these things create a horrible perception problem, and it has a real world impact in that it de-motivates my teams and it makes it so much harder to get new people into the company. Smart folks ask me about stuff like “the call” when I try to recruit them for AOL, and I have to assure them it isn’t gonna happen again. It’s not easy, and I wish I could tell you I always win that fight–but I don’t.
[snip]
To my team (and everyone at AOL), keep fighting the good fight. Put your anger into your game and stay focused. The darkest hour is the one before the dawn. We’re gonna get through this.
Are you? Let’s understand the magnitude of the bad versus the magnitude of the good using his two examples.
The call.
Let’s extrapolate that out to include everyone that’s had trouble cancelling their AOL account (both living and dead). Understand that my call wasn’t so popular with people because it was some isolated “Holy cow, I can’t believe that happens” kinda way. It was popular because people had it happen to them. Despite AOL’s best efforts to frame this as an isolated incident, and that member cancellation requests are to be handled immediately, their own training manual implores employees to “take what the member says and keep digging.” Even internal memos circulated after the call require call-center employees to make two pitches to exiting customers as opposed to the prior requirement of 3.
With all due respect, Jason, AOL has learned nothing from the call. I’ve already heard reports of retention people (or regular CSR’s) trying to retain people moving to the new improved free service and hanging up on people when they ask. I’ve even heard that AOL has told people they “don’t have the time” to process the request and have suggested people submit it via e-mail.
Way to learn from your mistakes, folks.
Let’s look at the other incident. The data leak.
Thousands of data points released to the general public. Is there really anything more to say? As Robert points out, that is in direct violation of AOL’s own privacy policy:
Your AOL Network information will not be shared with third parties unless it is necessary to fulfill a transaction you have requested, in other circumstances in which you have consented to the sharing of your AOL Network information, or except as described in this Privacy Policy. The AOL Network may use your AOL Network information to present offers to you on behalf of business partners and advertisers. These business partners and advertisers receive aggregate data about groups of AOL Network users, but do not receive information that personally identifies you.
So much for that. I guess the entire internet public at large doesn’t count as a third party, huh?
Jason’s “steps forward” include the company moving to free (whoopdeedoo), AOL Video (like anyone’s gonna use that instead of YouTube?), Netscape (okay, he has one there; Netscape is cool), Mapquest (give me a break. Google Maps was ahead of it the day it came out 2 years ago), and 5 gigs of storage (so?).
Is there anyone who thinks that those “steps forward” which are, at best baby steps, come anywhere near the magnitude of the steps backward? The leaps backward are gigantic quantum leaps, Jason, and with each new gaffe, AOL proves that it really has no idea how to run a company, keep users happy, and do the right thing anymore. They’ve lost sight of the people who matter, the members, except when talking about them in terms of ad impressions.
That’s not something you get through, Jason. That’s something you address and change, and I don’t see an effort on the part of AOL brass to fix it. Giving someone 5 gigs of storage or a YouTube clone won’t make up for the company leaking a user’s search results or refusing to offer them a product without a dna test and urine sample.
If you take a “this too shall pass” attitude, you’ll only be partially right. “Passing” will mean the end of AOL, and the shuttering of its doors.
At that point, all these problems will be over.
Technorati Tags: aol, jason calacanis
August 10th, 2006 at 9:24 am
What I didn’t see in any of the AOL response is that the data was released by a ‘rogue agent acting on his own.’ Nor did I see anything stating that whoever (either individual or a team of peoples) did this leak of information was terminated. Why? Because AOL allowed it and something like this was definately approved by upper upper echelon of AOL corporate monkies and you can’t just fire them of course. So what is the greater sin? Following your retention requirements and someone tapes the call an releases it on the web or AOL willfully and knowingly releasing thousands of pieces of information that not only identifies but potentially releases critically damaging information about their members. Something they vowed never to do and pitched that they don’t do in all their commercials and even retention pitches. Absolutely incredible. Calacanis laments this as if it is something that happened without any of their control - he acts like AOL is JOB from the bible and all this bad stuff happens out of the blue - one big difference AOL did this all to themselves. So for him to whine and cry is insane - he should be saying “i don’t know what the hell anyone was thinking by doing this and we are investigating this and harsh punishments will ensue.” Let’s take their ‘can the spam’ campaign. THey had no problem at all making a public spectacle of spammers. I remember they even caught one guy and somehow in the settlement AOL got money and his porsche - they then gave away his porsche to some aol member in some drawing. So they obviously have no problem doing something like that to a spammer - and they obviously don’t have a problem slitting the throats of Chalupa and John and throwing them out in the street much like the Mujahadeen. So let’s see what they do to the people who willingly released MEMBERS SEARCH DATA. Probably nothing because obviously bigger fish let that cat out of the bag.
August 10th, 2006 at 11:57 am
I tend to agree with all of Vincent’s analysis. I would add that “the call”, as Jason Calacanis put it, is not what he should be lamenting. It was not “the call.” It was “the policy.” It was “the culture.” It was “the ethos.” It was “the fact that we had a ‘retention department’ in the first place.” And all the nightmares for thousands of customers, and hundreds of employees, that this created.
It sounds like AOL still refuses to ponder the possibility that treating a cancellation call as a retention opportunity is something fundamentally wrong, offensive, and backwards. That if people are quitting your product, maybe you need to either improve your product, get into a different line of business, or phase out your company. Instead, AOL’s policy was put hundreds of people on the payroll to second-guess customers, and force, or attempt to force, them to stay.
Does Mr. Calacanis feel any shame about…
…the quota system?
…the no-personalization-allowed pods?
…the crazy, unpredictable, game playing bonus “system” for employees?
…the severe stress experienced by many employees?
…the insulting and infuriating of customers?
…the “fast-talking”?
…the trickery?
…the robbery?
And what about the disingenuous handling of “John” and Vincent’s call (Oh we are just shocked at what we heard!)
I think the road Mr. Calacanis proposes is ever harder than he realizes. I suspect it would be more honorable, and much less costly, to just throw in the towel. (I would at the least bag the AOL brand - jeesh.)
August 10th, 2006 at 12:12 pm
Also: I agree with Bonejob than AOL should acknowledge that they made the bed they are in. They should not explicitly or implicitly blame “bad publicity.” They seem to continually avoid any kind of hard look at the culture of their business. “Fight the good fight?” What??? Tell me, how are you defining “good”??? That’s a fundamental question that needs to be asked. I’m talking about soul-searching. No superficial knee-jerk thing having to do with short-term revenue, quarterly earnings, shareholder value, etc.
A fact that sometimes has gotten lost is that there *were* reports of egregious practices regarding attempts to cancel AOL prior to Vincent’s call. Vincent recorded the call to confirm things he had heard. Radio show host and consumer advocate Clark Howard publicized the difficulty in cancelling AOL and gave advice on how to do so well before Vincent’s call. There is stuff on epinions about it that also pre-dates Vincent’s call. There are probably hundreds of other references to AOL cancellation horror stories pre-Vincent’s call. It’s just that Vincent’s recording and some well-placed publicity caught fire, big time — fire fueled by hundreds of “It happened to me, too”s. The point, again, is the AOL’s product is/was not “the call” — a.k.a. “we finally got caught” — it was the dreadful things they’d been doing all along.
August 10th, 2006 at 12:16 pm
I’m sorry about some typos in the above two posts:
– “…proposes is ever harder…” should be “…proposes is even harder…”
– “…AOL’s product is/was not…” should be “…AOL’s problem is/was not…”
August 10th, 2006 at 12:54 pm
You are exactly right Bill - they seem to treat all of this as if all this happened out of the blue. No it didn’t happen that way - somewhere many years ago this practice and culture was started. Just like on the farm, we plant seeds - and if we want them to grow we water them and cultivate them and fertilize them so that the harvest is great - it takes alot of planning and work to produce a bountiful harvest. In terms of AOL Retention, they planted the seeds and plans to keep members and this created a culture of WIN AT ALL COSTS - they even hired outsides sales people (OUTSELL) to create the Retention Manual - now if you look at the time line this manual was created not too long before NY won the lawsuit and after AOL had gotten in trouble with the FTC and had signed a consent decree. NY wasn’t the first to win something against AOL - the FTC made them sign a consent decree to change their practices about 5 or 6 years ago as they were threatened that if they didn’t change then they would basically have to provide the equivelant of a cancellation process that was as easy as providing a ‘button’ online that they click and it cancels their account. But they didn’t change even back then and the call shows that even now or even with ‘the call’ they didn’t change. They just make a little trim here or a nick there to make it look like they are complying. They would have to completely overhaul the way they do things - just like we did on the farm when we wanted to plant new crops on the field - we had to plow it up and completely turn the soil over - then disc it - and spray it with chemicals so that all the weeds and no trace of the old crops is there - it is only then can you replant and have a successful crop- AOL is trying to plant good seeds in a field so choked full of weeds they cannot be successful.
August 10th, 2006 at 7:48 pm
Bonejob: Great metaphor! (Your familiarity with farms tells me that you have skills — and values — that make you widely employable, all the better for your escape from AOL.)
I don’t think anything less than a complete overhaul is called for. Perhaps I can’t be objective, because of my own strongly negative experiences and opinions, but it’s hard for me to imagine how AOL can find a market with its plans to drench its products with even more ads and offer things (e.g., free email, online storage) that are already available through other services that don’t have the AOL stigma. This stigma affects not just prospective users, but also advertisers or would-be advertisers.
The big reason Yahoo search didn’t “become a verb” as Google search did is because Google doesn’t pollute their screens and users’ experiences with advertising like Yahoo does. Google is ad-funded, too, but it’s so much more reasonable, so much more unobstrusive. AOL doesn’t get “unobstructive.” They were an early pioneer in pop-up ads, and stuck marketing messages on printer setting screens and practically everywhere else they could. The messages were imbedded in “news” stories, too. This was consciously and subconsciously very off-putting, while very consistent with AOL’s disrespect of customers, and failure to really care about customers, what customers really wanted and didn’t want.
It sounds like “the new AOL” is more of that ad stuff. More of a bad thing. Yes, it’s free, but so is Yahoo, Hotmail, etc.
No paradigm shift involved. No tearing up of the field, applying chemicals, radically re-conditioning the land…. Closer instead to the same-old same-old business model.
As such, don’t be surprised if the crop yield of the new AOL is disappointing indeed.
August 11th, 2006 at 9:33 am
Isn’t it amazing that despite having all the necessary means to make itself a good company from the start and then also having the means to make a decent turnaround that it continually seems to muck it up. Not a product of bad luck but more a product of not having good enough people in there to ‘get er done’.
August 11th, 2006 at 11:20 am
I have a few simple questions. When a person signs a contract with AOL, it’s a two way street. Both parties agree to abide by the contract and AOL also agree to provide a certain level of service. When one of the parties breaches this contract, isn’t this grounds for terminating the contract immediately without the customer having to make any more payments?
Isn’t this also grounds for a lawsuit? People have gone to court for a lot less. I am very suprised I haven’t heard any talk of a class action lawsuit yet.
(P.S. nice blog man
August 11th, 2006 at 12:34 pm
Well AOL has been investigated on atleast 2 prior occasions due to numerable cosumer complaints to the FTC and each time they sign one of those consent decrees where they admit no wrong and agree to comply - both times it had to do with cancelling the accounts and handling call volume - one of the other problems aol was having is that they weren’t handling their calls - if I remember right they only had a 50% handle rate so basically people were calling in and never getting through to anyone. now they must maintain somewhere in the 95% range - what AOL has done is they only change the little things that people are complaining about - if people complain about not getting through and AOL gets busted for it - they only change that part of it. If someone complains about multiple saves attempts then they go from 3 saves attempts to 2 - if someone complains about call time taking too long the institute the automated voice thing (loop hole because you can’t count the amount of time a person spends with the automated voice thing as part of the call time - the call time starts when you get a ‘live person’) - the IVR is now some indiana jones type maze that is horrendous to navigate. What they need to do is listen to everyone and take all the feedback they can get - make the changes WE want not what will barely keep them out of hot water and get it done. Then come out with a a campaign strategy of “we listened to you and this is what we have done” - point blank. They make this huge deal about making things free but when you call in you have to go through saves attempts where someone is trying to get you to pay $4.95 or whatever. It is like 25 monkeys trying to hump a football over there. Utter chaos !!!
August 13th, 2006 at 10:07 am
“Perception problem” who is this guy anyway? (Oh I know who he is) Only a damned fool would call what AOL has done a perception problem.