AOL's Switch To Free Features Sows Confusion Customers Irked by Requirement That They Call to Change Status; Listening to More Sales Pitches
By JESSICA E. VASCELLARO Wall Street Journal August 8, 2006; Page D1 http://online.wsj.com/article/SB115499715104229352.html?mod=home_whats_news_us Signing up for free AOL is exacting a price in frustration among the company's legions of subscribers. Last week, the online pioneer announced it would start giving away its popular software, including email, search and messaging functions, while continuing to charge for various dial-up packages and customer service. But as many of the Time Warner Inc. unit's 17.7 million subscribers in the U.S. have started logging on to explore the company's offer, they have run into a logistical tangle that has left them scratching their heads over how and when to switch to free service -- and vexed to find out they are being asked to do it by phone. (See related article.) After receiving an email that AOL sent out to subscribers announcing the change last week, Michael Parekh, 45 years old, went to AOL.com and clicked around before landing on a list of Frequently Asked Questions. After clicking on "When can I get AOL for free," he expected to be directed to a page where he could quickly switch plans but found an 800 number instead. After dialing, speaking his screen name and phone number and listening to menu options -- of which switching to the free account wasn't one -- he struggled with a phone tree and finally got through to a representative who changed his service to a free plan but not without presenting him with two other offers -- one a promotional $4.95 monthly plan for customer service and some dial-up hours and a video lesson with a free video camera. "Most people would have given up at multiple points," says Mr. Parekh, an investor in New York, who stopped paying $14.95 a month. Others were similarly cranky. "I was not really sure what the email was saying," says Neal Leeper, a real-estate executive in North Carolina who has been with AOL for more than a decade. He said he couldn't tell if the free plan had already taken effect. After waiting a day or so, Mr. Leeper, 33, investigated the options online. But when he went to change his price plan on AOL, he said he didn't see a free option listed. "I guess I will see what happens with the bill," he says. As laid out by AOL, paying subscribers who ignore the change will stay on their current plan at the existing rate. Those who have an alternative Internet connection can use AOL software and its virus and spyware protection -- without a monthly charge. Members who still wish to use AOL to connect to the Internet can pay $9.95 a month for unlimited dial-up service and customer support. A package for $25.90 a month, the price of its current unlimited dial-up service, includes additional security features and 50 gigabytes of backup storage along with customer support. Broadband users wanting backup dial-up can pay $9.95 a month for 10 hours of dial-up, premium security protection and customer service. Switching subscribers' plans automatically would have been unfair to those comfortable with their existing service, AOL says, adding that it wants to inform people about all of their options, particularly if they still need dial-up Internet access. Members who use AOL to access the Internet -- nearly two-thirds of its subscribers -- need reminding that if they switch their plans they may find themselves cut off, says AOL spokesman Andrew Weinstein. "We want to make sure they understand that they need an access provider to provide a connection," he says. Also, automatic changes might have caused problems for members with certain broadband bundles, Mr. Weinstein says. "A lot of customers are perfectly happy with where they are now and might not want to deal with having to switch." Some AOL members said they didn't mind calling to switch their accounts. Michael Tillmans, a graduate-school teacher in St. Charles, Ill., says he was surprised that he couldn't make the switch online but that it was still convenient and took only a few minutes. "They cautioned me that customer service wouldn't be free with the new plan, but I didn't feel as if I needed it," says the 59-year-old, who had been paying $14.95 for dial-up despite getting broadband access two years ago. AOL's role as a flagship Internet provider and popular consumer brand has been steadily eroding for years. New rivals such as Yahoo Inc., Google Inc. and Microsoft Corp.'s MSN offer many of the same email, address and instant-messaging features free, and AOL has followed suit by migrating some of its own services directly online at AOL.com. AOL is currently undertaking a major transformation by making its software platform, which bundles tools like email, search and its leading instant-messaging service, free and lowering its dial-up costs. It is a milestone for a company whose access packages and software logged many Americans onto the Internet for the first time. AOL expects to offset the lost subscription revenue with expected gains from online ad revenue, which was up 40% in the most-recent quarter. The company also recently announced that it is letting go of as many as 5,000 employees within six months as its shift away from dial-up reduces its customer-support needs. AOL's challenge is unique. Today, plenty of Internet companies, such as free social-networking and video sites, are aiming to get users to sign up for premium paid services to boost revenue. Now, AOL is discovering that giving away part of its service in a bid to attract more users and, in turn, more advertising dollars -- which should be easier -- has myriad logistical problems of its own. The company is taking precautions. The email from AOL Chairman Jonathan Miller went out in batches from Wednesday to Friday, staggered to help the company manage call volumes. It included a link sending users through a series of pages where they were eventually told to switch by calling Member Services' toll-free number (800-984-6207). To prepare, the company began new training session the weekend before the announcement. AOL's customer service is under particular scrutiny. A transcript of an AOL's member's frustrating attempt to cancel his membership -- during which a testy representative kept questioning his desire to quit -- recently made the news, striking a chord with many AOL members. AOL at the time said the representative violated company policy. To handle the high number of calls, AOL implemented an online switching option Thursday. By going to keyword "Change Plan," broadband members could switch to the free version in a few clicks. But the company cautioned that the option may be shut off now that call volumes have subsided, and that the toll-free number is the best way to change. The debut of the new free plan is the latest change that AOL members, many of whom have held their accounts for years, have had to navigate. The company has regularly tweaked prices and plans over the past several years, most recently in January when it raised some rates and began offering a new broadband bundle. The company says it has continued to revise its plans to cater to customers who want high-speed access and for the sake of standardization. AOL is now preparing new product announcements. The company said last week that all members will receive five gigabytes of free storage, enough to store about 2,000 photos, through Xdrive Inc., which it bought last year. New safety controls and the option for personalized email addresses are coming within the next month, and the debut of a new version of AOL software, also is on the way. Sharon Rikli, 56, a high-school counselor in Tucson, Ariz., has shifted her AOL plan three or four times over the past several years. This time, worried that she would lose instant-messaging on the free plan, she put in a call to a customer-service representative who assured her that it wouldn't go away and Ms. Rikli made the switch. But she still has her doubts. "I am skeptical of free things so I will keep an open mind and see what happens," she says. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
