AOL's descent into darkness

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People ask me if I don't get tired of all this Internet craziness, and I just snap back, no sir! The fun never stops online. After a hard day's work yelling at people about the server being down, I still enjoy going home and dialing up a few hundred busy signals on AOL. That really relaxes me and makes me glad I'm a member of the AOL community.

America Online customer relations: Isn't that what online marketing's really all about? Why, just as soon as customers began filing class action lawsuits, AOL was right there with a press release blaming its network congestion on phone-hog subscribers. Was that a proactive response or what? With some companies, you have to hit them over the head with a baseball bat to make your point; with AOL you apparently need to bash away quite a few times.

I think most AOL customers had the same reaction when they heard about the class-action suit: "Hey, I want to sue, too!" This is a service-oriented business that has finally united all its customers into one community: A lynch mob, to be sure, but at least unified.

AOL appears intent on pioneering a new kind of anti-customer marketing for the new media world, and there are lessons here for other Net marketers.

For example, most experts would agree that if your entire customer base is griping about a clear and growing service problem, you don't actually have to wait for them to sue you before acknowledging the problem publicly. I'm not going to say AOL executives aren't keeping in close touch with their customers' needs, because they say they are, but then you have to wonder why they let the problem fester until it blew up in their faces.

In fact, why not start before the problem begins and avoid it altogether. Here's a tip: Don't keep trying to force the market into overrunning your business. The easy rule of thumb here is: Can you keep up with your e-mail and various other online response functions? If you're constantly struggling, then here's a hint: Don't keep advertising for more business.

In its half-hearted public apology, AOL promised to build up its access network over the next few months, which is aggravating on two levels. First, because you can't trust these guys not to immediately try to sign up hordes of newbies and blow it all again (AOL's good intentions on this are roughly as credible as a hard-core gambler swearing he's through with Vegas).

Second, and more importantly, is the obvious fact that AOL can end this mess virtually overnight if it wants to, without building anything. The real problem here is that insane flat-fee pricing plan, and all it will take to put AOL back online at night is to (excuse my shouting) RAISE THE PRICE IN PRIME HOURS!

The market's invisible hand is a beautiful thing, and it never fails. If the most congested hours are premium priced, usage will inevitably go down. Indeed, through creative and intelligent customer pricing of their service, AOL's wizards can shift traffic however they want and give all its subscribers access again -- albeit at a market price reflecting the scarcity of the resource.

AOL brought this fiasco on itself by ignoring basic supply-and-demand laws that any Econ 101 student could have explained. Every day that goes by without even the simplest fix takes the company ever deeper into the black hole of anti-marketing.

David Klein is group editor of the Ad Age Group.

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