The Decline and Fall of AOL

I don’t think to this day that Steve Case understands what Jan Brandt accomplished for him. My bet is that he assumed AOL was so good that it would have sold itself, with or without Brandt.

How She Did It

In those early days AOL’s competition—Prodigy and CompuServe—charged for the software as well as per-hour usage. Brandt used the Gillette model, which gives away the razor and sells the blades. She blitzed the country with diskettes—and later CD-ROMs—with free software and sold the service.

“I started blasting out mailings as fast as I could,” Brandt told me in an interview for Target Marketing magazine. “We mailed so much I had to roll out based on two campaigns prior, which meant we were flying somewhat blind all along.” At the same time, she lived in perpetual terror that she only had a limited window—that the others would do copycat mailings and flood the marketplace with diskettes. It turned out she had three years of being alone in the marketplace mailing floppies.

Why did the others not follow suit? For starters, where most marketing managers love to blab to the press how smart they are, Brandt maintained stony silence during those days. She made no speeches, took part in no industry panels and granted no interviews to the press. “I did not believe going public would benefit AOL in any way,” she said. At the same time, the buzz at industry gatherings was that Brandt and AOL were nuts—totally off-the-wall—sending out hugely expensive mailings that broke all the rules of direct marketing. “Yes,” she admitted to outsiders, “we really are stupid.” Brandt, her marketing department and Steve Case remained mum and quietly continued to eat Prodigy’s and CompuServe’s lunch. In Brandt’s immortal words: “It’s not the cost, stupid!”

It’s the response!

Coming out of the continuity world, Brandt understood the effect of strong up-front offers and the power of the word “FREE.” For a while she offered one-month free, which was immediately aped by CompuServe.