Mindspring Does a Mind-Flip

Forget everything you thought you knew about Internet companies. Here's one that's growing responsibly, serving customers well — and making money. Oh, by the way, it's worth $1.5 billion.

You know what Internet companies look like, right? Explosive growth — often at the expense of service. Cool technology — often at the expense of reliability. Big investments — often at the expense of profit.

Well, look again.

Take a trip to the Atlanta headquarters of MindSpring Enterprises Inc., and you'll see a very different kind of Internet company. Its "chief operating rottweiler" is a three-legged dog named Louie. There's beat-up furniture in the waiting room, and there are plastic lawn chairs in the CEO's office. Yet there is one similarity between MindSpring and other Internet companies: its mind-bendingly high valuation. The 600-person outfit, launched five years ago, has a market cap of nearly $1.5 billion.

"One of our core beliefs is that we should treat company resources with the same vigilance that we apply to our personal resources," says Charles Brewer, 40, founder and CEO. "Some companies can succeed with a high-spending style. That's not us."

MindSpring is a top competitor in the ISP (Internet-service provider) market — one of the most competitive quadrants of cyberspace. Brewer founded MindSpring in early 1994 and began by offering Net hookups to customers in Atlanta. Today the company has more than 600,000 customers around the country, and its annual revenues exceed $100 million. Shares in MindSpring, which went public in March 1996, have risen from $3 to more than $60.

How has Brewer's company delivered such a high-octane performance? By going back to basics. The ISP business is dominated by corporate giants: AOL, AT&T, MSN. Brewer isn't fazed. "A year after we started, we were the leading ISP in Atlanta," says Brewer. "Our service wasn't perfect. But we made customers happier than the competition did. We told the truth. When there were problems, we did our best to make things right. And customers felt that we were basically competent people. If you do that, people will give you a break."

Brewer's company keeps customers in focus by focusing as much on down-home values as on cutting-edge technologies. "The most important thing about this company is its culture," says Michael McQuary, 39, MindSpring's president and COO.

MindSpring has nine "core values and beliefs" that govern how it operates. The principles are posted on office walls and on the backs of business cards. MindSpringers even recite them before their weekly all-hands meeting. "Work is an important part of life," declares one principle, "and it should be fun. Being a good business person does not mean being stuffy and boring." Another declares, "We make commitments with care, and then live up to them."

MindSpring has codified behaviors to avoid — what it calls "The 14 Deadly Sins of MindSpring (or ways that we can be just like everybody else)." Sin #3: "Make internal procedures easy on us, even if it means negatively affecting or inconveniencing the customer." Sin #8: "Show up at a demo, sales call, trade show, or meeting unprepared."

It takes more than folk wisdom to create a profitable company in a cutthroat market: It takes street-smart tactics as well. Lance Weatherby, 38, executive vice president of sales and marketing, says that word of mouth accounts for 30% of new sales at MindSpring. So the company encourages customers to spread the word — by offering them credits against their bill in exchange for new-customer referrals. MindSpring's "territory managers," meanwhile, buddy up with big PC retailers like CompUSA — by providing them with free Internet access and by offering to teach their salespeople about the Web. When a customer buys a PC and asks about getting online, those salespeople often recommend MindSpring.

But even successful companies have to keep pushing to improve. So every day, MindSpring surveys tech-support callers about the quality of their experience with the company. Last October, the company sent out 18,000 surveys; the response rate was a whopping 60%. "We get some great feedback," says Weatherby. "It's amazing. Our customers really want us to do well."

You can learn more about MindSpring on the Web (www.mindspring.com).

Sidebar: How to Play the Service Game

Is there anything that computer users dread more than calling a support line? Busy signals, long delays, dumb reps — they are as much a part of the Net as email and instant stock quotes.

MindSpring is changing the service game.

Its customer-service centers handle more than 150,000 calls per month, with an average hold time of 3 minutes, 19 seconds — a stellar performance by Net standards. The call centers' "abandon rate" (which measures how many callers hang up out of frustration) runs at only 4%.

One way to change the game is to change the tone at call centers

— right down to the titles of the people who staff them. Technical-support experts are "sports"; customer-service reps are "smiles"; salespeople are "sailors." "At some companies," says Jon Rietmulder, 39, vice president of call centers, "this kind of work is the lowest of the low. That's not the attitude here."

Another way to change the game is to give staffers a playbook.

The MindSpring Playbook, part of the company's intranet, offers "Coach's Tips" (which let employees share ideas about helping customers), reminders about MindSpring's values (including the "14 Deadly Sins"), and tools to help staffers solve problems.

One tool helps call-center employees track the post-call success of their help sessions. Most MindSpring customers have only one telephone line at home — which means that after they talk with a sport, they have to hang up in order to connect to the Internet. This tool lets the sport monitor whether a customer is actually able to get online. If the customer is successful, the sport might send a congratulatory email. If the customer has problems, the sport can call the customer back. "Customers say, 'Hey, you promised that you'd call me back, and you did,' " laughs Rietmulder. "They're stunned. But they shouldn't be. We do what we say we're going to do."

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