Does This New Law Review Article Sound Like It’s Describing Your Life?

This new paper forthcoming in Vanderbilt Law Review sure sounds familiar to me.

Nudniks are those who call to complain, speak with managers, post online reviews, and file lawsuits. Typified by an idiosyncratic utility function and personality traits, nudniks pursue action where most consumers remain passive. Although derided in courtrooms and the court of public opinion, we show that nudniks can solve consumer collective action problems, thereby leading to broad market improvements.

Second, the Article spotlights a disconcerting development: Sellers’ growing usage of Big Data and predictive analytics allows them to identify specific consumers as potential nudniks and avoid selling to or disarm them before they can draw attention to sellers’ misconduct. The Article therefore captures an understudied problem with Big Data tools: sellers can use these tools to shield themselves from market accountability.

Finally, the Article evaluates a menu of legal strategies that would preserve the benefits of nudnik-based activism in light of these technological developments. In the process, we revisit the conventional wisdom on the desirability of form contracts, mandatory arbitration clauses, defamation law, and standing doctrines.

Subtitled “The Future of Consumer Activism and What We Can Do to Stop it” it sure sounds like it’s describing the rise and fall of the frequent flyer hobby, with squeaky wheels generating outsized benefits and both loyalty programs and their co-brand card issuing partners cracking down on customers they’ve deemed undesirables.

A nudnik, by the way, is Yiddish and approximates a pest or a nag. And the crackdown on consumers who pester for benefits and compensation is mirroring itself not just in the airline and credit card businesses but it’s harder to complain to the cable company – and just about every other business – than it used to be.

Indeed wasn’t Northwest v. Ginsberg, the Supreme Court case that established the right of frequent flyer programs to ignore any obligation of good faith or fair dealing, dubbed the case of the rabbi that complained too much? He lost.

(HT: Marginal Revolution)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. One of my peeves of American culture is the following:

    1. A service provider renders poor service.
    2. The customer complains.
    3. The service provider labels the customer entitled, whiny, high maintenance.

    It’s too bad American culture allows the above 3-step process to flourish. American culture, at least in this day and age, hasn’t been about encouraging providers to deliver high quality service that makes everybody proud. Instead, American culture in this day and age is about lambasting the privilege or whatnot of anyone who complains. Legitimacy of the complaint be damned.

  2. Nothing like being labeled a funny name with a partially dead language. I guess it goes both ways. The US needs better consumer protections but also we have a legal system where the looser of a trial does not pay the trial fees necessarily (unlike most of Europe) so frivolous law suits can move forward with no repercussion. Maybe encourage both changes (better protections but also more accountability for frivolous suits). I suppose the use of Yiddish is appropriate as the country with the most attorneys per capital is Israel so they can establish some of the legalese.

  3. @Jon Ben ; they speak Yiddish in Uruguay? because last I checked that was the country with the most lawyers per capita

  4. I don’t complain typically. If a company really is concerned about losing customers, they will figure out why customers are leaving.
    For instance, my last flight, I needed to bring luggage and three people. All the competitive fares were basic economy, so, I chose an airfare based on non-reserved seating, 2 free luggage, and no bizarre carry on limitations. The best part: on SWA I sat in the seat of my choice, not the middle seat. At worst, I would have had the middle seat on the last row, a small probability. With basic economy, middle seat is a high probability.
    Actually, it’s the board of directors that needs to get customer feedback, since mgmt has a tendency to screen or minimize negative feedback presented to the board.
    Nudnick reference to Yiddish language… I don’t see a correlation there. Many people don’t know Yiddish, and typically the nudnick is the airline/hotel/credit card/food service rep not knowing a legitimate complaint from a frivilous one. Amex gets it, even McDonald’s gets it. Chickfila gets it. L3 gets it, but are making too much money to get distracted by the small customer and actually accommodate. The problem is, when they do have to adjust, they will be losing so much money, they won’t be able to discount fares to attract business. Didnt we see that already when they went through bankruptcy like 10 years ago.

  5. @Jason. You have a really negative view of the American culture. Not sure that customer service is better in other countries I have been in.

  6. @Gary. Kind of an interesting conversation. If there is a problem, then the complainer is like a canary in a coal mine. Businesses should seek these people out and try to fix the issues that they are complaining about. 90% of people will experience the problem, and not shop at the establishment again. Business will fly out the window, and the business will have no idea why. This leads to declining revenues and declining sales. Management kind of knows that theoretically. That is why there are so many intrusive requests for surveys.

    However, companies are trying to substitute big data and command and control computer programs for actual customer service. That is why it takes 20 minutes to get through the phone menus to get to a customer service representative answer a one second yes or no question. [Happened today for me.] 5 years ago, the Amex representative could fix almost anything. Now, they do not have the authority. Customer service is way down hill, not a reason to keep their card any more. [LOL: I am guessing that their customer service quantitative metric are fine, it is just if you call them because of some irregularity, it is really frustrating.]

    Similarly, I used to call American Airlines reservation agents to fix delays. Now they do not have the authority and tell you to go to the airport representatives because they have the authority to change and so on. That is a management issue and not a customer service rep issue.

  7. @ Jason
    I was being sarcastic sorry about that
    I actually didn’t finish my post
    For 20 Years I have worked on behalf of wronged customers in and out of social media
    And as social media has grown the travel industry every year has grown more irresponsible on the whole to the point of having to turn to top tier executives to solve issues
    Marriott comes to mind as one who has fallen badly

  8. If a company sends me a “tell us what you thought” email, I will invariably respond: good, bad and ugly. I find it telling that Marriott doesn’t seem to bother these days…I’ve not had a post stay survey for well over a year ( so something in the order of 150-200 nights.
    Also to be noted: some properties appear to have ceased participating in surveys altogether…I looked at reviews on the site and noticed that at least one ( in San Francisco IIRC) had none for nearly 2 years.

  9. I’d predict many of the people with this mentality (like myself) would be labeled as INTJ on the Myers-Briggs personality test. High capacity to game system combined with litigiousness in the face of unfairness.

  10. The word Nudnik always makes me chuckle…when I was a little kid, my dad used to call me NUDEnik when I would run around the house in the raw before my evening bath. I’m in my 50s now but it still amuses me.

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