Some customers are better than others. And some, perhaps, are so bad you might rue the day you ever sold them anything in the first place: They complain, they want their money back, and if you don’t cave they will slam your company online. We all know the type.
A new paper published in the Vanderbilt Law Review calls such customers “nudniks,” and argues that, thanks to Big Data and increasingly sophisticated predictive algorithms, businesses may be able to identify potential nudniks and head off trouble — perhaps by avoiding having them as customers in the first place.
But don’t get too excited about the prospect of putting an end to “Karen” demanding to see the manager once and for all. “The Theory of the Nudnik: The Future of Consumer Activism and What We Can Do To Stop It” actually makes a compelling case for the value of nudniks. They’re a crucial voice in the market conversation, important to more passive consumers and to the optimum functioning of the marketplace in general. Figuring out ways to freeze out or avoid this category of consumers would amount to businesses “shielding themselves from market accountability.”
“A nudnik is someone who demands to speak with the manager, writes an angry letter to the editor, or brings a lawsuit over a torn pair of pants that cost $40.”
The authors of the paper are Yonathan Arbel of the University of Alabama School of Law, and Roy Shapira of Harry Radzyner Law School at The Interdisciplinary Center in Herzliya, Israel. Arbel has more of a concentration on consumer law, while Shapira has focused on corporate image. “We’re both very interested in reputation,” Shapira told me by phone recently, and that led to them take a close look at this group they dubbed “nudniks.”
The paper is quite clear that nudniks — a Yiddish term that can translate as a bore, a nag, a busybody, a meddler, etc. — aren’t popular, or even terribly sympathetic. “A nudnik,” Arbel and Shapira write, “is someone who demands to speak with the manager, writes an angry letter to the editor, or brings a lawsuit over a torn pair of pants that cost $40.” They are serial complainers, and they pick fights that hardly seem worth the trouble. Nudniks have “idiosyncratic utility functions: they will take action even when the costs far outweigh the immediate financial benefits.” And sometimes, the authors concede, they really are just wasting everyone’s time.
But not always. The authors cite various examples of nudniks whose complaints had real impact. Like the United passenger whose video about the airline breaking his guitar went viral; the airline compensated him, changed its customer service policies, and used his story in internal training. Or a woman who got a television reporter interested in her outrage at being charged for using the safe in her hotel room; she got her money back, and the incident drew attention to hidden hotel fees. Or more recently, when author Nassim Taleb took to Twitter to blast Tesla for refusing to refund his accidental software purchase; instead of just accepting one when it was offered, he held out until the carmaker actually changed its refund policy — a benefit to all customers.
Such “nudnik-based activism,” as the authors term it, is necessary for any theory of bottom-up market discipline to work. This is how “Karen,” under the right circumstances, becomes a sort of Karen Brockovich.
That, of course, is why plenty of companies might prefer to identify the nudniks in advance, and either treat them with special care and handling — or just dodge them altogether by, for example, making sure they never see your ads or learn about your product or service offering in the first place.
Our online behavior, in particular, is already tracked in ways that try to predict our behavior: who we might vote for, what ads we might respond to as they follow us from site to site, which social media post we’ll interact with. Moreover, companies “store troves of data on consumer behavior,” the authors note. Customer Relation Management software tracks and rates complaints and Customer Lifetime Value models predict consumer attitudes. There’s already been much discussion of how online retailers might mine big data to tweak pricing for different consumers (although the Robinson-Patman Act outlaws such price discrimination in most circumstances).
Think of the effort companies put into identifying online influencers, Shapira says, and nudniks are essentially anti-influencers. So it seems more likely a question of when, not if, it becomes common practice to do identify them, too. Maybe you can make sure to treat them better, or maybe you can make sure they don’t see your ad or product offering in the first place.
Listen more, and maybe you can boost your reputation by flushing out problems improving your product or service, rather than expertly avoiding anyone who might notice its weaker points.
The authors argue that the intervention of regulators, the courts, and other scholars are needed to prevent that outcome, and “facilitate a well-functioning market for reputation.” Most consumers, they note, are largely passive, essentially reacting to market signals; nudniks are the ones who often cause or influence those signals in ways that companies can’t control. The so-called “rational apathy” of those of us who would rather not waste our own time complaining to the manager is rational precisely because of nudnicks.
But, I asked Shapira — who has advised companies on reputation issues, and is the author of book due out later this year, Law and Reputation — why should a company or other seller be concerned about nudniks being, in effect, neutralized through some early detection strategy that allows them to be treated gingerly or simply avoided altogether?
For starters, companies can actually learn from difficult customers or dissatisfied users. “Listen more,” he suggests, and maybe you can boost your reputation by flushing out problems improving your product or service, rather than expertly avoiding anyone who might notice its weaker points.
And consider how reputation and competition intertwine. If your rivals invest in nudnik identification, you might feel pressured to do the same; smaller players (a local store) will naturally be at a disadvantage to larger or better-funded ones (a massive online retailer). The marketplace gets warped by an emphasis on appearance management, rather than innovation — and reputation becomes a barrier to entry for potentially disruptive upstarts.
This doesn’t mean you have to love nudniks, of course: They’re still pretty annoying. So keep rolling your eyes or gritting your teeth. But consider showing nudniks a little respect. Maybe they deserve it.