Monday, November 17, 2014

Natural Selection at Work—Or Not

The free enterprise system is often considered to be a practical application of natural selection. Natural selection requires variation within a population, and that some of those variants are more successful than others, based not upon chance but upon their traits. Natural selection works on genetic variants in a biological population, and on different ideas within a culture. Good ideas (some of them called memes) catch on. It is supposed to work in the marketplace also: a company that treats their customers badly will, in theory, lose market share.

But this is not always true. On the day that I originally wrote this essay (August 21, 2014), Bank of America settled with the Department of Justice with a $16.65billion settlement, the largest settlement in history between a single corporation and the federal government. They used the financial crisis of the last decade as an opportunity to trick customers into buying investments that were falsely represented. You would think that the market would respond in Darwinian fashion and declare B of A to be a bad corporation, unworthy of investment. But you would be wrong. That same day, B of A stock prices were up 3 percent. Apparently corporations can do whatever they want and get away with it in the long run; if they get caught, the penalty is miniscule compared to the money they make by continuing to abuse their customers. Thank whatever God there may be that I got rid of both of my B of A mortgages. I still have some credit accounts, but the balances are shrinking and someday I will be certifiably B of A free.

Another example is a group called Wyndham Rewards. They book motel rooms online and give you bonus points for doing so. Sounds like a good deal, and for me, for a decade, it was. But just this summer motel managers started giving me horror stories about how customers who had booked online through Wyndham Rewards have gotten screwed over. In my case, a Super 8 motel put me into a smoking room when I had reserved a non-smoking room. This is a potential health hazard. The Super 8 refused to change my reservation until finally I threw so much of a tantrum that they were ready to call the police. It was a calculated tantrum, designed to apply psychological pressure on the manager. The manager at that motel, and managers at others, told me this was not an uncommon occurrence. The manager told me that I could pay for a non-smoking room if I wanted—that is, I could have paid for two rooms if I wanted the right one. Gee thanks.

I have spent hours trying to get this mistake resolved. The Super 8 manager blamed Wyndham, and Wyndham blamed the Super 8 manager, over and over. In the end, they got together and blamed me. The Wyndham customer service manager told me that the problem was my fault for having trusted the online Wyndham Rewards booking; and, once I arrived at the motel, I had done the right thing by reacting angrily in order to get a problem resolved.

I have concluded, based on my experience (and what motel managers have told me of other experiences) that Wyndham Rewards is a company that will take your business and offer you defective service in return. Will the market respond to these abuses? Or will Wyndham Rewards continue to be profitable despite the way they abuse customers?

I will attempt, now, to participate in the natural selection process. I have posted this blog entry. I will not use this company’s services again, nor will I stay (unless there is literally no other choice) at any of the associated hotel and motel chains. Here is the list:

·        Days Inn
·        Hawthorn
·        Howard Johnson
·        Knight’s Inn
·        Microtel
·        Ramada
·        Super 8
·        Travelodge
·        Wingate
·        Wyndham

Please join me in helping to reduce the profits of these companies and of Wyndham Rewards. It is possible that you may get satisfactory service from these hotels and motels by booking directly with them, but I, for one, will try to use the market against them because of their participation in Wyndham Rewards.

If we share our experiences online with others, it might actually make a difference. I certainly published my experiences on TripAdvisor. They sent me an email saying that 5,435 people have read my reviews (and that was a few months ago). And we should publish not just our negative experiences, but our positive ones. My most popular review was a very positive one about Buffalo River National River, which 1,350 people had read, mostly in the US but some from Europe as well. Numbers like this, while small in comparison to the total number of travelers, show that there is some hope for using the power of marketplace selection to make a difference in how customers are treated.

Let’s see if natural selection works in the marketplace.

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