Does Groupon Hurt a Restaurant's Ratings?
|Does Groupon bring out the trolls?|
The three researchers followed 16,000 Groupon deals in 20 cities, tracking how Facebook helped boost sales of the deals. However, as Groupon users registered their experience with a participating business on Yelp, its overall rating went down:
[The researchers'] most controversial finding is that a Groupon deal seems to have an adverse impact on reputation as measured by Yelp ratings. Their analysis shows that while the number of reviews increases significantly due to daily deals, average rating scores from reviewers who mention daily deals are about 10% lower than scores of their peers.What's the reason for the decrease in positive comments? Is it the fact that daily deals reach new customers outside a business's natural target audience? Are we contemptuous of businesses that offer a discount? Is the Yelp-score dip permanent, or will subsequent coupon-free months restore it to its previous level? Unknown.
What is more important to businesses than a half-point drop in a Yelp rating is a longer-term increase in revenue. If deal sites can offer that, they have nothing to fear.