Poor Groupon. First, it had to restate its earnings from a "gross profit" of $270 million to an actual loss of $413 million, then the wheels of its IPO wagon started falling off. Now this bad news: a study by computer scientists at Cornell found that partnering with Groupon actually hurt a restaurant's reputation.
These guys have studied over 16,000 Groupon deals in 20 US cities between January and July this year. They monitored each deal every ten minutes or so to determine how sales varied over time and also counted the number of Facebook likes that each deal generated.
At the same time, they collected Yelp reviews--some 56,000 of them for 2,332 merchants who ran 2,496 deals--examining how merchant reputations changed before and after a Groupon deal. [...]
But their 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 signifificantly due to daily deals, average rating scores from reviewers who mention daily deals are about 10% lower than scores of their peers.
So these Grouponers (or are they Grouponies?) are unhappy with the service even with 50% off coupon? Sounds like a case for this Tumblr blog!
Link - via bon appétit
Greed drives customers to get good stuff for cheap
Greed drives restaurants to offer low quality for low price
Greed drives groupon to accept whatever offer it gets.
and finally every one complains : )
Lots of "Oh it's just the day after the coupon expired, will you still let me use it?" and "we're two groups, we're just sitting at the same table." stuff.
This is a damned if we do damned if we don't situation for the restaurant owners who get slammed with bad reviews because they don't cave into people like that.
I've read a blog about just this type of behavior and I will never EVER even want to buy groupon stuff due to the childishness of those kinds of consumers.
http://en.wikipedia.org/wiki/Cognitive_dissonance
Because you pay less for something, you think that it must therefore be worth less.
From the six months prior to the Groupon offer, there's already a tendency towards lower reviews. Perhaps they were already failing and thought Groupon Costumers could help them increase their rating... but they didn't improve what was already wrong, so they just got a lot of unhappy clients.
For instance when I worked at Subway and they would do 5 dollar footlong month, the customers that came in would want on average twice as many vegetables and sauce on their sub than normal customers, would complain that extra cheese and meat wasn't free and would usually end up being more rude then the regulars who come when there is no deal.
If groupon brings in this same class of people who possibly want as much as they can get for as little as they can pay it would make sense that they would leave bad reviews that normally the restaurant would not receive.