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Restaurants That Partner with Groupon Got Bad Reviews

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 in work here...
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 : )
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It could also be that places are giving people grief about using the Groupons in the first place, which could lead to the bad reviews. I had a restaurant say that I could only use the groupon for lunch, even though that wasn't stated in the terms when I bought it. A nail salon had a huge sign in their window that said that Groupons could only be used on weekdays, even though they didn't state that originally. I actually stopped buying Groupons because it was such a hassle to use them. The bad reviews could be people upset with rules and restrictions that were added by the restaurant/store after purchase, and not that they are overly picky people in general.
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One possibility: the restaurants got a lot more business than expected from Groupon and weren't prepared for the bump in traffic, leading to longer wait times, stressed out servers, rushed chefs... and the Groupon users got a worse experience than the average Yelp reviewer.
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Also, there's a lot of bullshit groupon users think they can get away with.

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.
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Bearfoot, there's also a lot of bullshit that restaurants think they can get away with in terms of making it difficult for customers to use the coupons they bought, and restaurant owners who want to increase their business through the sale of Groupon coupons but then don't want to honor them.
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Another strange factor to think about is that people don't appreciate things that they don't spend as much money on. I've seen and heard this happen time and again. For example the worst clients I've had for architecture or construction have been the ones you give the best deals to. It's not across the board but most of the time the people that pay full price let you do your job and don't interfere. The same might happen with restaurants, you get more rifraf than usual.
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It's a simple cognitive dissonance effect.

http://en.wikipedia.org/wiki/Cognitive_dissonance

Because you pay less for something, you think that it must therefore be worth less.
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I agree that clients who get free or discounted services can be the worst. I used to data conversion work for a software company, and whenever the clients were given a flat rate, or a comped conversion by our sales department, they always had unrealistic demands and expectations. When they actually had to pay the full regular hourly rate for me to do the work they were much more agreeable.
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I've had nothing but good luck with my groupons. From $300 off of a new mattress set, to half off a great hotel in Miami, to half off of food all over Tampa, to half off of shoes, every one has been great.
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Cognitive dissonance may work double-time here. At the time they pay less for a meal, the Grouponers have less reason to rationalize the value they're getting, so they see it as worth less. Then, once their discount is no longer available, those among them who really needed the discount have a strong reason to rationalize the experience as not having been that great anyway, since they can no longer afford it.
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But... weren't they already receiving bad reviews before Grupon?

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.
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From what have found working in restaurants is that whenever there is a sale or deal it brings in a different kind of customer. They are usually more rude, more demanding, and less satisfied.

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.
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