Monday, September 12, 2011

Are Groupon and Living Social Reputation Killers?

Is there a downside to going the social couponing route beyond the obvious financial hit?

Some Boston professors conducted a study, analyzing thousands of Groupon deals -- and then tens of thousands of Yelp reviews. They found that Yelp.com reviewers that mention the word "Groupon" in their review tend to rate an establishment 10% lower than the average. Those who mention both "Groupon" and "coupon" clock in with a shocking 20% lower rating.

I'm a bit skeptical on the findings. For starters, while it may seem that those using a Groupon should be getting better value out of the venue -- and hence handicap their ratings accordingly -- most are likely to rate the place based on what it would cost in real dollars. I see that as a problem, since many of these establishments are, in a sense, forced on the buyers. A Groupon buyer will go to a restaurant, spa, or store out of the obligation and deal. It's not like the non-Groupon customer that actually CHOSE to be there.

Check out the study if you want, and draw your own conclusions.

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