Running a Groupon? Expect a 10% Decrease in Yelp Rating
September 13th, 2011 • Posted by Spa Kat • Permalink
According to Launch Media, a study by computer scientists from Harvard and Boston University reveals that businesses running a Groupon or Living Social deal can expect a 10% decrease in their Yelp star rating.
The study beautifully illustrates what happens when businesses compete purely on price. Daily deals often result in unique, price conscious consumers who are less loyal and inconsistent. They are also more likely to give your business a lower rating. Ironically, Groupon won't work with many businesses until they have established hard earned reviews on sites like Yelp. It's a parasitic relationship that uses your online reputation to sell their coupons.
Daily deal sites might need to tone down their claims that these offers will help "jump start" a business because the deals deliver consumers who are less interested in a businesses and more focused on the price they'll receive for a specific product or service.
As we've said many times, these consumers get your deal one day and the next they'll be pitched a local competitor's offer. Add to it, newer businesses have fewer Yelp reviews so running a daily deal would likely skew their rating down farther than an established business. It's just not a great way to get valuable customers through the door.
• Trackback • Posted in General, Group Deals, Spa Marketing
Groupon and Yelp = bad for business. My spa has a very high customer rating due to meticulous attention to detail and providing our clients with best service possible….as a result all the deal coupon rackets are always trying to get me to do a daily deal cause my spa would look high end and high quality and add prestige to their daily deal website. Now I got a company from Canada calling on me, what will it be next? China? India? Russia? I did agree to do one with a local newspaper and less than 50% people redeemed. The deal "experience" did not entailed staff labor so I did not have to pay out any money. As far as Yelp goes, I advise to avoid them as their "review filter"is very prejudicial and back-arsewards. Had good clients leave nice reviews, but they were "filtered" or not shown because they have never ever left another review on Yelp, so they are discounted as unworthy to give a public opinion on my listing. On the other hand, someone left a scathing review about us and he has written over 60 Yelp reviews so his is 1 star review is front and center. He suggested people go to Massage Envy instead for a "real massage" even though the therapist worked at Massage Envy for 2 years. We suspect he may have pals who own a M.Envy and are annoyed at the abundance of genuine, authentic 5 star reviews we have on CitySearch, SpaFinder, Yahoo and Google. Bottom line do not patronize either of these self-serving businesses.
Thank you Jaedubb,your personal experiences in this arena are very insightful.
I agree with jadbuebb and I think that yelp and groupon should be reviewed by business owners..Not sure how that would work but if a site went up you can bet there would be plenty of comments..