Groupon deals found to pull down scores on Yelp reviews
Wednesday 14 September 2011
Is Groupon the death knell for restaurants?
According to the meticulous analysis of three computer scientists from Harvard and Boston University who combed through 16,000 offers from daily deal sites like Groupon and LivingSocial and 56,000 Yelp reviews, the presence of posts that contained either the keywords "Groupon" or "coupon" were associated with an adverse impact on their score.
The study, reported by Technology Review on Monday, found that while the volume of reviews on Yelp.com increased and gave businesses a larger online presence, any mention of the words "Groupon" and "coupon" seemed to pull down the business's rating.
Scores averaged about 10 percent lower among businesses that offered daily coupons compared to those that didn't. Reviews that mentioned both those words also lowered the business's score by 20 percent.
"This could indicate that a more critical audience is being reached, or that the fit between the merchant and these new customers is more tenuous than with existing customers," researchers said.
The data was collected between January and July this year, spanning 20 US cities and involving 2,332 merchants.
Researchers also plotted the 'cascade' effects of Facebook and Twitter in the social spreading of daily deals, but stopped short of any conclusions that would translate "likes" to actual purchases.
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