Will “Daily Deals” Hurt Your Small Business Site’s Reputation?
The number of daily deal sites like Groupon and LivingSocial continues to grow but research shows that deep discount offers may be doing more harm than good for a small business’ on-line reputation.
According to a study by Boston University and Harvard University, small businesses that run ‘daily deal’ promotions on Groupon are likely to see their ratings on Yelp drop thereafter.
The data gathered included over 56,000 reviews for 2,300+ merchants who ran 2,500 deals on Groupon. The analysis seems to show the two sides of the deal-of-the-day website – from one perspective, the number of reviews for the business on Yelp goes up because of the daily deals (which for some could be seen as a good thing). However, the average rating scores from reviewers who reference daily deals are 10 per cent lower than scores coming from “business as usual” reviews.
There’s no explanation offered for why the customers using Groupon gave less positive reviews on Yelp, and the report leaves business owners pondering the question: is it worth running daily deals (expensive but can bring in new customers), if it’s at the expense of a lowered on-line reputation on user review sites like Yelp?
