Groupon Deals Could Hurt the Reputation of Your Business

That innovation, from computer scientists John W. Byers and Georgios Zervas of Boston University and Michael Mitzenmacher of Harvard, finds that ratings scores on Yelp for businesses running daily deals are 10% lower on average.

“The average drop in ratings is 0.12. This could affect any sorted order produced according to Yelp rankings significantly,” the report says. “As well, Yelp scores are reported and displayed according to discretized half-star increments. Along these lines, an average drop of 0.12 suggests a significant number of merchants may lose a half-star due to rounding. This could have a potentially important effect on a business; a recent study reports that for independent restaurants a one-star increase in Yelp ratings leads to a 9% increase in revenue. But, the transitory nature of Groupon-driven reviews, to boot to complexities of modeling hidden factors like weighted moving averages, cloud our ability to pinpoint the repetitional ramifications precisely.”

While the findings may turn some businesses off of the Groupon strategy, the news isn’t all bad for Groupon these days. Another report released by Yipit finds that Groupon’s revenue increased by 13% in August, during it gained 2% market share.

Groupon is now testing e-commerce deals in the UK. This could provide a whole new set of opportunities for business. For brick and mortars, it could lead to more online sales. For strictly online businesses, it could simply let them into the club. Getting repeat business from a consumer might be easier to achieve online. If you’re a click away, as opposed to a drive away, a customer might be more inclined to come back, given the right customer experience. ”

Do you think the benefits outweigh the negatives for businesses offering deals through Groupon or similar services? Tell us what you think.

I think if a company uses any ‘deals’ company for the sale of its products or services it needs to be careful about the impact. I have used Groupon and others to sell services that we can provide while a time in the day when our staff have to be there and are being paid anyway however have little to do. The costs associated with these deals for us, is negligable, it just makes our day more profitable. If on the whole, we started to use these for other services that would require bringing in staff at a cost, at that time the sums need to be looked at very closely. For me, I sold a huge number of deals, making very little on each yet in the current economic climate which has hit our business hard, it helped our profitability immensely by utilising staff hours and hitting a market we would not if not have reached.

Timely article as I am considering coupons from one of these companies for my software product.Nevertheless, if it would damage my business I would have to think again.

The biggest rip off for a business

Groupon is the biggest rip off for a business. They sell the merchants on future business by compromising current profits. If merchants keep giving these deep discounts, there won’t be a future for their business.Brand image will as well be reduced. The only winners are Groupon and the bargain hunters. And with the availability of social sites who needs Groupon?

we have the expertise in many fields and having industry best faculties with us. Our expertise in Online Marketing and Search Engine Optimization, Adword,PPC and SMO make us the best from others. As we defined, we have a group of professionals for providing the industry’s best training to the students as per new and latest research trends prevailing in market. Some of our trainers are belong to great brand names in industry just as Google and Adobe.seo training institute in ncr

I would guess that most small business owners do not give the necessary time to plan a Groupon. It is not something that only takes a few minutes to be successful. I have purchased over 25 Groupons and Daily deals and zero small businesses have tried to get my contact info or follow up with me. That should be the minimum for any small business running a Groupon. There should as well be plans involving employees and regular clients.

Permanent marketing strategy

Groupon is not a permanent marketing strategy, nevertheless smart business owners are to make a lot of money in the long-term. In other respects, smart business owners would push for their best clients to post reviews afterwards a Groupon to offset any negative reviews and bury them off the main page.

Hello:I will be using Google offers this year for my business. yes they do take a lot of your profit to advertise with any of these special offers, nevertheless I look at it as a possibility to meet customers I would never had definitely. So things cost money, everyone gets their cut, it is up to me to make more connections and opportunities for my company.

The whole in their infancy

I believe discount sites are on the whole in their infancy, and as they continue to evolve they will come to realize which businesses should be targeted for their target audience’s needs.

Very interesting nevertheless there’s a new player in the game. The name is Qzanza, the marketing arm of AdzZoo. The have several innovations which may appeal to more business and those who complain about Groupon & Living Social.

The offer again with Groupon

I am now considering running the offer again with Groupon, however have found a way of increasing the revenue and/or reducing the overheads on the Groupon clients as things now stand a bit soul-destroying doing so much work for so little money, in spite of the long term benefits.

It is not worth it for me to run a groupon. If I had a class full of groupon students I would lose on average $45 a class not counting my time and energies. Groupon is for desperate businesses to raise cash.

I agree, Yelp is a total waste of time, if you do not own a brick and mortar business or advertise with them you do not get much at all. So why not put some pressure on Yelp instead of discounting discounting!

“Public is duped again.”Any business owner knows margins have to be made up somewhere by volume or repeat business pushing higher priced items and making up for the discounted ones. Any smart business owner needs to proceed with caution when using coupon sites like Groupon. Your reputation can get slammed in a heart beat and frankly many consumers who use coupons want to “squeeze blood out of a turnip”. They want the best customer service, products and experience although the owners budget doesn’t allow for it since he had to offer his products or services at a discounted rate.It’s my contention this whole coupon craze or fad is going to quickly run its course like a multi-level marketing possibility or it’s similar too a ponzi scheme nevertheless not as bad for the moment you may get a body in the door. Whether or not they will continue to buy remains to be seen.

I think if you’re going to write an article on the benefits of giving coupons to recruit new clients, they should conduct the innovation by a marketing organization that looks at the earnings of the establishments, to put it more exactly than computer scientists who studied the Yelp star ratings and the revnues of Groupon/Living Social, etc.

No doubt, who takes those rating folks seriously definitely. They strong arm business owners into purchasing their services and if they don’t they HIDE positive feed-backs from store owners.

We signed up to Groupon 3 weeks ago and made sure we had a cap on the amount sold because we knew we could only service 1 a day for 3 months. They put us on as a side-deal. It sold out quick and was very happy until we have had to refund 10% because the customer did not read the terms and conditions about where we travel too.Nevertheless so far, out of all the clients we have served, 3/4 are repeat clients and we had other new clients who missed out on the deal! So this has been amazing for us and costly because of staffing costs yet much cheaper than any other form of advertising or marketing in such a short space of time. We have doubled our sales and customers!I think the reason its been successful so far is that we are a domestic service and the customer has been wowed by the results and our caring nature. So the key is to aim for low numbers from 60 deals bought.Lets hope the groupon’s to come, all in all provide us with the increase in business!

Hopefully businesses trying Groupon thought through if these deals help them long-term: do they want bargain hunters as their customer base? will they get repeat business from them at regular price? are they prepared to provide great customer experience at 50% off? Friend just complained that none of her Groupon deals in Vancouver felt like deals — she felt that she was duped and in fact overpaid at the end. From the customer experience point, the businesses that dressed their offering to look like “deals,” lost their possibility. Everyone should be adequately paid for what they do, nevertheless if you offer a “deal,” do it genuinely, think long-term.

Personally my employer is not involved, nevertheless I have friends who own businesses in the service industry. Hair salon, Day Spa, coffee shop, they did not like their experience with using Groupon. Saw some new faces, lost money on the deal, yet no repeat business. They said they would never do it again. It is exciting to see foot traffic increase, even for a short period of time, all things considered, your doors are open to the public, and it is better than having employees sitting around, nevertheless at the end of the day, week or month, is sales are not up, at that time it is a marketing tool that must be discarded. On to the straightway great idea.

The customer experience might be negatively affected if a business sells too many Groupons. On the spur of the moment they are inundated with new business they may not have been ready to handle. Some of the clients are bound to have a poor experience because the merchant can’t be 100% perfect every time someone uses their Groupon. It might just be a case of more clients means more times to mess up.