Groupon May Hurt Businesses’ Reputations
Sites like Groupon, which offer discounts to customers, are everywhere these days. Everyone from dance studios to upscale restaurants seem to be have deals on these sites, but you may want to think twice before offering a coupon for your business.
A new study by researchers at Harvard University and Boston University reports that promotions on sites like Groupon can damage a company’s reputation. The study examined the correlation between Yelp reviews and Groupon deals. Before offering a deal on Groupon the average Yelp rating of the businesses in the study was 3.71 stars. After running a promotion on Groupon the average rating dropped to 3.59 stars.
The study did not indicate why businesses that use Groupon often receive lower ratings. Groupon and other sites offering discounts on goods and services seem like a great marketing tool, but this new study suggests promotions on these sites may hurt businesses’ reputation.