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Signing Up With Groupon Might Wreck a Business' Yelp Rating

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Photo: Technology Review

Computer scientists plugged in a bunch of data — specifically 56,000 Yelp reviews for 2,332 merchants who ran 2,496 deals — and examined the merchants' reputations before and after a Groupon deal. As the graph above illustrates, Groupon deals appear to have "to have an adverse impact on reputation as measured by Yelp ratings."

A few things might be happening here. 1. The businesses were spiraling out of control and signed up with Groupon in a last-gasp attempt to boost sales. Sort of like how a restaurant starts doing 2-for-1 entree night on Mondays. Always a bad sign. 2. Going with Groupon brought in a bunch of cheap, cranky Yelpers ready to write negative reviews at the slightest offense. Or 3. The businesses were so slammed by the foot traffic created by Groupon that the quality of customer service suffered, leading to bad reviews. Best guess is that in most cases, it's a combination of all three.

So basically: If your Yelp rating matters to you, don't sign up for Groupon.

· Groupon's Hidden Influence on Reputation [Technology Review]
· All Yelp Coverage on Eater [-E-]
· All Groupon Coverage on Eater [-E-]