While daily deals on sites like Groupon and Living Social may offer businesses a temporary boost in traffic and online reviews, a new study shows that offering discounts actually generates lower reviews of the business in the long-term.
John Byers and Georgia Zervas from Boston University and Michael Mitzenmacher from Harvard University looked at approximately 16,000 daily deals across 20 cities offered between January and June of this year. They then collected some 56,000 Yelp reviews from 2,332 merchants who ran 2,496 deals. After analyzing the reviews, the researchers found that reviews that mentioned the coupons were 10 percent lower on average.
Reviews that mentioned both "Groupon" and "coupon" were 20 percent lower on average. The daily deals did increase reviews overall for the businesses.
What do you make of those findings? Do you agree with the study?