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The effect of Groupon promotions on Yelp ratings

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Re: The effect of Groupon promotions on Yelp ratings

#21

Post by jsemrau »

astrodust wrote: post #19
sanj wrote: post #18

Whenever a Groupon deal appears at a place that I already frequent, my heart sinks a little. I know that I can look forward to crowded seating, poorer service, and harried staff for the next three months or so. I've thought about how to fund a reverse-Groupon: a service where I can pay places to NOT take part.

I want to fund a "GroupOff", the opposite of GroupOn. You pay more. Sometimes a lot more. Yet you get something extraordinary in return. What would that be? It's up to the vendor. It'd probably have to work something like Kickstarter if there were different premium perks, or just a one-shot thing. It'd give mid-range restaurants a chance (and budget) to pull out all the stops for a special VIP night, for instance. No…

>You pay more. Sometimes a lot more Well, strange concept. Since every experience at a restaurant is carrying a risk of not enjoyment, I guess many people would not be willing to increase their risk by paying more. On the other hand, usually becoming a regular should lead to better service.

An anecdote from my life. I never used to eat uni (sea-urchin) in my local Sushiya here in Tsukiji. However, at some stage the Sushi-chef recommended it to me free of charge since it was season and he wanted to offer me a special treat. Since I liked the taste I regularly add uni to my order. Just by giving me this one uni for free he increased his revenue from me by 10 USD.

[Edit] So the lesson's learned here should be "Know thy customer"

Re: The effect of Groupon promotions on Yelp ratings

#22

Post by drumdance »

JohnTHaller wrote: post #3

Interesting data and conclusions in there. And it's not really surprising given what I've learned about Groupon customers from their behavior at brick and mortar businesses owned by some friends here in NYC. They classify Groupon users as demanding+cheap, meaning that they aren't willing to pay full price for much of anything (and unlikely to return unless given a similar deal) and far more demanding (special request…

I think it depends on the business. A friend of mine is a Rolfer and she is very happy with the results she got.

Re: The effect of Groupon promotions on Yelp ratings

#23

Post by drumdance »

sliverstorm wrote: post #20
JohnTHaller wrote: post #12

Earlier quoted context omitted.

Most of my friends who use Groupon have automatically defended Groupon users and blamed the businesses without knowing any of the story. Most of my friends who use Groupon regularly are, honestly, kind of cheap (you know the ones... who always cause an issue at the end of eating out with a group of people when it's time to split the check and leave a tip). One business I know of had no predisposed opinion of Groupon…

Probably an important difference would be that while Yelp users are almost by definition looking for new experiences, Groupon users are likely to be either people looking for cheap new experiences, or people looking for any cheap experiences. I mean, be honest, if price wasn't regularly a big deal to you, would you spend much time on Groupon, where the options are drastically more limited? That is to say, the differe…

I use Groupon for experience discovery. I could spend time combing Yelp for new restaurants (and sometimes I do), but it's nice to hear about a new one through Groupon.

Re: The effect of Groupon promotions on Yelp ratings

#24

Post by jrockway »

This pretty much coincides with my experience; when I'm with a group of friends and we are using a Groupon, we get about 1 star less worth of service. (I've never used one on my own; I'd rather pick the restaurant on my own rather than being told where to go buy whoever happened to feel like buying an ad that day.)

That's why I don't get the Groupon hype. It seems like a way for businesses to pay money to upset customers. Probably a bad idea.

Re: The effect of Groupon promotions on Yelp ratings

#25

Post by bunderbunder »

drumdance wrote: post #23
sliverstorm wrote: post #20

Earlier quoted context omitted.

Probably an important difference would be that while Yelp users are almost by definition looking for new experiences, Groupon users are likely to be either people looking for cheap new experiences, or people looking for any cheap experiences. I mean, be honest, if price wasn't regularly a big deal to you, would you spend much time on Groupon, where the options are drastically more limited? That is to say, the differe…

I use Groupon for experience discovery. I could spend time combing Yelp for new restaurants (and sometimes I do), but it's nice to hear about a new one through Groupon.

Perhaps, but it also means that the pool of potential new experiences is being limited to businesses that just did a Groupon. I'm sure results vary widely, but in the aggregate that probably has implications for what can be expected of both the seeker and the provider of said new experience.

Re: The effect of Groupon promotions on Yelp ratings

#26

Post by JohnTHaller »

sliverstorm wrote: post #20
JohnTHaller wrote: post #12

Earlier quoted context omitted.

Most of my friends who use Groupon have automatically defended Groupon users and blamed the businesses without knowing any of the story. Most of my friends who use Groupon regularly are, honestly, kind of cheap (you know the ones... who always cause an issue at the end of eating out with a group of people when it's time to split the check and leave a tip). One business I know of had no predisposed opinion of Groupon…

Probably an important difference would be that while Yelp users are almost by definition looking for new experiences, Groupon users are likely to be either people looking for cheap new experiences, or people looking for any cheap experiences. I mean, be honest, if price wasn't regularly a big deal to you, would you spend much time on Groupon, where the options are drastically more limited? That is to say, the differe…

That is a very good point. In the one case (Yelp) they were advertising a good 'first visit' deal to folks who were already looking for their services. In the other case (Groupon) they were advertising to a group of people looking for cheap deals, not even people who were looking for their services. It is odd that the NYC business list (can't recall the name at the moment) is also a 'deals list' type of service and a similar discount to Groupon was offered but it had much better results. Checking them out myself at the time, the NYC business list seemed to be much more centered around getting a customer in once and keeping them as a customer and seemed to cater to a different demographic than Groupon.

Re: The effect of Groupon promotions on Yelp ratings

#27

Post by eggspurt »

Jabbles wrote: post #8
michaelhoffman wrote: post #7

Such a plot really needs error bars. It's possible that the difference is not statistically significant.

Error bars on what? The ratings themselves can be measured with perfect accuracy, and the results were averaged over 5000 merchants, so any error in the mean would be too small to see.

With error bars/lines on that plot, this discussion wouldn't have been needed. There are nice ways of doing error contours - showing the 1% quantile lines on top and on the bottom.
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