File this away in the obvious, but still fascinating drawer: A recent study has found that businesses who run a Groupon find their Yelp ratings tank somewhat afterwards.
The report, from Harvard University's Michael Mitzenmacher and Boston University's John Byers and Georgia Zervas concludes that "while the number of reviews [on sites like Yelp] increases significantly due to daily deals, average rating scores from reviewers who mention daily deals are 10% lower than scores of their peers on average."
How could this be? Well, simple. As merchants get deluged by more and more customers, it's tough to keep quality up. The result? People go complain to that great megaphone in the e-sky: Yelp. And human nature being what it is, people are far more likely to share their tales of woe as a customer scorned than tirelessly recount that one time they went to a bakery and the red-velvet cupcakes were good.
This also explains why attrition is often a factor with Groupons: Companies want to expand their customer base with them, but what happens instead is people try them once and don't look back. (This could also explain why Yelp scrapped its daily deals site.)
Read the full report here -- and while you're at it take a peek back at my interview with Yelp's director of business outreach, Luther Lowe, on how to handle online reviews.
