How local businesses using Groupon are attracting bad reviews?

Businesses using Groupon are attracting fair share of bad reviews along with the customer traffic to their business. The easy come easy go groupon effect has left businesses wondering about the long term usage of groupon and other daily deals sites. Advertising coupons and giving out small coupons to bring returning customers is one thing, but using coupons as the business model for your business is the road to crash course in brain surgery (it is almost a thumb rule in business).

These are some of the papers already published discussing the relationship between online reviews and reviewers who were using daily deal sites like Yelp. Below are sample points from the study

Here are some of the key points from the study

1) Good news! The reviews are real. Most of the people who say the word "Groupon" in their reviews seem to be pissed about their experience.

2) Most businesses get business through Groupon by using attractive coupons that promise the world to the customers for a super low price. Of course, the shiny ads attracted customers, but I think the customers world wasn't as pretty once  they saw what was on the other side of the coupon.

3) It shows how the U.S small business economy responded by  trying to attract customers at any cost. That cost proved to be decrease in customer experience. 

4) Customer acquisition is good for business. But to maintain a healthy competition and a healthy online space, is it good to go to any lengths to get extra customers?

Is your business attracting new customers using groupon? Have you heard of customer retention? Do you know that if you retain all your customers you will always have customers and the cost of acquiring new customers is always high (at least in the long term after Groupon Wave passes)? As opposed to "seasonal" or "pay for hits" marketing,  it is always important to have permanent online assets which will bring you customers in the long run. Such a online building takes time, lot of effort and strategy which sometimes need professional help. KeepCustomer is one such customer retention company that will take care of your entire online strategy and put you in control for permanent success.

Notes: the graph and ideas came from this blog

80% Customer complaints come from 20% of your customers? Part 1

Complaints are bad, simple. Not only do they consume time, it also means we are spending extra time and resource for a piece of work that was already supposed to be "finished" (apart from further damage that can come from word of mouth). We know from experience that no matter how big a corporation is, the customer service can only go so far in satisfying the customers. But if very high number of your customers are usually satisfied, then it is safe to say that you can keep your business running (at least for now haha).

With Internet and social media in everybody's lives, customer complaints about businesses are reaching far audience and new searchers who are looking for information on the Internet. These complaints reach people through review sites, complaint boards, public forums, rating sites, social media sites, blogs and various other ways people share their experience (Google, yelp, facebook and twitter being the biggest playgrounds). It is impossible to deal with them on a daily basis, and it is more so difficult to control because of the freedom of speech on the Internet (well that could well be gone if SOPA and PIPA are passed!). Bottom line--more people read about a business online now a days, and if your customers are talking about you on Internet, you might be losing business just because of that. It is not a joke, a single click of a button with a unhappy client can put your entire sales staff look stupid!

So if 80% of those complaints are coming from 20% of the customers, and assuming some of the complaints aren't really truthful, how do you handle them especially when you know a lot of them have no ground? There is always a chance that competition might have a role to play in this, but do you hire somebody to monitor and analyze this? (It would be another topic to discuss how are the reputation management companies faring in that department--do all of those really have the skill set needed to monitor and analyze?). What other factors are responsible for consumer complaints? Are businesses measuring the severity of the complaints(later "damage" if reproduced online or via word of mouth), so that the impact of the complaints can be minmized to improve business.