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Why do Daily Deal Customers Leave Harsher Yelp Reviews?

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By Eric Rodriguez

March 2, 2012

In September 2011, BU and Harvard students released a study suggesting that running a Groupon promotion lowers a merchant’s Yelp rating.

Their finding left us wondering two things: why does this relationship exist, and what, if anything, can restaurants do to minimize these negative effects? To address this, we researched why by analyzing 736 Yelp restaurant reviews across 75 restaurants where the reviewer cited using a deal voucher.
Our findings were consistent with the above study in that Yelp ratings suffer when merchants run “daily deal” promotions:

                               Deal Review Ratings vs. Overall Ratings
                         On average, deal-reviews are .5 stars below the restaurant’s overall Yelp rating.

                               Overall Impact of Deal Reviews on Restaurants

                         77% of deal-restaurants suffer an overall negative impact on their Yelp rating.

Two theories could explain why deal-diners write harsher Yelp reviews:

  1. Deal-diners are more demanding (and troll-like) than normal diners.
  2. The circumstances of running a “daily deal” promotion creates potential customer experience problems that otherwise would not exist.
While theory #1 may contribute to some degree, our research found theory #2 to be most convincing. We analyzed deal-customer complaints in reviews and identified two primary deal-specific problems:

Redemption Issues – The deal voucher was denied (in violation of deal terms or not found on the merchant’s voucher list) or improperly applied to the check.

Perceived Discrimination – The deal-diner felt that they received inferior service (or smaller portions) because they used a deal voucher.

“our server made such a big deal out of us having a Groupon … that it was uncomfortable. She acted like we wouldn’t tip her or something…”

Note: preliminary data from our point-of-sale tracking of deals suggests that the average deal-diner tips as well as a non-deal diner.

                               Deal Review Complaints
16% of complaints in deal-reviews are a direct result of the deal itself. "Standard Issues" are complaints in deal-reviews that are independent of the deal (e.g. "the food was too salty.")

In other words, the circumstances of running a deal created 16/84 = 19% more undesirable experiences than what a non-deal diners would have experienced. When there’s increased potential for things to go wrong, Murphy’s Law tends to take over.

There are certainly other variables involved to explain why deal-reviews are on average .5 stars lower than non-deal reviews, but a 19% increase in bad experiences for deal-diners must be a primary explanation.

The good news is that restaurant operators can take proactive steps to address these deal-specific issues:

Redemption – Simple Terms & Seamless Process

Keep the terms and restrictions of the promotion as simple and clear as possible. Any complexity or ambiguity will result in the lose-lose situation of either denying a voucher or accepting a voucher in violation of its terms. If you deny a voucher for any reason, a bad Yelp review could follow.

Consider technology to make the redemption process as seamless as possible (like point-of-sale voucher redemption). Remind waitstaff on how vouchers should be applied to the check.

Perceived Discrimination – Consider the Diner

Deal-diners can feel insecure and hypersensitive to the idea that a server may be judging them as “cheap.” Even if your waitstaff are genuinely not judging, it’s all a matter of the diner’s perception. If the server makes any gesture that can be perceived by the diner as judgmental, then confirmation bias kicks in and the diner’s fears and insecurities are realized. Bad tips and Yelp reviews ensue (oh, and losing the customer for good). Ensuring that waitstaff understands and respects these sensitivities can make a huge difference not only in protecting your Yelp rating, but in impacting the overall success of the promotion.

Have your own theories to why deal promotions often lead to bad Yelp reviews? We’d leave to hear about it in the comments!

EDIT: Was informed that the same individuals from the study mentioned in the beginning of this post also set out to answer “why.” Click here for their study.








This article was originally posted on blog.launchcopilot.com.

My interest is in bringing transparency to restaurant marketing practices, so I write here to share findings. I am a co-founder at Copilot. We enable restaurant operators to track the results of their promotional activity through the point-of-sale. With better information on how promotions perform in terms of customer spending, tipping, purchase behavior, and more, restaurant operators can make better decisions in designing future promotions. 

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Posted by Brian Carrick on 3/3/12 at 9:19 AM EST

The restaurant industry is a darned difficult one that makes many of go nuts at various times and the problem with customers getting snarky even though they receive superior or even better service, food, value, is mind-blowing but I see it as those without power elsewhere in their lives taking it out on us, their "friends." Chef Brian Carrick 40+ year foodservice professional
Posted by Eric Rodriguez on 3/7/12 at 10:21 AM EST

Brian - Thanks for your comment. That's true, it is remarkable how easy it is for someone to say harsh things about good people from the safety of being behind a computer screen. I don't think many negative reviewers realize just how harmful they can be. From what restaurant operators are telling me it sounds like it is increasingly difficult to get diners to air their concerns to a manager while still at the restaurant, where the issue can at least be promptly corrected. Any advice on how restaurant operators can better address customer concerns in the restaurant and before they get on Yelp?
Posted by Brian Carrick on 3/7/12 at 10:32 AM EST

The old-fashioned way: print a standardized form and give it to all of the servers asking them to fill it out anonymously and drop both it and a business card or name and number into a pot by the door on their way out. Tell them that at the end of the week when management looks at their comments, they will draw one business card out of the pot and give that person a free lunch for two. Generally, we write these things off because they are promotions and you would be surprised at how many people give you their honest opinions when they think they have a possibility of getting something for nothing. The winning card is put up on a board by the door and this causes repeat business week after week. It also is much cheaper than hiring a local PR firm to spend tons of money doing something you can do for the cost of EIGHT free meals per month. At least, it has worked for me in the past at several places here in California, in Hawaii, and in Washington State. I learned the concept from an old chef back in the 1970s who explained the idea of getting information by giving people a chance to win something relatively inexpensive. Of course, the free lunches come from the special menu and not the regular menu.
Posted by Jordan Hedrington on 3/7/12 at 10:48 AM EST

Daily Deals Customers are bad customers to begin with. They have no loyalty, and the only reason they are dining is because of the deal. They naturally want to spend as little money as possible, and they feel that they deserve to get everything for nothing. So, when/if there is a minor issue, their lack of loyalty, and their 'I deserve the world' attitude is the perfect storm for bad reviews.
Posted by Eric Rodriguez on 3/13/12 at 6:02 AM EST

Thanks for sharing that advice, Brian. I think your approach to gathering customer feedback makes a lot of sense, as it incentivizes desirable behavior. As I mentioned below to Stephen, operators interested in re-directing potentially negative Yelp reviews also might find Google's TalkBin to be a compelling service. It is a means for more tech-savvy (ie. likely Yelpers) customers to voice comments/concerns to the restaurant owner while they are dining (even if the owner is not on site). It is anonymous and private, preventing grievances from being aired publicly and giving the owner an opportunity to address it quickly:



Certainly some of the daily deal customers fit what you're describing, but one phenomenon at play here is that operators are succumbing to confirmation bias in their perception of deal-customers. That is, operators *expect* deal-customers to be cheap, and inevitably in any population of 1,000 diners, some of them will be cheap. The operator will hardly notice the deal-customers who exhibit normal dining behavior, but as soon as a few cheap customers dine there (ie. bad apples, sore thumbs), they say "I knew it! They are all cheap!" This is the confirmation bias, and it skews the overall perception of deal customers to be a little more negative than it really should be. In any large population of diners, some will be awful, most will be normal people, and some will be right on target. It's the same thing for deal customers. One piece of hard evidence I can provide is that on average, deal customers tip just as well as non-deal customers. Yes, some of the deal-customers probably left awful tips, but if you take the average of the whole, you'll find them to be much closer to normal than many would expect. This data is based on our findings from a few restaurants that we've studied so far, so we'll see if that finding holds up across tens and hundreds of restaurants.

Posted by Hanady Burkett-Awada (Burkett Restaurant Equipment) on 3/13/12 at 8:52 AM EST

Great article Eric. It has many valid points. I've stopped going to a few of my favorite restaurants because Groupon deals that they ran decreased their quality of food and service. I never left a negative Yelp review, but I wonder how many regular customers stopped going to their favorite restaurants because of a poorly managed Groupon deal period without leaving a review......

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