Small Biz Has Little Love for Groupon

As Groupon shops around its company to investors, it’s not exactly winning hearts and minds of small businesses, with 70 percent claiming to "hate" the service, according to a new survey from iContact.

Out of the five social-media biggies reviewed in iContact's “Social Media for Business: Love It, Hate It,” Groupon was the most disliked in every category. In fact, 70 percent of small businesses were more inclined to hate Groupon. To clarify, the rankings were based on a 12-point scale that ranged from love to hate, so “hate” doesn’t necessarily mean loathe or detest, but it certainly means that the feeling is negative.

What do they mean by hating the company? It means “I don’t enjoy the conversations. It’s a chore, not a pleasure,” are the type of comments that sum it up.

Among the biggest haters were—big gulp, considering the company’s imminent plans to go public— financial services/investors, with nearly 80 percent in that group hating the company, the survey said.

The survey findings are being borne out in real life too. Groupon—already the target of critics for its S-1 filing misadventures—is losing its argument that it is similar to e-commerce giant Amazon as it meets with investors ahead of its initial public offering, slated for Friday.

“In terms of its progress toward a profitable enterprise, I think that’s a huge stretch,” Peter Sorrentino, of Huntington Asset Advisors in Cincinnati, told Bloomberg about the comparisons between the two companies.

As for the business poll, Groupon did a little better with companies that had more than 250 employees, with 36 percent giving it some love. Broken down by industry, only 33 percent of small businesses in the restaurant and 34 percent of those in the retail sectors loved Groupon. Its most favorable ratings came from e-commerce (50 percent loved Groupon), while its least favorite came from events (14 percent loved Groupon). For merchants who deal with Groupon or other daily deal sites, it's no secret that some have been disgruntled about their cut of the revenues, which is usually fifty-fifty.

Other social-media companies reviewed in the iContact poll fared much better, with Facebook getting the most envy-inducing scores. For small businesses with fewer than 50 employees, 74 percent loved Facebook, 64 percent loved LinkedIn, 54 percent loved Twitter, 49 percent loved Google+, and just 30 percent loved Groupon.

With the release of the survey, iContact has also put out a call to small-business owners nationwide to get to the bottom of why the love-hate chasm exists among businesses, and it is offering $25,000 to the best video describing their love or hate of Facebook, Twitter, LinkedIn, Google+, and Groupon.

So if you're in that 70 percent when it comes to Groupon, here's your opportunity to vent.

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Teresa Novellino writes for Portfolio.com