Relationships among Minimum Requirements, Social Media Sharing, and Deal Outcomes

E-marketers commonly link sales offerings and social media.  But what are the relationships between sales offering characteristics, social media linkages, and offer outcomes?  The empirical research presented here demonstrates how to analyze these relationships for one major daily deal site, Groupon.  One unique characteristic in Groupon deals was a minimum requirement option, that is, a specified number of coupon “sales” which must be achieved before any sale is confirmed and redeemable.  Using time-stamped empirical data we collected electronically, we apply a propensity score (quasi-experimental) approach to analyze causal effects for four major retail categories.  We find that the presence of a minimum requirement increases Facebook likes, quantity of coupons sold, and total deal revenue at the time point when the minimum requirement is met and at subsequent two hour intervals until the end of the deal promotion.  A key finding is the initial differences caused by the minimum requirement not only continue, but actually increase, over the life of the deals.  We conclude that minimum requirements facilitate consumer social interactions, which further increase deal outcomes for retailers.