Behavioral Science

Your Business Needs To Be On Yelp And Here’s Why

by . October 21st, 2014

“I don’t always agree with the restaurant critics in the Times or elsewhere, but I trust them—in the way that I trust certain critics of film, television, art, or literature,” writes Hannah Goldfield from The New Yorker. “The relationship between critic and reader is exactly that: a relationship, between two people.

“You can’t have a relationship with stars.”

In her essay “The Crowds vs. the Critics“, Hannah talked about the differences of Michelin and Yelp’s reviews versus those of restaurant critics such the Times’ writers. For Yelp in particular, she said:

“Yelp reviewers tend to offer unimaginative, useless notes like “The location is great, service is superb, and food is epic.” Why would anyone seek out advice on where to eat from people who can’t come up with anything better than that?

Why indeed?

Critics of Yelp consider reviews from the site as highly biased and often obsessed with the trivialities of establishments. A recent thread on reddit even capitalized on this by showing one-star Yelp reviews on National Parks that are tragically hilarious.

yelp national park

 As someone who owns or plans to put up a small business, especially in the food or service industry, you might have thought of putting your business in review aggregator sites such as Yelp. Part of building a relationship with your consumers involves getting feedback from them and implementing those feedback.

In a 2011 study published by Harvard Business School, “Reviews, Reputation and Revenue: The Case Of Yelp.com,” they found out that “a positive evaluation on the popular review site Yelp.com does, in fact, appear to lead to increased business for restaurants.”

Drawing from 2003-2009 data on Yelp and Seattle restaurants, the report concluded the following:

  • A one-star increase in Yelp rating leads to a 5-9 percent increase in revenue,
  • This effect is driven by independent restaurants; ratings do not affect restaurants with chain affiliation, and
  • Chain restaurants have declined in market share as Yelp penetration has increased.

In relation to this study, the 2014 Local Consumer Review Survey by SEO site BrightLocal found that 88% of consumers surveyed have read reviews to determine the quality of a local business. 39% read reviews on a regular basis. And only 12% do not read reviews.

The study also found that 7 out of 10 customers take positive action after they read reviews. 57% of consumers will visit a company’s website after reading a review.

So it seems that there isn’t really any reason not to put your business in Yelp.

What’s stopping you?

Enter Botto Bistro, self-dubbed the Worst-Rated Restaurant on Yelp. According to the restaurant owner, Davide Cerretini, the restaurant got more negative reviews than usual after he stopped advertising on the site.

For a fee, Yelp offers advertising a business for relevant search queries on the site. Cerretini claimed to receive 15-20 of these calls per week.

In retaliation, Botto Bistro started its “Hate Us on Yelp” campaign. The restaurant encouraged its consumers to give them one-star ratings and receive 25% discount on their pizza. (which they since discontinued after getting their one-star rating.)

yelp botto bistro

Photo from Botto Bistro’s Yelp page

It is a classic story of a victim getting his comeuppance on the big bully. People would always be eager to cheer on the underdog, with this particular case resulting in hilarious tongue-in-cheek reviews. And of course, the publicity on the restaurant itself.

But the stunt also revealed the frustration of small business owners on the site. Yelp has been alleged to be manipulating star ratings and review rankings in exchange for advertising. All of which are denied again and again in Yelp’s official blog, citing the Harvard Study mentioned above.

The study concluded that 16% of Yelp reviews are fake, resulting from businesses trying to game the system. Some businesses may solicit positive reviews from families and friends, but some pays third parties to nudge their rankings upwards.

Yelp’s algorithm claims to filter these kinds of reviews, using factors such as the user’s number of reviews, friends, IP address, and site activity. It may be that the site’s sneaky Mafia tactics against its consumers may in fact be the other way around.

people hate us on yelp

Photo by danoxster

Yet, the anecdotal evidence piles up, even flooding into Yelp CEO Jeremy Stoppelman’s AMA on Reddit. And the Yelp Extortion Conspiracy debate goes on and on.

To Yelp or not to Yelp

There is no doubt that Yelp and other review sites are useful tools in creating an online presence and nourishing your community. As a tool, its benefit depends on how you use it. The allegations on manipulation would always be there as long as there isn’t any transparency in the part of Yelp.

So how can you make the most out of Yelp?

  1. Know your consumer. All marketing classes and business books would tell you this over and over again. Sufficient knowledge on your target market would create a more targeted experience. The modern consumer is critical of information and will not easily be swayed by one positive or negative review.
  2. Set-up your page in a concise but informational manner. Consumers looking for reviews are usually near the end of their purchase path. Displaying critical information such as prices as well as contact details is essential for their evaluation. Try to display pictures in order to entice them to a positive response.
  3. Respond to reviews, both positive and negative. Show your consumers that you are active within your community. Give your due appreciation to positive responses and address the problems on negative ones. Respond to the customer both publicly and privately.
  4. Try to incorporate the feedback given into your business. This would show your consumers that you value their feedback enough to change the way you do things. However, make sure that doing such would be beneficial to your business overall image.
  5. Do NOT game the system. Security checks are in place in order to have an objective (to some extent) rating on your business. Do not pretend to be someone else, or ask your family and friends for a positive review just to increase your rating. Do not be this guy. Cringe.

Yelp may not have the elegance and sophistication of professional reviews, but the raw and direct-to-the-point approach of Yelp reviews can give your potential consumers the sense of belongingness that they could connect to.

Your consumers may not have a relationship with stars, but you can create a relationship with them.

CHECK OUT: Using Big Words Makes You Feel Smart But Look Stupid

Do you have your business on Yelp? Share us your thoughts in the comments below.

ABOUT THE AUTHOR:

Kevin is a reader first, a writer second, and a gamer somewhere in between. When not rooting for Tyrion Lannister for the Iron Throne, he's probably writing some morbid short story. He enjoys some surreal art, clever advertising campaigns, and a warm cup of coffee while reading Murakami.

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