5 Things You Absolutely Need to Know as a Business Owner on Yelp

Love it or hate it, just about every small business owner now has a business page on Yelp. With 142 million unique users per month, Yelp is one of the hottest marketing spaces online, competing with the likes of Google and Facebook. According to a Nielsen study, Yelp isn’t too bad at driving sales either – 4 out of 5 Yelp users stated that they visit Yelp when prepared to spend money and 35% of Yelp users will visit a searched business within 24 hours of searching. Cha-ching!

So, should a small business owner jump at the opportunity to partner with the trendy review site? Not so fast. Unfortunately, Yelp has racked up a questionable reputation over the years due to lawsuits that accuse the corporation of shady practices such as extortion and manipulated reviews. Horror stories of Yelp proliferate the internet, even inspiring an upcoming documentary about its alleged business practices.

Download our free retail customer loyalty success guide to learn how to drive customers back 2x more.

This doesn’t mean you should avoid the site completely; in fact, you should do the opposite and try to understand it. To help clear the waters, here are 5 questions and things you should absolutely know about Yelp as a business owner. This info will demystify the review site and let you determine for yourself whether you want to invest in Yelp as a local business.

1. Users find information, post photos, rate stores, and write reviews on the business page, but what exactly does a small business owner do on Yelp?

Good question. While Yelp is targeted to consumers, there’s a lot your business can do on the site. First you have to officially claim your business listing. Your business might already exist without you knowing and you don’t want a stranger writing your business profile.

After your store is verified, you should then make sure your page is up-to-date with accurate information, like your store phone number, address, menu items, etc. The more information you provide, the more reasons customers have to make a visit! You can also optimize your SEO (search engine optimization) by adding in keywords about your business, just like you would do on a website. Doing this will give you useful information such as demographic information about reviewers and number of site visitors through Yelp’s analytics page that you can use to understand your market better.

5 Things You Absolutely Need to Know as a Business Owner on Yelp

 

FUN FACT: Contrary to popular opinion, restaurants are not the most dominant business category on Yelp. According to a recent Yelp report, shopping is the biggest category at 23%, so if you own a retail store, time to get on board if you aren’t already.

Find out more here: Yelp for Business Owners.

Download our free small business customer loyalty success guide to learn how to drive customers back 2x more.

2. Now that I have officially claimed my business page, what should I do to encourage positive reviews?

Positive reviews should happen organically because customers love your store! Yelp does not recommend that you ask customers to write reviews or bribe customers with discounts – huge no-no. However, you can still attract customers to your Yelp page by putting a link to your page on your website, on your email signature, social media, and by encouraging people to check-in to your store. The key is to spread awareness and engagement.

As for an insider tip… While it’s debatable whether customer service is the most important aspect to a business, it does make an impact on Yelp. A Yelp study shows that if someone had a good customer service experience, they’re over 5 times more likely to give a 5 star review on Yelp! Make your customers feel special and reap the rewards.

5 Things You Absolutely Need to Know as a Business Owner on Yelp

FUN FACT: What’s the secret to the “People love us on Yelp” decal on store windows? They have to be earned. Yelp gives them out once per year according to the history and rating of each store. If you feel like you qualify, you can also try applying for one here.

3. I love the positive reviews I’ve been getting, but is there anything I can do about negative reviews?

Yes! Business owners can, and should, reply to these reviews. Yelp also provides an option to respond to reviews privately, which gives you an opportunity to not only resolve the issue, but establish goodwill with your customer. Be sure to ask if they are satisfied with the outcome and if they are willing to revise their Yelp review, so there isn’t a lasting negative impression on your page.

If this does not work out, you should respond publicly, in a level headed fashion. Yelpers are likely to read both the negative review AND the merchant’s response before making up their mind. By explaining the situation and how you have dealt with this privately, you can make the situation work in your favor by showing that you do care about your customers.

5 Things You Absolutely Need to Know as a Business Owner on Yelp

FUN FACT: While Yelp has a reputation to be a space for complainers, 67% of Yelp reviews are actually 4 stars or above. Don’t be turned away from a few bad apples; Yelp can be an awesome way to boost your public image online.

4. Why are some Yelp reviews removed and added to a “not recommended” section at the bottom of every business page? Can I remove negative reviews from this section, even as an advertiser?

“Not recommended” reviews are reviews that Yelp suspects are biased and filters based on their automated software. These reviews are only accessible through a tiny link at the bottom of every business page. This practice is one of the main reasons behind much of Yelp’s controversy around extortion.

Can you pay to remove the negative reviews from the “not recommended” section? The short answer is no. Jeremy Stoppelman, CEO of Yelp, writes: “Advertisers never get special powers to remove a negative review, add a positive one, or move reviews around on their page.” Business owners cannot change the content on their business page.

5 Things You Absolutely Need to Know as a Business Owner on Yelp

FUN FACT: About 22% of “biased” reviews are filtered into “not recommended.” What does Yelp consider a biased review? Reviews from Yelpers with little activity, reviews from the same computer, and reviews that are too extreme on either end of the spectrum. Sound unreliable? Many legitimate reviews do end up hidden for this very reason.

5. Now for the big question: I’m done with all of the free options on Yelp and I’m ready to do more. Is Yelp worth my marketing dollars?

That depends on, well, a lot. For one, you should know that advertising on Yelp will cost $350 minimum to have your business sponsored on search listings. This means it is 1,000x more expensive than your average online advertising. According to MarketWatch, a recent Pacific Crest report deemed that ads were not only expensive, but also overpriced: “On average, independent restaurant operators spend roughly $7,200 a year on local advertising, compared with $4,600 in revenue on Yelp.” Ouch.

But, there are also arguments that suggest advertising might be worth your buck. For instance, this TechCrunch writer, argues that while the price of ads are expensive, they should be seen in context to Yelp’s unique online space, especially for expensive services. “A single visit from a customer could earn an advertiser hundreds of dollars, their long-term business could be worth thousands, and they’re unlikely to switch if satisfied . . . they could earn significant long-term ROI.”

With this information at hand, hopefully you now have a much better understanding of how Yelp works for small business owners and can make a decision that is right for you!

FUN FACT: Whether or not you decide to go with advertising, keep a sharp eye on your store rating. According to this Harvard Business School case study, every star in a review leads to a 5-9% difference in revenue. That’s a lot of money lost on one little star.

Is your business on Yelp? What are your thoughts on the review site?

Images courtesy of Yelp and Flickr.

Diane Kim
About the Author
Diane Kim

Diane Kim is a Content Marketing intern at FiveStars and a senior at Yale University. When she's not writing for the blog, Diane enjoys reading, traveling, and eating Crunchwrap Supremes.

17 Comments

  • Yelp is a scam. As a small business owner, I never heard of yelp until my franchise marketing people thought it a good idea to sign up. I signed up both my small businesses. 1 store open 2+ years has only 3 reviews(all 5 stars, last review over a year ago). My other store opened 4+ years has about 70 some reviews. 25 not filtered and 45 filtered, so that throws out Yelp’s statistics(more filtered than not filtered). My take on Yelp is their software is not smart enough(lacks logic and common sense) to figure out a good or fake review(check out their disclosure about that point). I’ve had a few customers write good reviews however they were flagged, so they told me they’d never use Yelp again, why bother, since it’s a waste of time? My Stores get hit up every month from a Yelp Sales person giving me the same BS as above. So if the software that isn’t smart enough to figure out a good or fake review fails, good chance the software that figures out their statistics is bad too. I work in the software/web world(25+ years) and know there are tools that automate clicking on websites to show high numbers. And I’ve created 5 dummy Yelp accounts so I could private email other anonymous Yelpers. Found out that Yelp Marketing people do write good and bad reviews, even though they claim otherwise.

    We have a new customer form which all new customers fill out and not 1 has ever checked off Yelp. Of the 70 yelp reviews between 2 stores, only 1 or 2 Yelpers still write reviews. 99% haven’t written a review in over a year or two(or they created another identity and use that). That’s the kind of analysis that shows Yelp is a scam(extortion). I have 3 reviewers that gave us 1 star and never written another review. I Have about 20 5 star reviews with at least 3+ reviews all filtered. Explain how that is good for business?

  • Hi Joe,

    I completely understand your concern with Yelp; I know that many small business owners express the same sentiment. By no means am I encouraging anyone to pay for their services. I was hoping that my article would simply provide helpful information to anyone who was curious about the review site since there are many people who use Yelp to decide whether or not to visit a store.

    Best,
    Diane

  • That’s really not what I wanted to hear. I just got my business on Yelp and was really wanting it to be an asset … I haven’t had enough time yet to see an increase or decrease in sales, not to mention reviews, good or bad. Damn ! Sounded good at the time. This may be the beginning to the end of my little business… It’s not sounding very good. I wonder if I could read a positive, REAL review about Yelp ? How does one know what to believe these days ? I’m starting to think it’s ALL B.S. !!

  • I will agree w/ JOE above.

    Even though I haven’t done an extensive research on the subject matter as he has, I can speak from personal experience. When I bought my restaurant I fell into the sales pitch of paying a (high in hindsight) amount of money for a Yelp ad and video that after reviewing didn’t really think it was that big of a deal. Although I insisted of doing a 6 month deal they locked me in for a year and wouldn’t release me. During that period of time I was getting consistent 4star and 5star (and occasionally a 3star) reviews left and right. When I decided to STOP advertising w/ them, surprise surprise, I started receiving negative reviews and 1star reviews!!! I started panicking, blaming my staff, my managers, etc. I was so disappointed on myself. Then I started analyzing. I responded to every single one of the negative reviews. Offered these people free meals, etc. or even INTELLIGENTLY attacked the ones that just wrote bogus stuff. I didn’t get any responses…. If those “yelpers” are such “high volume” yelpers as they claim to be in those profilers, wouldn’t they respond one way or the other? Wouldn’t they either agree to give a small business another chance, or just go on a rampage publicly defending themselves after I made them look ridiculous on all the points they complained about? But it was like poking at a dead animal…. The only research I did was to look for these people’s profiles and search social media for other profiles they may have on FB, Twitter, Instagram, or anything… Surprisingly again, I couldn’t find them. How come those particular people have a Yelp account but no FB or such??? I agree w/ JOE, and DEFINITELY believe that Yelp Marketers write review….
    On the other side, I will say that people read and see yelp. So unfortunately it’s a modern day tech Mafia that you have to use and advertise with, because it’s much more difficult to try and go against them. I wish there was an alternative…..

  • YELP IS A SCAM!! No other way to say it. I’ve had more suppressed positive reviews to know that they would rather have a negative review string until you give them some money. It’s all about the mighty dollar here. I’ve officially complained to the BBB and they refuse to listen or do anything to help. Even the BBB doesn’t care. Now I just want my business removed from Yelp. But they say “it’s a matter of public interest.” I wish someone would sue their socks off.

  • As a small business consultant I have heard the best and worst of Yelp. Do your due diligence before signing on the dotted line and research other marketing options.

    Jcolome

  • Totally agree with Joe and Scott. Yelp seems to enjoy posting only the negative reviews. Why can’t they at least simply put them all on the same page for everyone to scroll thru and read at their own discretion. But no, they wanna play judge over business owners. Fine then. They’ll never get any of my money.

  • Yelp stops sending you calls unless you upgrade your advertising. We made the mistake of going to a paid plan and our calls ground to a halt. Yet we keep getting the same sales guy calling monthly to ask us to upgrade to the next level. Which we would never do since our calls from them went to a total of 0 from the 100+ we would get a month on a free account.

  • About 2-3 weeks ago, I signed our pizza restaurant up with Yelp. The sales person did a great job in overstating the revenue that we would receive from our Yelp advertisement. He showed graphs and charts and videos. I actually believed for a little while that investing $2100/ month into Yelp advertising would bring lots of new revenue. SCAM! Luckily Yelp has a business dashboard that you can see the total number of clicks, calls and even the cost of your advertising every day. So I am watching the dashboard like a hawk once the campaign started. I observed $50-$70 day in advertising costs with Yelp, however my sales revenue actually was not increasing. So after about a week, I emailed, called and told them to STOP. To cancel as I felt it was a scam. We couldn’t even get a hold of the account manager in charge of my account to ask questions, make changes etc. Well, actually, you can schedule an appointment with your account manager for two or three days in advance. I continued to email the sales person, and account manager and I got crickets. A couple of days later, I received a call from a “manager” who told me to give it time. I asked her how much time should I give as since I was told that when people clicked on our ad, we would be getting results. She just said that it took time and that I shouldn’t pay attention to the clicks and costs. Ha! Wow! So…. I canceled the credit card associated to the Yelp advertising immediately. I forewarn any small business to participate in Yelp advertising. One of the problems I found is that Yelp is unable to reduce an area for which your business might be in to actually attract customers when they are looking for a product or service near you. I found that our problem was that people may have been looking for a restaurant like ours, but when they clicked on our ad (at a cost of $5) they would find out that we were 15 miles away from them and so that lead was dead. (At a cost of $5) For that week, we would also ask our customers where they found us, and we only found out that out of $700 in advertising we received 3 new customer leads. OUCH!! New customer acquisition cost that week was $233 each, with average revenue of $17 each. Not worth the investment for sure. We opted to move our online/social media advertising to Facebook, and for us has been priceless. I would never recommend anyone to invest $350 to $2500 with Yelp. It’s way too much money for what you will receive in return. I have already notified our attorney in advance because we refuse to pay Yelp for anything. So now it’s my turn to give Yelp some crickets.

  • Every 6 months or so, Yelp calls me. Their sales department is good, really good! They’ve hired some of the best in the business and because of that, it should be an extremely huge red flag!

    If they’re investing so much time and money into sales, exactly how much do you think they’re investing in you?

    This is why they need you to sign a contract, yet another HUGE red flag! If they have such a FANTASTIC product, why don’t they let you try what they’re selling for free or at least for 30 days for one fee that doesn’t renew?

    Don’t fall for it! And don’t fall for the “90 day trial” it auto renews and you can’t get out of it!
    Basically, they are heavily sales faced and once they get you into that contract, to hell with you and thy move on to the next prey! Beware!

  • I manage the social media / advertising for eight different restaurants and bars and my issue with Yelp is a lot more philosophical and therefore probably also moot. I’m older than the average person inclined to post a review but I’ve always wondered about the effect that its existence has had on the younger generations in that it encourages self-entitled grandstanding ‘fame’ as opposed to what most of the people in my age range have always done, which is to ask for a manager and actually address any substantial negative experiences (and here’s the nutty part) while you’re still at the actual place of business.

    For that reason, we keep an occasional eye on the respective Yelp cumulative ratings but would never, ever consider advertising with them. We’ve always taken the stand that we take onsite, in-person comments much more seriously than anything from someone who posts that there was one ice cube too many in their iced tea. And that has served us very well.

    Thank you for the article, Diane. I learned several things I didn’t already know and that made reading it a valuable use of my time (i.e., a rare online experience).

  • Only an idiot would not know that Yelp is a scam. Doesn’t say much for fivestars that they actually posted this without reference to the level of scam that Yelp is.

  • Hi Kevin,

    We wanted to try to remain neutral – but we appreciate your opinion and insight about Yelp. Have you had personal experience working with them?

  • Yelp is a scam. Very misleading and dishonest company. Had to contact FTC and BBB..hoping to encourage them to stop acting like heartless human beings. Yelp suspended my business account and disabled access to my business’s account simply because I told them my business is closed and needed all my personal info and pictures removed from their site. Google removed my personal photo…yelp refused to.

    They capitalized on taking advantage of others. Please I warn you!!! Do not open a business page on that website. They are scam!!! Greedy wicked company policy.

    If you need real business advertising then choose google…word of advice.

  • If my comment is not approved diane, then you probably work for yelp. It is only fair for people to be warned. I Wish I read Reviews Before Signing Up FOR yelp.

  • Yelp was a big waste of time and MONEY! Didn’t get any work for the first 2 months but I did have to pay yelp $732.00.

    Save your money and just go straight to Google

    YELP SUCKS!!!!!!!!!

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