Yelp, et al: An Introduction
Today we embark upon a journey that I’ve been hemming and hawing around for a few months now: online crowdsourced reviews. We’re going to mainly focus on Yelp, since they’re the big dog on this particular lot, but we’ll touch on some of the other sites as well. Over the next couple of days, we’ll talk about how these sites work, how you can use them to your advantage and ways you can manage your online reputation. Today we’ll take it easy by giving a brief overview of Yelp in particular, including a discussion about a Yelp-related study that came out of Harvard’s business school last month. Tomorrow we’ll get into the sausage-making aspects of how Yelp works and we’ll go from there. That’s about all I have for this introduction, so I guess we’ll get started.
Okay, even though my heart of hearts tells me that everyone in the foodservice industry has at least a passing familiarity with Yelp, my motto remains “Never assume.” So in the event that you’ve spent the last decade in the Antarctic, here’s a brief rundown of what Yelp is.
Yelp is a crowdsourced review site for businesses. It’s most often associated with restaurant reviews in particular, but vets and plumbers and grocery stores are on there as well. What exactly is crowdsourcing? Well, Wikipedia defines it as
the act of sourcing tasks traditionally performed by specific individuals to an undefined large group of people or community (crowd) through an open call.
which works for me. In other words, Yelp is a site that anyone can join and post reviews (along with star ratings) for any business under the sun. The site then averages these ratings to assign an overall rating to said business. Now there are some behind-the-scenes factors that go into this process, but that’s part of the sausage-making we’ll get into tomorrow. Right now all you need to know is that anyone can sign up and review places on Yelp.
When people want to find a restaurant in their area, they can go to Yelp.com (or open up their Yelp app on their mobile device, which is a topic for another day) and find themselves with a couple of options for searching. You can do a general search (“restaurants”) or a more specific search (“barbecue”) for a given zip code. You can then filter your results (which, admittedly, are sometimes questionable when doing specific searches; e.g. Chik-fil-A for barbecue?) by a number of different criteria. As far as consumers are concerned, it works pretty well. For restauranteurs, on the other hand, it can be a mixed bag.
WHY YOU SHOULD CARE
On the plus side, Yelp has greatly increased the visibility of independent operations. In Harvard’s Michael Luca’s recent study Reviews, Reputation and Revenue: The Case of Yelp.com, he points out that as of 2009, Yelp has reviews for 70% of all operational restaurants in Seattle. By comparison, the Seattle Times had only reviewed 5%. Like I said: increased visibility.
…Which leads to an increase of sales. One of Luca’s key findings is that Yelp’s influence has led to a decline in marketshare for chain restaurants. Chain restaurants tend to be less susceptible to the effects of Yelp reviews; they’re already known quantities and therefore people go into that experience more or less knowing what they’re going to get. Independents, however, have historically been a roll of the dice; you’d never know what you were going to get, since they don’t have the traditional coverage or marketing budgets of the big guys. Yelp helps take some of that mystery away and in the process makes it less of a gamble. As such, people (as a whole, that is, individual results may vary) are eating at more independent restaurants than they had been previously.
So those are two of his key findings (chains are less susceptible to Yelp reviews, independent marketshare has risen). The third finding is kind of an eye-opener: an increase of one star on Yelp correlates with a 5–9% increase in revenue. In other words: regardless of how you personally feel about Yelp, it can tangibly affect your bottom line.
That’s where the bad part comes in. Again, without getting into too much of the sausage-making (which is turning out to be the phrase of the day), the fact that anyone can write reviews can be both good and bad. Increased exposure is all well and good, but Yelp, like the rest of the internet, is filled with vocal idiots. Sometimes negative reviews are accurate and warranted; but sometimes people have an axe to grind, sometimes they’re just plain dumb, and sometimes their reviews say more about them than they do about the restaurant. From an operational standpoint, the fact that literally anyone can be a critic these days is good at keeping you on your toes, but the reality is that you can’t please everyone and some people just can’t be pleased, period. And those negative reviews that crop up here and there can be stressful and infuriating. It’s hard not to take things personally, but we’ll talk about doing just that.
And thus our introduction to Yelp comes to a close. Tomorrow we’ll get into the nitty-gritty details of how Yelp actually works; until then, see what the wizards at Vanee are brewing up for your operation. Take care!