If Yelp is bad for business, why should local businesses use it?

Businesses hate Yelp

There are a myriad of articles online about why Yelp sucks:

Even our own reader Patrick expressed why he feels Yelp is bad for business on our post about how to get more Yelp reviews:

Jun,

[You] did a big disservice to small business by asking them to suport YELP. Yelp is bad for [the] business community and any effort to support them will [continue to affect businesses negatively]. They are first of all not business friendly and most of the Yelpers are bargain hunters. 90% of the reviews are complaints and it has become a complaint forum.

Why do you want business to pay / support a complaint forum. If people really care about business they can talk with the owners and resolve issues. You dont want people to give you a 1 star because they dont like the paint color or they didnt like the owners hair style.

I strongly suggest you should do research and write about how Yelp can hurt local community. Yelp makes a business by pitting customers against business. This is not a healthy model for the economy and local community.

The only way for Yelp to fail is to ignore them and stop their cash flow from businesses. If businesses understand this they will stop support to Yelp.

With so much compelling evidence, should business owners completely shun away Yelp?

Ignoring the problem won’t make it go away

The number one mistake that a business can make is to ignore Yelp.  Yelp is a public company that isn’t going away any time soon.  Whether a business owner likes it or not, consumers use Yelp on a daily basis to discover new restaurants and other types of local businesses.  Just this week I used Yelp to find a Smog Check service and a Hair Cut Salon for men.

Why do customers give out more negative reviews than positive reviews?

Give a customer a good experience and he’ll go home happy.

Give a customer a bad experience and he’ll tell 5 of his friends about how terrible the business is.

This is just human nature, and is reflected in the distribution of positive vs negative Yelp reviews.  The critical factor to take note of is that a Yelp user will write a negative review on Yelp even if you choose to ignore Yelp.  All of Yelp’s users will see this negative review and your business will be hurt because of it.

This is why it’s so important to take ownership of Yelp and use it as a way to salvage a relationship with a distraught customer.  Don’t ignore Yelp; take advantage of it to communicate directly with dissatisfied customers and fix the problem.

Yelp can be a huge positive for a business

A study by the Harvard Business School determined that a restaurant that boosts its Yelp score by one full star can see revenue increases from 5 – 9 percent!  This is huge!!!

The goal of a local business is of course to serve great food and provide excellent service.  Great food and excellent service will naturally drive positive reviews on Yelp, but there are strategies that you can utilize to drive Yelp users to positively review your restaurant on Yelp.

Do not invest in Yelp Ads

Though we advocate strategies to get customers to positively review a local business on Yelp, we are highly against ads for Yelp.  There are plenty of posts written about how Yelp ads do NOT target the right keywords and are NOT relevant to the user’s search terms.

Keep your friends close, and your enemies closer.

In this case, stay as close as possible to Yelp because it has a big impact on your local business.

 

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10 thoughts on “If Yelp is bad for business, why should local businesses use it?”

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  2. Go I hate yelp so much, they are the worst absolute evil to come out of the internet since its inception! they decide who can and can’t review and what reviews they display to represent your business without an owners permission, if you speak your mind or don’t say what they like to hear on the site they ban you! The reviews are unmoderated and any slanderous damaging comment can be made against your business with no recourse or accountability. Why would anybody support these purely evil people, they are hurting so many hard working people and no one not even our own government can offer us any protection from this evil. I feel so helpless and completely ripped off.

  3. What are your thoughts on Yelp’s Review Filter?? How can a company, in so many instances, not just 10 or 20, but thousands claim to be fair and unbiased when a good majority of positive reviews are filtered and negative reviews (no matter what the case or source) are left up for the whole world to see?

    What do you think about a company that does not offer an appeal process to have fraudulent, slanderous or completely unsubstaniated reviews removed?

    A company who can ban users for any reason they deem fit and again, not offer an appeal process or even offer further information as to why a particular user was banned?

    A company who has had lawsuits against them, a company whose negative allegations are rising almost exponentially?

    http://www.facebook.com/yelpisafraud

  4. Good blog post. We certainly can’t ignore Yelp and restaurants need to make sure they response to negative reviews. I have a BBQ franchisee who was instructed by the home office to not response to any negative reviews online. Someone posted a bogus review on Yelp and they chose not to response. It was obvious a competitor since the account was opened the week before and only had one review with no photo. More people will be able to post reviews as smart phones grow in popularity. Remember everyone is a food critic with growing popularity of smart phones

  5. Very helpful! Do you suggest to NEVER invest in Yelp Ads, or is there a point at which ads CAN be useful?

    Thxs!

    1. Yes, my suggestion is to never use Yelp Ads. There are plenty of other marketing channels that I recommend spending money on:

      1. Content creation for a food blog or community blog
      2. Local SEO – rank at the top for searches such as “Mexican food in Mountain View”
      3. In-store merchandise
      4. Hiring better employees

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