How small businesses should use Yelp

Although I’ve strongly criticized Yelp‘s business model in recent weeks, Yelp is an incredibly important platform for small businesses to be aware of and engage with. And unlike Groupon, which has almost no redeeming value, Yelp has created a valuable consumer resource. I consider it the best resource for ratings and reviews of restaurants, bars, and local retailers in the United States.

According to the review site’s S-1, more than 60 million people turn to Yelp each month for its ratings and reviews. Small businesses should pay attention, because Yelp has become an important tool in the consumer decision flow. Yelp provides businesses a lot of tools for free.

If you run a business that regularly interacts with consumers, I recommend that you do this on Yelp:

  • Claim your business page. This allows you to edit key business information. According to Yelp, more than 600,000 businesses have already claimed their pages.
  • Add hours of operation. This is especially important for categories like bars, restaurants and retailers, where hours of operation can vary dramatically. With Yelp’s “Open Now” filter, consumers can restrict their search just to businesses that are listed as open.
  • Add photos. Photos convey a lot more information than words. In many cases, ambiance is an important part of the decision-making process.

That’s the minimum.

If you have the time, I also recommend reading and responding to reviews. It may be tempting to dismiss Yelp reviewers as unrepresentative of the overall population of your business. Yes, some of them are entitled hipsters who think the world owes them something. But many of them are your target market. Regardless, their opinions shape buying decisions. Yelp provides a helpful guide on how to respond to both negative and positive reviews. It’s not necessary (or wise) to respond to every review. But if a review materially misrepresents your business or if you’ve changed something about your business since a review was written, it’s worth pointing out.

One way that people judge a business is by how it responds when something goes wrong. Any business, even a 5-star restaurant, will have an off night. Showing that you care about it and are willing to fix things goes a long way toward instilling confidence in your business. By reading reviews, you might also discover areas where you do need to improve.

Yelp is an important tool for small businesses in competing with chains and franchises. One of the important functions that chains provide is to de-risk purchase decisions. If I go to a Starbucks or Quiznos, I know generally what to expect. There’s a lot more variability among independent business — some can be outstanding, while others are terrible.

It’s unlikely that I’ll have a terrible cup of coffee at Starbucks — corporate works to prevent that from happening. When faced with uncertainty, people will often choose the consistent.

It’s also unlikely that I’ll have an outstanding cup of coffee at Starbucks. Yelp helps to de-risk selecting an independent business. Yelp’s reviews make it easier to pick out the 4- and 5-star places that provide great products. These can be much better values because they don’t have the overhead that chains have.

By providing more information, you’re making it easier for people to select your business. And you can do all of this without paying Yelp a penny.


About Rakesh Agrawal

Rakesh Agrawal is Senior Director of product at Amazon (Audible). Previously, he launched local and mobile products for Microsoft and AOL. He tweets at @rakeshlobster.
This entry was posted in advertising, local search, yellow pages, yelp. Bookmark the permalink.

4 Responses to How small businesses should use Yelp

  1. Dave says:

    Great post Rocky – I already tweeted a link. Dave

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  4. Oops. I made a really naive mistake. I agreed to a year-long contract with Yelp, without doing my homework. Any ideas on how I can get out of it? I live in WA State and made the contract about 10 days ago.

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