Financial literacy

Yelp for Business: A Swindle or a Noble Idea Gone Awry

For businesses, Yelp touts itself as a savior to the small enterprise—actively aiding growth, procuring new clients, and solidifying relationships with existing ones.

To consumers, it presents as a place where direct communication with interested businesses can be forged, where service quotes can be requested, reviews of local businesses penned or perused, and ratings, photographs, and other pertinent data readily accessed.

Yelp lays particular emphasis on fostering a robust community. It promises an ecosystem where community members, actively participating, not only leave cursory reviews but provide detailed experiences of their interactions with businesses. This, in turn, ensures other community members glean tangible value. For businesses, Yelp parades a comprehensive suite of tools for market promotion, ranging from elaborate page designs with photographs and posts to flexible ad settings, keyword customizations, and precise targeting.

Sounds like a dream come true, doesn’t it? Yet, the stark reality veers dramatically. After a year’s engagement with the platform, one can safely posit that genuine recommendations aren't Yelp’s foremost objective; its primary goal seems to be profiting maximally off small businesses.
A fortnight ago, a pleasant call was received from Yelp, shedding insights about one of the Ubanksy’s (Marketing Agency) a client’s page:

"Hello, we noticed your company boasts a beautifully curated page and stellar reviews—a five-star rating on Yelp! Such a commendable reputation. However, we observed that rival companies, despite inferior reputations and subpar pages, are securing more clients in your vicinity. Wouldn’t it be wonderful for our community to witness a remarkable company like yours and for you to attract more clients?"

Now, a glaring question that inevitably springs to mind is: If Yelp projects itself as a platform, ostensibly striving to offer its community the finest choices based on their expert opinions, how do rivals with lesser merits garner more views and clients?

But I asked:

-“Are you suggesting we bump up our ad spend, aren't you?"
-"Yes," the lady from Yelp replied, "I've studied your page and discerned that increasing your budget will attract more clients."

-I countered, "Perhaps you're right, but we've opted for the minimal package ($150/month) primarily because you suppress our clients' reviews."

-"It's how the algorithm is set up," she explained.

-"Your algorithm is problematic then. It's hiding reviews from genuine company clients who have registered on Yelp, reached out to us through the platform, scheduled appointments, and corresponded with us. By doing so, you're obstructing our business."

-She elaborated, "The system evaluates reviews on multiple parameters. The individual who left you a review might not be an active Yelp user, hence the system chose to hide their feedback."

-"But we don’t choose clients, they just reach our company. Are their opinion doesn't have any value? By the way I've specifically checked the profiles of some clients whose reviews were moved to “not recommended”," I retorted. "Interestingly, their reviews for other companies are visible. So, the system deems the reviewer genuine, but decides to suppress the review for our business.

-"Well, you shouldn’t worry. It's not that significant," she deflected, "You already have an impressive page and a 5-star rating. That's a rarity and it works in your favor."

-"Look. Every review we have is hard-earned, a testament to our commitment and excellent service, but your algorithm undermine our efforts. Now we only have four visible reviews. The latest was posted in May, with another six suppressed. If I, as a potential client, observe top 10 companies with 60+ reviews—even if they're rated 4.9 or 4.8—and then see a company with a 5-star rating but merely four reviews, with the last one half a year ago, I'd likely opt for the company with a higher review count."

The representative persisted, asserting that ratings mattered more than volume and continued:

-"Let's initiate a test advertising week. You'll be astonished by the results! More clients, more reviews. The more reviews you garner, the higher the likelihood they get published."

What a gamble, I thought to myself.

-"To clarify, the more we spend, the more reviews we'll get, and some of them will pass your filter and appear on our profile?"

-"Exactly. Plus, you'll get more orders. Do you have any free slots you'd wish to fill in your schedule?"

- "Yes, we can manage an additional four jobs daily."

She made some calculations.

-"You need to spend $57 daily," she concluded. A stark leap from our current $5 daily budget.

-I pressed, "Currently, we receive 30-35 messages monthly from potential clients. Our conversion rate is 10-20%, resulting in 4-6 jobs from Yelp monthly. If we increase our budget tenfold, are we looking at 300 messages, translating to roughly three daily jobs or 70 monthly?"
-Yes," she confirmed, "your visibility will surge, interactions will rise, and you'll witness it firsthand. Moreover, the system will prompt clients to share their experiences, yielding more reviews.

While it might seem trivial, the temptation to test a system at its maximum capacity for a week is alluring. What if we stumble upon a hidden gem?

Starting on Wednesday, I activated the advertisements, only to pause them during the weekends since our business doesn’t operate then.

Come Tuesday, I receive a call:

-"You can't just pause it; it messes up the ad performance metrics and disrupts the data tracking!" "But we're closed on weekends." "The system is aware and halts ads accordingly." Then, if the system automatically stops the advertisements and we're absent from the display, why would manually turning off the ad have a more detrimental impact on SEO and visibility than the automated process?

I didn't get why (my bad).
-“Now my daily budget is $57. The month's projected expenditure is $1851. If you consider a 31-day month, the math brings it to $1767. If your system recognizes our non-operating days, shouldn't the budget not exceed $1311?”

-"Our goal is to boost your order intake, so our forecasted budget is based on anticipated impressions. Hence, the stated budget."

The advertising dashboard lacks transparency on this issue. This ambiguity could potentially mislead many clients regarding their budget predictions generated by this enigmatic system. It's difficult to discern specifics, like daily impressions or conversion counts. The statistics appear obfuscated, making one wonder about the inner workings of this tool.


Fast forward to the end of our 1.5-week experiment where we splurged $57 daily instead of our usual $5:

During the ad campaign, two more customer reviews emerged, both hidden.

The tally: 8 concealed reviews, 4 visible. The number 4 has remained stagnant for six months.

Dashboard Statistics speak eloquently for themselves:
In October, we onboarded 7 clients via Yelp, (usually 4-6), 10% conversion. I'm sure that conversion could be better with strong reviews, but we know where they are. Meanwhile we shelled out almost six times our regular ad spend.

If you were to ask me why I invested such a substantial portion of the company's budget, full well knowing the potential pitfalls, here's my answer: Marketing is a precise science. However, the platforms one must navigate vary immensely. Pinpointing the optimal budget and crafting a strategic plan for any business invariably requires experimentation.

And Yelp, Yelp was certainly a disappointment. We'll undoubtedly maintain our client’s company's accounts there, but I'd rather redirect additional funds to Google Local for local SEO or PR strategy.

Have you had experience with Yelp as a business? Are you satisfied?
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