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BizReport : Social Marketing : September 04, 2013

Is Yelp's effect on bottom line worth the legal wrangling?

Recent research from Merchant Warehouse reveals that 93% of consumers who use Yelp typically go on to make purchases with the companies they research via the online review website. Perhaps dodging the legal bullets and dodgy reviews is a small price to pay.

by Helen Leggatt

For small businesses, having a presence on review site Yelp can be a daunting experience, particularly in light of news stories regarding fake reviews and even defamation claims.

Merchant Warehouse's recent research found that, despite 93% of consumers who use Yelp going on to make a purchase with a company they researched on the review site, a whopping 87% of small businesses don't actively use such sites. Furthermore, 22% of those small businesses that do have a presence on Yelp have never bothered to check out their pages.

Those businesses could be seriously undermining their bottom line. The results of a Boston Consulting Group survey of 4,800 business owners earlier this year (March 2013), illustrated in Merchant Warehouse's infographic, found that small businesses with a free Yelp business owner's account saw an average increase in annual revenue of $8,000.

Merchant Warehouse concludes by saying that "review sites like Yelp pose big growth opportunities for small businesses that use them strategically" adding that, with the great demand for consumers for online review sites, having a presence on such sites allows consumer interaction and increases brand awareness.

What do you think? Is a presence on Yelp worth the potential for legal wrangling?

Image via Shutterstock

Tags: consumer reviews, online reviews, review sites, social media, Yelp

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  • Business Owner

    I believe the studies quoted in this article were conducted by surveys. While Yelp has been pushing these studies on the public consumer, they have not informed us how these srveys were conducted. Did they control the variables? Any business with high volume with have a Yelp listing. Most likely, a business with high volume has a good product. A business with a good product and high volume will most likely have high ratings on review sites, including Yelp. That does NOT mean that because a business has a listing on Yelp or has a high rating on Yelp, that Yelp ratings have a causative effect on income. In other words, Yelp reviews do not generate an uptick in income, Yelp reviews merely have an association with increased income. Therefore, a business owner would do well to focus their energy on improving the business. The economic benefits will follow. If businesses want to use reviewer feedback, that's great, but there is no need to buy Yelp advertising or dwell on managing reviews. I do understand the emotional impact that a negative and/or slanderous review can have on business owners and employees. I've been there. But when I look at things analytically, I realize that it is a pattern with our business that when we are doing high volume, our Yelp rating goes down. To overgeneralize,Yelpers are a rather narcissistic bunch, and when they don't have extra attention they yelp, quite literally! So dear business owner, I implore you not to worry yourself sick over this hyped up junk science, Just keep your head down and push forward. This too shall pass.



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