If you’re a business owner who dislikes Yelp, you’re not alone.

Business owners worry that unflattering reviews might scare away potential customers. They’re suspicious that negative reviews might be fake, perhaps planted by an unscrupulous competitor. These reviews of your business can sometimes feel like a personal attack.

Yelp has even been accused of extorting businesses who don’t advertise with them by suppressing positive reviews. (A claim Yelp denies is true.)

The catch is that Yelp impacts your business whether you like it or not. Think of Yelp as a wave in the ocean. You can’t change or stop it. But you can learn to ride it gracefully.

This post is the first in a three part series about the review website Yelp. 

1. Today, we’ll take a look at five big picture trends. 
2. The next post will offer suggestions for responding to negative reviews.
3. The final post  will focus on ways Yelp reviews can help grow your business. 

For now, here are five Yelp trends you need to know.

 

16% of Yelp Reviews Are Fake

It turns out there really are a lot of unscrupulous people and businesses writing phony reviews.

A recent study by Georgios Zervas and Michael Luca determined that 16 percent of Yelp reviews are fake. They’re either written to boost a business’s online reputation or to unfairly tarnish a competitor’s.

Yelp acknowledged the study on their blog. They also added that 25 percent of reviews posted on the site are weeded out by their filtering software. 

What can you do about it?

It may be easier to describe what you shouldn’t do.

• Legal action probably isn’t worth the time and expense.
• A profane counterattack can backfire and make your business look bad.
• Ignoring the issue won’t help much either.

Many experts suggest a polite, professional response. 

Keep in mind that you aren’t just responding to the person who wrote the review. You’re responding to people who might read the review. Customers are much more understanding of a negative review if the business owner provides a good response.

 

Groupon Deals Lower Ratings by 12%

Georgios Zervas and Michael Luca, authored another study (this one with John Byers) that coined the “Groupon effect.” Their data revealed that Yelp reviews that mentioned the word “Groupon” averaged a 12% lower rating. 

The study also determined that businesses received a 60 percent increase in reviews after offering a Groupon promotion.

In other words, a Groupon promotion can hurt your Yelp rating by leading to a flood of below average reviews.

The lure of additional business can make services like Groupon and LivingSocial quite tempting. It’s important to realize that might be substantial hidden costs to acquiring new customers this way.

 

A Free Yelp Account is Worth $8,000

The Boston Consulting Group did a study on the impact of advertising through Yelp. They discovered that just opening a free Yelp account boosts revenue by an average of $8,000.

Here’s what business owners get with that account:

• Communicate with your customers, both privately and publicly
• Track the User Views on your business page
• Add photos, a detailed business description, up-to-date information, history, and specialties
• Recommend other businesses

Customers will talk about your business whether you like it or not. Grabbing your free business account will allow you to actively participate in that conversation on Yelp.

 

High Ratings Boost Revenue

This shouldn’t come as much of a surprise, but it’s nice to know there’s data to back it up.

Another study from Michael Luca found that restaurants increased revenue by 5 - 9 percent when their Yelp rating improved by one star. 

This impact isn’t just confined to restaurants. A fascinating case study on the Pipeline Marketing Blog illustrated how a painting contractor’s Yelp page delivered $123,040 in revenue one year - nearly a third of the company’s total sales.

And, it seems that people generally like to give positive reviews. People give businesses a four or five star rating 67 percent of the time.

How can you raise your Yelp rating? 

I’ll answer that question in the next post in this series. However, I can give you a big hint. It involves listing to and acting on customer feedback.

 

82% of Yelp Users Are Ready to Buy

A Nielson study found that four out of five Yelp users visit the site looking for information to help them make a purchase.

This makes Yelp an important source of advertising.

Customers visit Yelp much like people used to reference the phone book. They search for a specific business category and then decide which businesses to contact.

Surprisingly, 44 percent of Yelp users say it’s the text of the reviews that matter most when making a decision. They look to the specific pros and cons and how the business owner responds to complaints. 

It’s also important that customers can easily find you once they decide to give your business a try. Make sure your contact information is up to date and your hours of operation are correct. Restaurants can post their menu on Yelp and even offer a link to make reservations.

You can learn even more by visiting Yelp's Business Support Center.

 

Stay tuned for my next post on Yelp. In the meantime, here are even more interesting statistics, courtesy of Nielson and Yelp: