Yelp: What Every Small Business Owner Should Know


Published: May 4, 2020 Author: Jason Holicky - Hometown Design Studio Inc.
Yelp: What Every Small Business Owner Should Know

 Photo credit: dzianominator -

Most of us are familiar with Yelp from the consumer side. We need to hire a plumber, get some tacos, visit a tourist destination, or otherwise get some recommendations, and Yelp seems to be the answer. Type in what you’re looking for, and you get back a list of results, complete with photos, ratings, reviews, and other details about the business. 

Seems like a great place to invest some marketing dollars into, especially if you already have a lot of happy customers who would be likely to leave glowing reviews? Maybe not. Let’s take a look at what you need to know about Yelp advertising.

What’s Great About Yelp
Yelp was started by two former PayPal employees nearly 20 years ago as a platform for people to review restaurants in California. It’s now worldwide and includes virtually every consumer-facing industry in their reviews. Part of this growth can be attributed to the way the public can easily interact with the side, reading and leaving reviews, without needing an account.

Over the years, Yelp has built lots of useful features for users into the platform, such as event reminders and personal connections with other users. For businesses, they’ve been given options to post about special offers, and companies with lots of great reviews and stars can get a “People Love Us on Yelp” award to display on their website, all without any Yelp advertising. For most consumers, that little award can be particularly persuasive. In fact, 93 percent of consumers said online reviews impact their decisions.

What’s Pretty Good About Yelp
Google and other search engines index Yelp profiles and reviews. That means that search engine users can come across your business’s page or see some visitor comments without going directly to Yelp to find them. Considering that most consumers use Google as a starting point to search for where they want to spend their money, any time you can show up in Google SERPs is a good thing.

Yelp also provides a free and easy way to interact with customers, especially those who have left reviews. You have the option of posting a public comment on the review or contacting the customer via direct message, and both of these are great ways to build rapport. Public comments go a long way for poor reviews, especially if you are apologetic and offer ways to make it right with the customer, and even a simple “thank you” on good reviews will show your audience that you’re active and engaged with those who have visited your business.

What We’re Not So Sure About
Yelp offers paid advertising to help get your business profile in front of more people. With 178 million unique monthly visitors, this can seem like a great idea. We’re not so sure. First, Yelp advertising is expensive, especially when compared to other inexpensive routes that small and medium-sized businesses can take to get more visibility.

Yelp starts its advertising at $350, and that money will only boost your visibility on Yelp. In contrast, Facebook offers ads that can be shown on its platform and Instagram, and across multiple touchpoints such as the news feed, videos, and messenger, at basically any starting price you’re comfortable with. Want to toss $10 at an ad just to see how it works? Not possible on Yelp.

Once you’ve established your company’s page on Yelp, their sales team can be rather relentless at trying to get you to advertise. Some will call as often as every week, and you’ll receive countless emails suggesting that your business will get a lot more customers if you spend a little cash. (One guy was able to put his aggressive callers to work fixing an error on his listing, so maybe they’re not all bad?) But is Yelp advertising really effective enough to warrant a high starting point?

It’s not a cut-and-dry answer. We’ve taken some time to search around and see how other businesses are faring on their ad spend, and the news isn’t always good. For one thing, Yelp’s feedback tools can be somewhat misleading if you don’t know how to read the reports as it may seem like you’re getting far more views and leads than you really are. In many cases, once the real leads are sorted from the chaff, the cost per lead is much higher than Google Ads.

It’s also important to consider that certain industries are going to do much better than others. B2B companies should probably stay away from Yelp advertising altogether. Restaurants will have an incredible amount of competition. Plus, Yelp’s users are heavily skewed toward those under the age of 54, with at least some college education, and making more than $100,000 annually--a narrow slice, indeed.

Understanding Yelp Reviews
Another issue to be aware of when using Yelp for business is that they filter the reviews and are not exactly upfront about how that filtering is done. One way of doing this is to mark them as “Not Recommended,” and hiding them from view. According to Yelp, this happens when less-established users leave reviews, reviews seem like an “unhelpful rant or rave,” appear to be fake, or seem to have come from a biased source like the business owner’s friends. Yelp finds up to 22 percent of reviews to be Not Recommended, and another 7 percent are removed entirely.

While it’s always helpful to have fake and biased reviews get removed, the other ways that reviews are interfered with may not be as helpful. Are the experiences of less-established users less valid than those of people who have left many reviews? Are reviews from extremely happy or unhappy people not useful? That’s up for you to decide.

There’s also some speculation that Yelp interacts more favorably with businesses that buy their ads. A lawsuit brought against Yelp was unable to prove the company was directly extorting its customers with enough evidence to satisfy the court. Still, the judge acknowledged that some doubts about Yelp advertising methods were warranted. Just not enough to be called extortion.

Another possibly tricky thing to be aware of is that Yelp will show ads for related companies on the profile of your business. For example, if you’re the owner of an Italian restaurant, ads for other Italian restaurants will show up right on your profile, and before users scroll far enough to read your reviews. Unless you’re also an advertiser.

The Bottom Line: Should You Use Yelp?
We say that every business owner should claim their page and add as many details as possible to their listing, including photos, menus, and anything else that might be helpful for potential customers. We also highly recommend interacting with anyone who has left a review, sent a message, requested a quote, or otherwise interacted with your business on Yelp. And that’s it for small and medium-sized businesses. Stick to the free tools and make the most of all the ways to engage with customers, and save your marketing budget for another avenue.

If you haven’t claimed your Yelp profile or need help filling in the blanks with effective information, we can help! From keywords to photography, we’ll make sure you make the most of Yelp without breaking the bank.

About the Author

Creative Director Jason co-founded Hometown Design Studio of New Lenox, IL in 2013. He spends his days guiding and consulting industrial clients and small businesses owners on their marketing strategy and projects. Jason enables everyone to be successful and grow their business by sharing his knowledge and experience.
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