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Yelp’s Online Marketing Success

Throughout the social media today, social proof is the buzzword. This is mainly because people do value an opinion made by the others when making purchases online. Bright Local recently carried out a survey and the outcome was that 88% of the consumers said that they did trust the online reviews as much as recommendations made by their friends. Yelp has become the main review site taking over its power. The small or medium-sized local businesses should consider incorporating Yelp as their online marketing strategy. Most restaurants, bars, clubs, retail outlets, and beauty salons do use Yelp as their local review site (Devash, 2013).

Founded by Jeremy Stoppelman in 2004 the site has a lot of popularity and now it boasts 77million per month via the desktop and the mobile visitors are at 69 million. It has generally had over 100 million reviews since when it was developed. People-owning businesses like those of restaurants should have Yelp has their essential cornerstone for online presence. It does not only apply to them but it can also do well with marketing financial and medical services. The greatest thing about Yelp is that most of its content is user-generated so all one needs to do is setting up a business page and the customers will do the rest. A good Yelp profile always yields better results on one’s business. In a study carried out by Michael Luca, of Harvard Business School, when a restaurant’s star ratings increase, the revenues tend to increase by 5-9 %

(Braatz, 2015).

Yelp website has a table of user demographics taken from comScore and it show that most of its users are below 55 years of age but instead they do range between 18-34 years. The main reason for this statistical outcome is that the age group is part of the “Google generation.” They always turn to the internet first for any advice using their phones more often than how the older ones do. Most of the Yelp users are educated with 59.5% having achieved college education and even earning a salary more than $100,000 per year. This is positive news for the advertiser in case they are involved in selling high-end or luxurious products. Normally, high incomes mean higher disposable income (Devash, 2013).

Advertising

When it comes to advertising on Yelp, one has to set up ad using their self-service option or on the other hand, you can choose to use the full-service option where one works with an account manager top manage things for you. Their program is very different from that of their competitors because the need a contract which is available for a period of 3, 6 and 12 months. There are costs charged per click but they do differ depending on competition in your local location and how of relevant it will be to the user. Their advertisement rates are not usually displayed publicly but for small businesses, a simple advertisement would cost around $300 to $1,000 per month. For a business to be able to advertise, it will need at least a 3- star rating. That is why it is recommended for one to have 2-3 good reviews on his or her page before considering advertising. This is simply because the ad makes the visitor doing some searches go straight to your Yelp page, and if the business looks unattractive, they will simply move on meaning that the money you spend on the ad go to waste (Couzin & Grappone, 2014).

The key to successfully benefitting from Yelp advertising is by one optimizing their business page. There are two main reasons for this; one is that you should not design a separate advertisement but instead your ad should be the snapshot of your business page. Secondly, is that when visitors do click on the ad they end up in your full business page. If they end up liking what they see you will definitely acquire a new business. The section “About Your Business” is very important because that is where you should explain your business by highlighting its benefits so that it attracts the reader’s attention. It is also a huge opportunity when one has good professional photos on your Yelp page thus making it easier for customers to reach you when they visit. Cultivating of reviews is lifeblood on Yelp because one will want lots of them and would want to get them regularly. This helps to get the system in place thus encouraging customers to leave them. Replying to these reviews is also another score for businesspersons because they show potential customers that you care for and starting to generate trust. It also encourages new customers to leave their reviews as the feel they are being listened to and it generates a sense of community. Yelp does not have unique targets so one should try to create some for better marketing strategies (Braatz, 2015).

There are many advantages of using Yelp as your marketing tool or strategy. Most users visiting Yelp are in a buying mode so they visit the website to find the best possible place they can find it. It is different for Facebook or twitter where they post ads even if no one is interested. Since opinion is everything, positive reviews can trigger something positive on the potential customers. The snowball effect in Yelp is a great thing because the more customers you get from the ads, the more reviews you generate. When your page has more reviews, it means that you might have more potential customers after clicking on your ads. Yelp advertising seems expensive but it is efficient for companies selling products and services with high profit margins. This includes, law firms, mechanics, repair shops, and restaurants (Couzin & Grappone, 2014).

The restaurant industry is known for consistently offering many investment opportunities though it is a fickle and competitive market. Grubhub and Yelp, are two social/mobile tech companies servicing the restaurant industry as their alternative way to gain exposure to this industry. Grub is mainly involved in online food delivery. The company connects its consumers with various restaurants in the United States and United Kingdom. Yelp on the other hand is focused on connecting people with local businesses using consumer reviews. Earlier it was known for restaurant reviews but it later expanded to any type of reviews for local businesses and it managed to establish communities in other countries outside of United States. Both companies have nearly the same market capitalization but lately Grub is trading at a higher premium compared to Yelp. What explains the premium the stock is currently receiving in Grub is its superior earning performance and the future estimates. On the other hand, Yelp has greatly improved because it has approximately delivered 50% more of its actual sales in the last four quarters (David, 2016)

In conclusion, Yelp advertising is indeed not for everyone but if you have a small or medium sized business that has a decent marketing budget it is worth considering as your advertising platform. If you take up key strategies such as including pictures of your storefront, optimizing the business page, using Yelp’s built-in analytical tools and cultivating reviews, your business can really do well on Yelp (Couzin & Grappone, 2014).

References

Devash, E. L. (2013). Frustrated with Yelp? The business owners guide to understanding & mastering Yelp. Los Angeles, CA: ESIOH Internet Marketing.

Braatz, J. C. (2015). Getting 5-star reviews on Yelp, guaranteed unofficial guide to ensuring your business wins on Yelp. Place of publication not identified: Publisher not identified.

Couzin, G., & Grappone, J. (2014). Yelp for business: the quick-start guide to managing your reviews. INpolis, IN: Sybex

David Zaragoza, (2016). Grub hub And Yelp - Side By Side.