I was finishing up my book when I got a call in a cold night in December about meeting up with a couple of the marketing guys from Yelp. Yelp corporate was trying to get a hold of me for a few months now, since we used to be a decent sized advertiser of theirs, having spent upwards of $2,500 per month on Yelp advertising for all 8 locations in the Los Angeles area. Suffice it to say that when I had called to cancel our advertising campaign, they were not too happy. The return on investment (ROI) was just not there for us. Now you could say I did not read enough books on Yelp, did not take advantage of all Yelp had to offer, and was not responding to every bad customer review, and thus I was the cause of not having stretched our advertising dollars to the maximum, and you would be right.
According to a Nielsen survey commissioned by Yelp, four out of five Yelp users visit Yelp.com before spending money, and 93 percent say that visiting Yelp leads to a local purchase. 82 percent of the participants said they visit Yelp because they intend to buy a product or service.
Of the participants identified as Yelp users, 89 percent said they typically make a purchase within a week from the businesses they find on Yelp. The 93 percent who said Yelp leads to a local purchase included participants who responded always, frequently, or occasionally.
According to a study by Merchant Warehouse, as much as 87 percent of small businesses (SMBs) still don’t actively use the site – and they still aren’t actively doing online review management or monitoring their business’ online reputation, which could seriously undermine their bottom line. Moreover, 22 percent of SMB owners who have active Yelp listings have never actually looked at their profiles at all. 93% of people that visit Yelp, end up making purchases.
Merchant Warehouse was quick to note, though, that attitudes towards Yelp are at least starting to change: 77 percent of SMB owners say that the site has changed the way they respond to customer issues and complaints.
The study also revealed that consumer trust in online reviews is increasingly making an impact on the business bottom line. 90 percent of Yelp users say that positive online reviews influence their company buying choices. But all of these statistics mean little to a small business that can barely afford to make marketing purchases for their small restaurant. The most important thing a small restaurateur can do is to make wise business decisions that multiply their revenue. Many Yelp ad reps are quick to point out the benefits of using Yelp, and most do not know the little tricks we can do as business owners to increase conversion.
But these guys seemed cool. They had a laid back attitude that made me reconsider advertising with Yelp. After all, Yelp is the #1 web site that sends us leads and the #1 most visited web site for restaurant-based information in the world, so it is pretty important. We had already finished most of the chapters of this book, including the Yelp chapters, but the one missing piece of the puzzle was that although we had done extensive research and analysis on what Yelp was and how to be market yourself on Yelp, we had never actually spoken to official Yelp associates to give us the no-holds back, 100% No-BS lowdown on how to most effective market your restaurant brand on Yelp.
I met with Chase Raskowsky and Jordan Smith as they were leaving Los Angeles and on their way to LAX. Their flight was only in a few hours, but they had enough time to meet with me at our west LA Zankou on the corner of Sepulveda and Santa Monica boulevards. What we covered pretty much was the perfect bookend to everything one would need to know about Yelp. During the conversation Chase provided most of the answers with a lot of help and detail coming from Jordan.
Dikran: What’s the best way to get ROI on Yelp? It’s easy to just set up an ad campaign and keep that going, but that may not be the best solution for many small restaurants. People want to know how to get the best “bang for the buck”
Chase: Well, it goes into a lot of things, but what it essentially boils down to is being able to captivate the consumer that is looking at the Yelp listing. Imagine you have 5 different people looking at your Yelp listing; each of them may say something different because different things appeal to different people; there are different tools you can utilize on Yelp that cater to different people.
The example I always use is my girlfriend. I look at reviews and star ratings, so that is what’s important to me. But she could care less about how many reviews a business has; she looks at all the pictures since she is solely a visual learner. She bases her decisions on what she sees, because for her it is more visual. Now there are other people who look for discounts, deals, or offers, and that’s fine because everyone is looking for something different. For those people we have check-in offers, deals, and gift certificates. We try to aesthetically please all viewers and bring them in one way or another.
Jordan: The main thing is lead conversion. Most of your work should be dedicated to converting. For any quality business half their ROI should be focused on converting leads from web site visitors to paying customers. 20-40% of all their calls, clicks, or leads should be turned into [paying customers.] That’s the goal we see for their business. You should be converting web site clicks to actual visiting customers.
Dikran: At Zankou Chicken we have a long history of advertising with Yelp. I noticed that Yelp would show me my advertising dollars as a sort of sales chart and show projection of increased sales based on increased traffic to our Yelp page from unique visitors. How accurate is this automated system of converting clicks into actual, projected sales? How do they calculate that how can Yelp prove that your advertising dollars are being turned into additional sales?
Chase: First off the revenue number that you see in the business owners account where it says “Yelp brought in $10,000 this month” is a new feature we are continuing to grow. (Dikran I added some screenshots for you that better explain how it is calculated) The consumer is allowed to enter the average revenue per customer, how often they expect them to use their service over a month/years time, and lead conversion from total leads (we as well supply industry estimates)
Sometimes it’s not the most accurate number but it’s a good picture of all the leads you are generating what revenue could follow. From the ten people that look on your website from Yelp, which ones come in and which ones don’t that is hard to estimate? So we allow you to put in general conversion percentages.
Dikran: So should people use Google Analytics to help keep up with all this?
Jordan: We track how many clicks go through Yelp to your web site.
Chase: There may be some disparity between the actual revenue generated immediately and the click through rate, but you have to look at it as opportunity revenue. You should think of people’s lifetime value after they become a customer from Yelp. Just to give you some perspective consider this story:
I found a restaurant on Yelp called Espetus in the heart of San Fransisco. I found it on Yelp a month after moving there, I took my girlfriend there, I took 20 people I know there, I took all my friends there. I probably have taken about 200 people there within the last year.
Dikran:That’s a lot.
Chase: So you have to think about the possibility that a new customer brings in many other new people to your restaurant. This is a great example of what can happen from one person finding your business on Yelp.
Dikran: So what do you think of the importance of the photo slides? Is it important to have the photo slide? Is it important to have nice looking shots? There is this assumption among many circles that the customer shots, while some may be amateurish, make people hungrier because they resemble true-life more than professional shots. The only problem is some of these shots people post look terrible and sloppy, which is not the best representation of our food so on the advertised locations I like to push those shots down on the list. Personally, I like to post professionally taken shots. What are your thoughts on that?
Chase: I would say the photo slide show is one of the most important things for a business, especially in your industry. It is of a major importance to restaurants. When a consumer is looking at your listing, they are usually ready to eat. So if they see sloppy or bad shots, they have to convince themselves now either from the reviews or whatever else they are seeing to in turn eat at your restaurant.
This is extremely important for consumers because #1) they want to know what is available on the menu and #2) does it look appealing? If the first thing I see is an empty plate or a plate that doesn’t look good I may get turned off. If I can’t find good shots I may not be inclined to take the next steps, but if I do I very well could be ordering that dish I see within the hour.
If I have a couple of good shots of what the restaurant looks like and a few good shots of the plates, I would be willing to take the next steps. It’s good to have control over the photo gallery so you can push the sloppy looking photos down. We just talked to someone with a “please wait to be seated” sign as their first shot, so it’s important to be on top of that. You should want your page to look as professional as possible.
Jordan: I think the photo slide show is the most important thing about your listing. That’s what I look at and I use Yelp every single day. You can feature the consumer shots to make them feel special if it looks good. It’s not good if people are looking at your photo slide and there are no shots of good food even after the 4th shot.
Dikran: What’s the best and most ethical way to fight negative reviews?
Yelp: It depends on the nature of the business. If you own a business that has 5 or 10 reviews across the majority of the industry you are not going to be reviewed a lot. If you’re a lawyer for example you won’t have thousands of reviews, or nearly as many reviews as a restaurant per say. For example there are at least 20 people in here right now. We always recommend responding and being engaged. For restaurant owners this is harder, as you serve 100’s of people daily, where a home service business may help 1-2. Regardless it is good to be engaged with consumers on Yelp.
It’s good when the owner reaches out to a customer if they had a bad experience. I would say it helps bring them back; it helps them give you another shot. Commenting privately or publicly can do this.
Obviously not every situation can be amended but you should try commenting to them and helping them. Some businesses do the mistake of lashing out publicly at these negative reviewers. But you’re not thinking about the 1,000 other people that are going to be looking at that. Commenting public ally is good as well. Keep it as professional as possible. Think of the thousand other people that will read your response.
If I see a negative review and I see you tried to make up for it, it looks professional. If what you wrote is heartfelt, and not trying to bash the person, it will be authentic.
Jordan: Try to keep it brief. Private message them and see if you can make up for it.
I care that the business at least tried to make it better. If there is a discrepancy like false information about a business the business owner has the option to flag the review.
Dikran: What is the best combination to approach Yelp in terms of advertising with Yelp? Do you recommend doing Yelp deals or check-in offers?
Chase: At Yelp we have a very strong mobile platform. We are integrated into iPhone and most other smartphones nowadays. The majority of people are already on their phones.
What we highly recommend are check-in offers. The majority of the time people are checking out businesses on Yelp right now it’s on their phones. We recommend doing check-in offers. And you can rate and review businesses on your phone as well. Check-in offers for restaurants are the most important. If you check in it asks questions about the restaurant, allows you to share with all their personal social media platforms, and even prompts the user to leave a review right on your phone.
For example a common check in on yelp for restaurants is “check in and get a free drink”. I take out my phone, I can see the check-in offer, and I can also share that on other social platforms like Facebook telling my friends where I am eating. This is just added benefit and added exposure for you. From the business owner side of it, you will attract more business, plus it’s much easier to track, so for example if 39 people did check in it means they were physically inside your store.
Dikran: What are some inside marketing tips you can give to the readers of this book? How is it best to use this platform?
Jordan: Sign up for the business owner app on the phone. This will make it more real because you can track things in real time. Take advantage the free tools we offer. There are many things you can do to help your customers and monitor your business that are completely free.
Chase: Many people that own businesses don’t even log in. It’s completely OK if you don’t want to advertise, but we have many free tools they can use. You can always buy a photo slide show for just $25 per month. That’s not going to break the bank and thousands of people will see a much nicer representation of your business.
The consumers will see something that looks much better, much more aesthetically pleasing. The people that are finding you, will have a better representation of your business, and with the slide show you don’t have to commit to anything.
Dikran: Is there anything new going on that we should know about at Yelp within the last year?
Chase: We have a new feature on iOS. You can find new places and activities in your area. Left swipe from your home screen and find new restaurants and bars in your area.
Dikran: What about Seatme and Eat 24? [Seatme is Yelp’s reservation platform and Eat24 is their delivery platform]
Chase: We are now offering $99 as a flat rate for Seatme and it’s working great. We give you an iPad to control your reservations as well. What is nice is the program has a monthly flat rate and doesn’t charge per reservation like Opentable. Eat 24 our delivery platform is doing really well also.
Jordan: We are now almost completely transitioning to using cost per click in terms of advertising. Customers love it because it’s performance-based advertising. It’s a great option for businesses that want to maximize ROI. We are seeing great results with that especially for customers that want great ROI.
Dikran: Thanks a lot for agreeing to do this interview. Many people have a lot of these questions and it’s not easy for them to talk to an insider, so I am sure all of this will be very useful.
I hope you don’t miss your flight.
What are the few top mistakes you see restaurants doing and what are the most important things they should be doing?
Chase: I would say the top mistake I see businesses do is lashing out at Yelp and becoming disengaged due to a bad review. Something turns them off from their consumers and they stop becoming engaged, they stop caring, and they just stop logging on. But Yelp doesn’t stop just because you are not logging in or checking on your customers, and many people are still viewing your listing monthly. In the restaurant industry it’s hard to ignore Yelp.
They need to realize it is part of the business. It’s not good to turn away from Yelp in this industry solely due to how many people discover your restaurant because of Yelp.
This goes back to logging in the business owner’s account and make sure you keep up with what’s going on. Make sure you download the app and log on as the business owner.
Jordan: Since I use Yelp every day I realize how important this is. Not every business owner recognizes this importance. They don’t appreciate Yelp’s many options that are available. Some of the best sales and conversations I have had with customers came from bad reviews. Sometimes there’s a generational shift and some people don’t understand this.
Chase: We are growing. We’re releasing new things and coming up with better tactics. A lot has changed since 2013. We now have updated versions of everything. We want to help business owners to understand Yelp in a good way and see what is on there. Many people don’t know how to upload the pictures and set up the business listing so we are here to help. We can help show you how to monitor your leads and update your listing as well.
Jordan: Have a conversation with someone from Yelp, set up a check in offer, don’t hide the fact that you’re on Yelp, encourage people to check out your Yelp listing, but don’t ask people to rate you on Yelp. You can say “Check us out on Yelp” and in this way they feel no pressure.
Chase: If you ask people to rate them they may feel pressured. They may not say or show that they are pressured but that’s how they may feel. But a check in offer and stuff like that is strategic without being pushy. A poster that says “Check us out on Yelp” has much less pressure.
Jordan: For business owners asking for reviews is lazy. You worked hard and you’re an entrepreneur so you have to learn to be strategic. Put a sign up that says “Check us out on Yelp” and be subtle. Let everything you worked to create work for you, asking for reviews basically negates all the hard work you put in.
Dikran. Thanks again for all this great info. Also, today you guys checked out Zankou Chicken for the first time, so what do you think?
Chase: (laughs)…5 Stars! The rice is beautiful; awesome food.
Jordan: The rotisserie chicken was great. I loved that it was awesome. 5 stars!