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Yelp is Killing Today's Referral

Businesses have grown reliant on online reviews for retaining and drawing in customers


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Yesterday's word of mouth referrals are today's online reviews. But one review site you may have heard of – Yelp – is ruining that. 

When it comes to managing your business's online reputation, or the digital conversation going on around a brand, businesses small and large have become reliant on online reviews for retaining current customers and bringing in new business.

Some industries, like food and hospitality, tend to get Yelped very easily. Other industries, like cleaning or handyman services, struggle to get a fraction of the volume of Yelp reviews that restaurants get. As a result, service-oriented businesses need to ask for those from their customers who have had both positive and negative experiences with the business.

According to the Local Search Association, in 2017 97 percent of consumers said they looked at business's online reviews. Nearly 68 percent of survey respondents said they would leave a business a review if they were asked and 74 percent were asked to leave a review.

Nevertheless, Yelp in 2017 has taken serious strides to put the kibosh on that, going so far as to send out consumer alerts about reported businesses. It's a move that, when paired with Yelp's questionable review filtering algorithms, could hinder some small service-oriented businesses that naturally get reviews from their customers.

In fact, Yelp is issuing "search ranking penalties" to businesses asking for reviews even if there's no reward attached – penalties will demote a business's search rankings on Yelp and hurt their overall reputation on the site. 

Yelp is the modern day referral.

"To me it's more of a process of 10 years ago when you would ask for referrals," says Shaun McCarthy, owner Handyman Connection of Colorado Springs. "Same kind of concept really. Isn't that okay? Isn't that a part of business? 'Hey, we did a good job for you, is there anybody else you can send us to?"

McCarthy took over the business about a year and a half ago and he says he and the previous owner are surprised as to how important online reviews have become for businesses. 

"It's just exceptionally greater, the entire process of going out to get reviews and how you have to manage it more than you did five years ago," McCarthy continues. "So it's been an important part of our overall marketing strategy of brand recognition. Online reviews are definitely something we spend some time with."

He does want to be fair, however: McCarthy understands that Yelp is trying to create organic content and agrees that soliciting positive reviews for a reward should be cracked down on. 

In Yelp's blogs about this subject, they have largely called out companies offering incentives for reviews of their business. That is unequivocally and absolutely unethical. Yelp should be targeting those businesses that are soliciting customers aggressively enough to make them uncomfortable and especially those offering discounted products, event tickets, and even vacation packages among other rewards in exchange for a positive review.

But, what about just asking? 

That seems to have gotten lost in the mix. Why shouldn't businesses be able to at least ask for honest feedback with no strings attached? Good or bad. Bring it on.

There’s also the notion that customers will only write a review if they’ve had a negative experience. It’s more than just a notion, however. According to some studies, (including this one), consumers are more likely to post a negative review on Yelp than any other review platform. Yikes!

They want somewhere to gripe to, someone to blame for their wasted date night or the rude handyman traipsing mud through the house. Customers are less inclined to remember to review a positive experience let alone take the time to write something nice about a transaction with a business. Instead they take it with them, tell a few people, and carry on.

So what’s the harm in a reminder? It’s just a nudge to a customer thanking them for their business and asking for that referral if they were happy or how they can improve in the future.

To add to McCarthy's frustration, Yelp’s review filter has held back 13 reviews of his Colorado Springs location. 11 of them are five stars and they’re not currently asking for Yelp reviews from their customers so something else in Yelp’s algorithm is holding those back.

“I say put the bad and the good out there and let me deal with it," McCarthy said. 

When asked about whether or not Yelp took into consideration that consumers are less likely to review a service-oriented business and sometimes those customers need a reminder, one of Yelp’s PR spokespersons said that was a good question and that Yelp discourages any solicitation as they think it creates biases, rewards or none.

They also linked their guide to success for businesses. It consists of two steps: provide the best experience and engage with your customers. Below it says “Don’t interfere with the natural flow of reviews.”

Gee golly, thanks Yelp!

Yelp will do what they want. But business should take this push seriously because Yelp’s site says that soliciting reviews, even without a reward attached, could deteriorate your business’s  rating and overall online reputation (they seem to be really against reputation management companies). For those service-oriented businesses, there are plenty of other review platforms out there like Google, Facebook, Angie’s List, Thumbtack and HomeAdvisor that get the industry and are more worth a service-oriented businesses time. 


Matthew Van Deventer is a content creator for WebPunch. As a dealer of words he dabbles in journalism and loves a good story, whatever the medium. He lives outside of Denver with his wife, daughter, and pup, Chewy

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