Yelp Yourself to More Customers

Every business owner knows the value of a referral and can tell you that word of mouth is the most effective form of advertising that exists. Even big brand marketers crave the endorsement of “The Influentials“. The trick for local businesses is finding a sizeable word of mouth platform focused on their market. Enter Yelp.com, a year-old local directory, reviews, social networking, and local marketing mashup. Think Yellow Pages meets Zagat and Facebook. If you haven’t read the article in this week’s issue of Fortune magazine, allow me to summarize in three paragraphs or less.

Having just moved to Ann Arbor, I was looking for a high quality seafood restaurant for my upcoming anniversary. Not wanting to screw up a special occasion, I knew I had to find a reputable restaurant with a good track record in an unfamiliar town. Yelp.com to the rescue. In addition to listing local seafood joints’ addresses, phone numbers and driving directions, they also have a huge database of reviews written not by expert critics or the press, but by actual customers. The same concept applies to everything from coin laundries to auto mechanics.

Those interested in marketing your company to a local audience, take note. Newspaper, TV and radio ads are simply not able to convey nearly as much info as a few aggregated, unbiased reviews written by people that have actually used your products, services or establishments. This is great news for businesses that take good care of their customers and a death knell for those that don’t.

How can you take advantage of this new local marketing trend? Focus on customer service, which hopefully you are doing anyway. As sites like Yelp.com gain larger followings (see chart below), your business will eventually be rewarded with new business based on the recommendations of previous customers. Monitor your rankings and reviews to look for weak spots in customer interactions. Encourage (don’t bribe) your customers to rate your business online by putting reminder flyers on your counter or stapled to your receipts. Use traditional advertisements to reinforce your positive ratings by including a line like “Check out our reviews on Yelp.com”. This type of 3rd party credibility gives you a huge advantage over less savvy competitors and extends your existing marketing investment to new channels that don’t cost you a dime.

I would be remiss if I didn’t warn you of potential pitfalls in this new breed of social media sites. Not all reviews will be positive. Some people are just naturally grumpy or did have a legitimate bad experience but could not be satisfied no matter what you did to try to correct the situation. DON’T be tempted to create fake accounts and boost your own rankings with positive reviews no matter what. Misleading tactics like that will ultimately be uncovered and the fallout will be far worse than a couple of negative reviews mixed into mostly positive endorsements. People are naturally suspicious of a business that has all “5-star” ratings. This just doesn’t happen in real life. Also, DON’T bash your competition with fake reviews either. It’s just not good business sense.

Source: Nielsen/Netratings and Fortune

Far from being as popular as other social networking sites (or even other local online directories), Yelp.com’s astonishing growth and local appeal make this a sure bet to make waves both online and offline. Take advantage of these opportunities by taking care of your customers and paying close attention to what they are saying about you online. The rest will take care of itself.