With over 61 million online reviews and more than 138 million visitors each month, Yelp is a dominant player when it comes to aggregating reviews for businesses at a local level. Pretty much every local business, regardless of its niche, has a Yelp page or the potential to have one.
Appearing on Yelp and collecting Yelp reviews is not determined by the business owner, but rather, it originates from Yelp users adding hundreds of new businesses and rushing to be the “first to review” a particular venue. Avid Yelp users compete against each other, trying to secure as many “first to review” badges as possible.
Once a business starts receiving Yelp reviews, it has the option to claim the business as its own, which equips it with limited tools of interactive engagement, but it also provides Yelp with the necessary information to have a valid point of contact with each business that will facilitate the outreach of its sales department.
Once Yelp has hold of business owners’ information, it will pursue the owners aggressively, seeking to secure a paid or premium business relationship that, among other things, appears to prioritize the way positive reviews are displayed for any particular business.
The apparent prioritization of good reviews for paying Yelp customers, combined with other business practices that many owners perceive as less than ethical, has resulted in a great deal of conflict. Some have been escalated to the point of litigation, accusing Yelp of engaging in practices that, for all practical purposes, are perceived by business owners as borderline extortion. Since business owners don’t have control of whether they appear on Yelp or not, it is easy to empathize with their plea.
While not every business owner has resorted to litigation, and some have taken matters into their own hands by launching creative and notable campaigns to create awareness of what they perceive as unfair, those opting for a legal path have had less-than-successful results.
For years now, business owners have accused Yelp of tweaking the results to display five-star scores when a business opts to advertise, and punishing those who turn down advertising services by prioritizing reviews with two stars or less.
“At Most, Hard Bargaining”
That is how Judge Marsha Berzon described Yelp’s practices when a case brought by several local California business owners went to an appeals process in the 9th Circuit Court. The local business owners represented by Lawrence Murray charged Yelp with civil extortion, attempted civil extortion, and violations of California’s Unfair Competition Law in San Francisco federal court.
However, in a 3-0 ruling, the appeals panel cleared Yelp of wrongdoing in the class action brought by business owners. Judge Berzon had the following response regarding Yelp’s alleged manipulation of its ratings to charge advertisers higher fees:
As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm … is, at most, hard bargaining.
According to business owner Boris Levitt, one of the representatives in the class action, and owner of Renaissance Furniture Restoration, Yelp, among other things, made several of his five-star reviews disappear from the website just two days after he refused to purchase advertising from Yelp. He believes Yelp removed the positive reviews as a threat to induce him to purchase advertising.
Consumers Are Beginning to Question Yelp
Quickly after the ruling was announced, many people resorted to social media to express their anger and disappointment at the court’s decision for behavior that is frequently being perceived by consumers as less than transparent. Shortly thereafter, many media organizations had picked up on the story, and Yelp began trending. Consumers that were otherwise uninformed on the matter began forming opinions regarding Yelp’s credibility and overall practices.
Consumers Siding with Businesses in Guerilla-like Yelping Action
While it is true that millions of shoppers use Yelp as a research tool to identify well-rated businesses, savvy and educated consumers are not turning their backs to the issue. Many have sided with local businesses, and even elite Yelpers are participating in activities aimed to discredit Yelp and support local businesses. The most recent is Botto Bistro, which has engaged in an active campaign to secure negative reviews in order to undermine the reliability of Yelp. You can read more of the story here.
Does This Jeopardize Yelp’s Credibility and Influence?
There is no doubt that this incident and its social and traditional media repercussions have certainly blemished Yelp’s business reputation, and we are likely to continue to hear about complaints, escalations, and litigious actions against the review site.
The reality, however, remains the same. Yelp is dominant in the review segment, and it is likely to continue to grow and influence lead generation for small businesses worldwide. Even when its credibility is shaky, smart business owners should remain cognizant of Yelp’s influence and implement strategies to utilize and engage with Yelp and Yelpers in a way that is conducive to business growth and improved online reputation.
Businesses that adhere to practices of excellence and client focus seldom struggle with having to battle Yelp and other review sites in matters associated with negative reviews. Let’s face it; if all your reviews are good or excellent, then Yelp and other review sites have very little in the form of leverage to move into an environment of “hard bargaining” with your shop.
At ReviewTrackers, we provide local businesses with the knowledge, tools, and expertise to set the stage for successful review management that generates business growth, and equips business owners with the right business intelligence to constantly improve what they do. Sign up for a free trial today and discover why our clients love ReviewTrackers!