The Pros and Cons of Yelp

9 Mar

Studies show that a bad review on Yelp can have detrimental financial effects on businesses.

Yelp is a website where the public can rate and review various local businesses. Based on the average rating of one to five stars and the number of reviews, businesses are rated compared to other venues in the vicinity. According to Yelp’s “About Us” page, it was founded in 2004 to help the public find local businesses. They had an average of about 142 million monthly visitors in the first quarter of 2015, and users have written over 77 million reviews. Yelp provides business owners with an option to set up a free account, from which they can post photos and message their customers, as well as purchase ads. In this way, it provides a great platform for positive word-of-mouth to spread through social media, potentially boosting a venue’s image in the public eye. However, at the same time, a negative review can ruin a business, presenting a downside to the service.

Chez Pannise, for example, often a top-rated restaurants, has only four stars on Yelp and has received particularly nasty reviews such as:

“Look, 100 years ago or whenever Alice whats-her-name came up with the oh-so-brilliant idea of serving stuff that’s fresh and local (DUH, like rural people have been doing FOREVER), but guess what .. tons of places have taken the concept light years beyond anything ms. alice does and they do it far, far better…”

On the other hand, Copper Top BBQ in Big Pine, California, is the top-rated restaurant in the United States for 2015, according to Yelp, and has received praise such as:

As a BBQ aficionado, this gem ranks in the top 1%!!
Owner Hank loves what he does and loves whom he serves!…”

The contrasting examples above make the case for keeping in mind the pros and cons of Yelp when opening a business page, and when deciding how to run a venue.


Yelp is a great way for small businesses to get their name out to the public, without spending a lot on advertising. A Harvard Business School study showed that an increase in a Yelp rating by one star leads to a 5% to 9% increase in revenue for independent restaurants. Urging customers to rate the venue can help raise the number of reviews the business will get, and hopefully increase the overall rating and exposure. By providing customers with a unique experience of pleasant ambience, fantastic service, and delicious food, a restaurant can be well on its way to receiving a good review. The photo and message features for businesses can provide an added social media platform for publicizing the venue for free, along with Facebook, Twitter, and TripAdvisor. Yelp can be used as a tool to attract consumers through its options of business-to-customer interaction, and the convenience of the site for potential customers when searching for a place to dine. The roughly 40% of Yelp reviews which are perfect fives offer promising outcomes for businesses. However, there can be downsides to the site as well.


What can you do about a bad review on Yelp? Nothing, except try to encourage happy customers to give good reviews to outweigh the bad. A bad Yelp rating can ruin a business. No one is fascinated in trying that one-star restaurant in the city of fives, and a restaurants with 100% positive ratings is probably preferable to one that has some negative reviews. Statistical analysis shows that Yelp reviews can be inconsistent over the years and tend to yield very different overall ratings than those written by professional restaurant critics. The disparities between the ratings may come from the skew of the populations rating the venues: professional critics often tend to appreciate restaurants with great service and clean ambience, whereas Yelp reviewers tend to appreciate great food at reasonable prices, free of frills. This skew is extremely apparent in the top 100 restaurants list posted on the site each year, where the top choices are often tiny businesses that have yet to make national headlines. Another type of skew that comes into play on Yelp is the rating system itself. With one to five star ratings, the public is likely to rate their typical choice as a four, while a surprisingly good sandwich shack may get a five. In this way, the ratings don’t necessarily always reflect the quality of a given venue.

There is much online debate about whether Yelp restaurant reviews are accurate, or too skewed to reflect the real quality of a venue compared to others in the area. But at the end of the day, the reviews show the average public opinion of a restaurant, which means that the average customer should be able to trust the feedback. The widespread use of the website by consumers, and the strong correlation between a business’s success and their Yelp reviews, makes the case for venues to invest time and effort into making sure they have a Yelp page, and that it gets filled with positive reviews.

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