How Much Does Yelp Matter for Small Businesses?

bizfluent article image

Before prospects decide to buy from your business, they conduct research online. Part of the research process for many prospects includes looking at customer reviews. It’s important for small-business owners to be aware of the powerful impact that reviews can have on a business. Understand how Yelp reviews work and whether they can help or hinder your small business.

TL;DR (Too Long; Didn't Read)

Whether Yelp is relevant for your business will depend on your industry and your target audience.

What Is Yelp?

Yelp is an online directory with the goal of helping consumers discover great local businesses. Started in 2004 by Russel Simmons and Jeremy Stoppelman, the platform has a website and an app on which Yelp users crowdsource information that helps them decide which local businesses to use. contains business listings that are filtered using a number of criteria, such as geographic location, price range and unique features.

Customers can leave Yelp reviews, upload photos of their experience and provide a star rating. This information is valuable to other prospects because it helps them decide whether they want to use that particular business or not.

While Yelp is free for businesses, there is a paid component as well. The free tools enable businesses to claim their business page and maintain some control over the content, such as responding to reviews and uploading photos. The paid versions provide additional functionality, such as advertising the small business on the review site to customers that fit the target demographic. A full-service option is also available, where businesses can get support from Yelp’s marketing team, add videos and offer a call-to-action button on the site.

Who Looks at Yelp?

Before you start focusing your efforts on Yelp, it’s important to understand who looks at the review site. If your target market rarely looks at Yelp, then it may not matter much if you get a bad review on the site. However, if your target market frequents Yelp, then it’s important to ensure you have many good reviews on the platform.

The demographics of Yelpers are:

  • Age: 

  • 18 to 34 — 33%; 

  • 35 to 54 — 35%; 
  • 55+

    –— 32%* Education: 

  • No college — 18%; 

  • Some college — 64%; 
  • Grad school — 18%* Income: 

Other important Yelp user information to keep in mind as you develop your Yelp strategy includes:

  • Men use Yelp more frequently than women

  • Men are more likely than women to leave a review on Yelp

  • People who live in urban areas are twice as likely to use Yelp than those who live in the suburbs

  • 71% of Yelp searches are from mobile devices

  • There are 26,000 reviews published on Yelp every minute

Top Industries for Yelp

While Yelp's mission is to connect customers with local businesses, not all businesses need to focus their efforts on this review platform. There are certain industries for which Yelp is more beneficial than others. For example, if people are looking for a place to eat, they will likely turn to Yelp to check out restaurant reviews. Restaurants are the top businesses that are reviewed on Yelp by customers.

Other industries where Yelp gets a lot of traction include:

  • Local services, such as contractors, electricians, home cleaners, plumbers, painters, landscapers, locksmiths and movers

  • Shopping stores, such as small-business retail locations

  • Beauty, health and fitness businesses, such as hair dressers, nail salons and dance classes

  • Auto businesses, such as dealerships or mechanics

  • Travel-related businesses, such as hotels, motels and tourist shops

  • Nightlife businesses, such as bars, pubs and clubs

If your business falls into one of these categories, it’s wise to investigate whether having a Yelp strategy can help your business to increase revenue, acquire new customers and build a loyal customer base. Check whether your local competitors are on Yelp and what their Yelp star rating and review count is like. This will give you an idea of what you are up against and what you should be aiming for in order to stand out.

How to Encourage Customers to Leave Yelp Reviews

The more positive online reviews you have on Yelp, the greater visibility your business will have on the review platform and in search engine results. It’s important to ensure that you don’t have too many negative reviews and that the majority of your reviews lean positive. Your online reputation is what prospects who are researching online will look to in order to decide whether they want to purchase from you.

However, getting more reviews on Yelp isn’t as easy as it seems because the company has a strict policy around soliciting reviews — Yelp does not want businesses to ask customers, friends, family or anyone else for reviews. In fact, their sophisticated software is actually designed to weed out reviews that have been requested or solicited by the business. Businesses cannot offer rewards or discounts in exchange for Yelp reviews, work with vendors who fix reviews or pressure anyone to post a review. This is part of their content guidelines and terms of service, so it’s important to abide by these rules.

According to Yelp, the best way to avoid bad Yelp reviews and get positive reviews is to consistently offer customers great service. In addition to ensuring you’re always keeping customers happy, there are some other strategic actions that small businesses can take in order to get more reviews on Yelp:

  • Let customers know your business is on Yelp. This is not the same as asking for a review because you are simply notifying customers. You can do this by placing a link to your Yelp page on your website, social media and email signature.

  • Use Yelp stickers and signage: Small businesses have access to free Yelp branding. This can be placed in strategic locations in your business to inform customers that your business is on Yelp.

  • Share your best Yelp reviews: Hand pick the best reviews on Yelp for your business and share them on your marketing materials, social media and website. This is a great way to use social proof to showcase the success of your business and also let people know you are on Yelp at the same time.

How to Deal With Negative Reviews on Yelp

If you receive negative reviews or one-star reviews on your Yelp page, the best way to counteract them is by having more positive reviews and five-star reviews. In addition to offering your customers the best products and customer service, there are some actions you can take to lessen the effect of a negative review on your online reputation. Keep in mind that you cannot delete a negative review.

Take time to understand the incident about which the reviewer is writing. You’ll need to note specific dates, times, locations, employee names or other details he provides. Also take a look at the profile of the person who posted the review to see how often he posts reviews and what kind of reviews he usually posts. This will help you decide how to best respond.

In your response to the negative review, be sure to offer an apology, explain the situation and provide a solution. For example, if the customer is complaining that you ran out of the chicken special that night, explain that you had a limited supply because it was a new recipe you were trying, and you now know it was successful, so you will ensure there is enough supply of the dish on hand for customers. Always invite the customer to return to your business.

Responding to a negative Yelp review shows prospects who have not yet visited your business how you handle uncomfortable situations. Keep emotion out of your review and respond logically and calmly. This shows prospects that you take feedback well and are open to making improvements to keep customers satisfied.

Yelp Review Best Practices

When developing your Yelp strategy, be sure to review its content guidelines and terms of service. One of the most important things to note is that you cannot ask customers for a review on Yelp, as that is against its policies. There are other best practices to include in your Yelp strategy:

  • Claim your business page: This enables you to add a description of your business. Be sure to eloquently describe what your business offers and how it’s different from any competitors. Keep keywords in mind so that people who are searching for your products or services can easily find you. You can also add photos, so select the ones that show your business’s best assets.

  • Respond to all reviews, both positive and negative: Responding to positive reviews can be as simple as saying “thank you” or inviting the customer back for another great experience. It shows customers that you value the time they took to write the review. Responding to negative reviews is a way to manage your online reputation and possibly save a customer relationship.

  • Help more positive reviews rise to the top: Yelp’s algorithm moves reviews to the “not recommended” section if the reviewer does not have a lot of activity on Yelp. If those reviewers have given you a five-star review, you can respond by thanking them and letting them know that their review will show up on your page if they have more activity, such as by reviewing other local businesses or adding more friends.

Disadvantages of Yelp

While there are benefits of using Yelp for your small business, there are some drawbacks to keep in mind. Know that your business can get reviews on Yelp even if you have not claimed your Yelp page. As a result, you may have negative reviews online without knowing it. Plus, business owners don’t have control over what is posted because they do not have the ability to delete a review.

In order to enhance your business’s visibility on Yelp, you have to pay to run advertising for your company. For small businesses that have small marketing budgets, paying for Yelp promotion can eat a significant chunk of the annual budget. Plus, paid advertising on Yelp is a long-term commitment, as the review site generally requires a 12-month contract.

Consider Other Review Platforms

Keep in mind that Yelp is only one of several options small businesses have when it comes to online reviews and online reputation management. There are a number of other online review platforms on which you can focus to increase your visibility online and engage prospects. Other review platforms to consider include:

  • Google My Business: Works for any kind of business

  • Facebook: Works for any kind of business

  • TripAdvisor: Best for travel-related and food businesses

  • Better Business Bureau: Works for any kind of business

  • Angie's List: Best for service-related businesses

  • Foursquare: Best for restaurants

When deciding on your online review strategy, focus on the platforms where your competitors are located. This way, you can showcase your offerings and how they are unique compared to other businesses in your area. Regardless of where you concentrate your review efforts, be sure to follow best practices by responding to all reviews.