Strategy & Leadership

The Real Value of a Good Yelp Review

Last week my cell phone broke – or, rather, I stepped on it. The screen was cracked and the phone wouldn’t power up. Being of a decidedly old-school nature, I decided to get it repaired, rather than just buy a new one.

A day later, the electronic repair shop emailed me to say the phone was ready. I’d been told it would cost $25 to “diagnose,” plus $50 to repair a shorted circuit and $80 to replace the cracked screen. Too steep for me. My old-fashionedness goes only so far.

But when I went to collect the phone, the shopkeeper handed it back, and it powered right up. He’d gone ahead and fixed it, even though I’d said not to. He smiled and said it’d be $50. I complained that I’d only ever agreed to pay $25 — I’d declined the repair over email. In the end, we settled on $30 … as long as I promised to write him a positive review on Yelp.com.

The whole interaction got me thinking about just how valuable a positive review on Yelp is worth — particularly for a small business, which relies heavily on customer reviews and word-of-mouth advertising.

The electronics shop I dealt with basically chopped $20 off the repair in exchange for a review. An online discussion forum hosted by Yelp is full of similar stories — other businesses have gotten in hot water for openly advertising discounts to customers that promote them online.

A little digging turns up a lot of dirt about people and even entire businesses that, for a fee (of course), are more than willing to game the Yelp system to help your business — either by posting fake, positive reviews, or by hitting your competitors with fake, negative ones. Other sites offer less morally disturbing tips for soliciting good reviews.

In any case, it’s no secret that small businesses have a love/hate relationship with Yelp, but at this point have little choice other than to play ball. A study by the Harvard Business School found that a one-star increase in Yelp ratings among Washington state restaurants led to a 5-9 percent increase in revenue. A separate study found that one negative customer review posted to Twitter, Facebook, or YouTube demonstrably affects the future behavior of an average of 30 customers.

And field service companies, like local HVAC repairmen, are especially reliant on free word-of-mouth advertising and need to avoid business-killing negative reviews like the plague. Short of paying to game the system, however (which we at the SmartVan, Honest Abes that we are, simply cannot endorse), a business has little control over what people say online.

It seems like this is one of those cases where the answer to a very 21st-century dilemma is to rely on those old-fashioned, time-honored tenets of customer service. Reach out to negative reviewers (if they’re real customers) and offer to make things right. Remind your satisfied customers to recommend you to friends. And, of course, don’t give them a reason to trash you in the first place.

Meghan Bender contributed to this report.

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