Is Yelp doing a number on your auto shop?

What is Yelp?

Yelp is a popular online San Francisco-based portal that consumers often use to review businesses's services. Yelp has in essence taken word of mouth's local feel and turned it into a global tool. Yelp was founded in 2004 by a couple of ex-Paypal employees as a social network functioning as a search portal primarily reviewing businesses online. The service has grown to currently host 61,000,000 unique visitors monthly, in a dozen countries, making it the premiere destination for customers to rate and review businesses.

Great idea you say! Well not so much.

There has been a lot of talk about the destructive force of Yelp on small businesses. Smaller businesses that are trying to get established are the ones most affected by the review service.

Does its rating system really have any effect on your business's bottom line?

Yes. Yelp has become the 800 lbs elephant in the room. Because of its sheer size and market coverage, it does what it wants with impunity. In the past few years, Yelp has been receiving more and more negative publicity because of its marketing team's relentelessly immoral practice of corrupting the integrity of online review system. Yelp has been accused of strong arming small businesses into buying their advertisement package by offering to hide the business's negative reviews from consumers. And the advertisement package fees offered to suppress negative review in favor of positive ones range anywhere from $300 dollars to $1,000 or more. Oh did I say a month!

Yelp has become what many consider the online "review mafia", functioning as a cyber extortionist holding your reputation hostage for a fee. With customers flocking to the internet more so now than ever looking for deals and information on services, Yelp is positioned to be even more powerful in the next 5 years than it already is now.

This obvious truth has also given Yelp more and more attention from business owners, albeit with negative review of the service. In an article by Kathleen Richards for the East Bay Express , a popular Bay Area newspaper, Yelp was coined in the titled "extortionist 2.0" for the manner in which they did business. Their aggressive [or else] tactics and exorbitant advertising fees have made many business owners uncomfortable, angry and irritated.

And to further aggravate matters, if a business declines to advertise with Yelp, the service apparently has "legal" ways to convince you otherwise. Most businesses that have rejected the advertising package have indicated seeing immediate increase in unfiltered negative reviews in comparison to highly filtered positive ones.

Sure, businesses have banded together and filed suits against the service but Yelp has managed to survive 2 class action lawsuits in the past 3 years. This is not a testament to their honest and fair business practice but moreso to the prowess of their legal defense team and possibly the inexperience of the plaintiff's attorneys.

An excerpt from East Bay Express's article, Yelp and the business of extortion 2.0" summarizes the problem clearly.

"Such tactics may be legal, but they clearly raise ethical concerns. Yelp touts its web site as consisting of "real people" writing "real reviews." The allegations of business owners who have tangled with the company suggest otherwise.

If Yelp indeed suppresses honest reviews in exchange for its advertisers' money, it is cheating users who expect genuine consumer feedback. Conversely, if Yelp demands payment to remove even dishonest reviews, then advertisers are being cheated."

Yelp should not be allowed to contact customers and businesses that are reviewed on its site, offering them any type of service for a fee. Contacting businesses to make offers to help with better standing on a site that you also police dilutes the efficacy of the service. This should clearly be considered a conflict of interest at the very least.

While I understand that Yelp should undoubtedly be able to capitalize on its service and database of businesses, it should not be in the business of initiating contact with potential advertisers that are also reviewed on the site. Advertisers should be the ones initiating contact with the service and Yelp should also consider discontinuing the unfair filtering process of reviews. They should allow ALL reviews to stand or provide a more balanced and trusted review algorithm.

Our coming articles will touch on a number of concerns and answer some important questions.

Rancho Tires and Wheels
I been contacted too and also Grooupon. I said no, they too expensive!

I only collect 25% of my fees. no way!
  • March 24, 2012
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If not Yelp than what?
  • March 24, 2012
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