CustomerThink Founder/CEO Bob Thompson interviews Darnell Holloway of Yelp about the value of customer reviews to small business owners, and how best to engage and build relationships.
- Growth in Mobile Usage and “Showrooming”
- How Reviews Affect Consumer Buying Decisions
- Opportunity to Learn and Improve
- Encouraging Reviews, the Right Way
- Tips for Effective Customer Engagement
Interview recorded Sept. 10, 2013. Transcript edited for clarity.
Bob Thompson:
Hello, this is Bob Thompson of CustomerThink. Welcome to another episode of Inside Scoop. Today, my guest is Darnell Holloway, who heads up Yelp’s Business Outreach Team. He helps business owners understand how to manage in this world where customers increasingly look to online reviews before making a decision. Among Darnell’s many activities, he hosts local sessions throughout the U.S., runs webinars, blogs, and quite a few other things. Before joining Yelp back in 2009, he worked in the banking industry as an equity research broker.
Darnell, thank you so much for joining me on Inside Scoop.
Darnell Holloway:
Thank you so much for having me, Bob.
Bob Thompson:
I think it’d be hard to find somebody who hasn’t heard of Yelp at this point. It’s a very popular, very busy site. Let’s start off with just a few quick stats on Yelp, in terms of its visitors, scope, reach, whatever you’d like to share.
Darnell Holloway:
For folks who may be less familiar with Yelp, it’s a popular review site and mobile app where consumers go to look for information on local businesses. As of last quarter, we had over 108 million monthly unique visitors coming to the site, another 10.4 million people using Yelp’s app for mobile devices, and we’ve got 42 million reviews and counting on the site. One of the main reasons why consumers are coming to Yelp in such large numbers is because they find value in the user-generated content that we have on the site.
Growth in Mobile Usage and “Showrooming”
Bob Thompson:
Are you seeing a big uptake in mobile engage versus regular PCs?
Darnell Holloway:
Mobile is really interesting, Bob. Here’s the thing, we just talked about some of the numbers, 108 million monthly unique visitors to the site and 10.4 million on mobile. But 45% of searches on Yelp are now coming from the mobile app. What we find is that people in mobile actually have a greater sense of urgency, or what I like to say is a stronger intent to purchase. Every second now, a call is being generated to a local business through one of our mobile apps or GPS directions are being mapped out to local business through one of our apps.
Bob Thompson:
So, they could be using it, driving around, trying to find a place to eat, a store or whatever, but what about being actually in a store, this so-called showrooming phenomena where consumers in an electronics store, they’re looking at the goods and want to figure out what to buy? Can you figure out if consumers are using it in that fashion, as well?
Darnell Holloway:
Oh yeah, absolutely. I can tell you personally, every time I go out to a restaurant, I pull out my Yelp app. In a lot of restaurants there are what are called review highlights, so you can see what dishes, for example, are mentioned in a lot of reviews with high frequency. That really helps me sort of figure out what are the most popular dishes. Usually the review highlights are pretty spot on for the restaurants.
Another functionality of the app is people have the ability to check into businesses or purchase Yelp deals from businesses once they are searching for the businesses or once they actually come through the door. If I check into a business, all my friends on Yelp see that I’m there. I can also push that out to Facebook and Twitter, which I do quite often. I’m sure I’ve probably been defriended by quite a few people because of my obsessive check-ins, but that’s great word of mouth for those businesses because everyone can see that hey, I’m at this place. Maybe it’s a place that they want to check out.
Same thing with Yelp deals. Those are basically standing deals that live on a business’s page. Businesses can also put up gift certificates, as well, and also call to actions, which are a new feature that we kind of rolled out. Basically, we just want to provide as many ways as possible for businesses to close the loop with consumers that are searching for them and turn them into paying customers.
How Reviews Affect Consumer Buying Decisions
Bob Thompson:
Let’s talk about small business owners specifically. When I go around my hometown here, a lot of restaurants and small shops, the gym I go to, the one thing I think they all have in common is lack of time. They’re all stressed. Talk a little bit about what is the benefit for a small business owner getting involved in Yelp. I don’t mean just running ads. I know you provide ways for advertising and marketing, but more of this engagement and actually getting involved, trying to engage with consumers and not just viewing Yelp as something consumers can do independently.
Darnell Holloway:
Absolutely. I guess just to take a step back, you pointed out we do make money by selling search ads, but there are a ton of free tools on the site that businesses can use to really help them connect with customers. There is definitely a financial incentive even to use the free tools on the site. There was a study that was done a few months ago by a Boston consulting group, and they surveyed several thousand business owners across multiple verticals. What the survey showed was that on average, just by engaging with the free business owners that count on Yelp, business owners were seeing an annualized increase of about $8,000 in revenue. And then people that chose advertisers were seeing an annualized increase of about $23,000 in revenue. That was some pretty compelling data.
From there in terms of the time, totally understandable that businesses don’t have a lot of time to be on Yelp, Facebook, Twitter all day because they’ve got a business to run. I think that’s really one of the interesting things about our platform is that it’s not really a huge time suck. I’d say maybe if it’s your first time logging into the free business owner’s account, you’d maybe want to give yourself about 30 minutes to an hour just to get all your content photos, everything uploaded on your page to really build out your listing. But then from there, you can set it and forget it, as we like to say.
If you do start to receive reviews, you may want to go in there and respond to some of those reviews, which is another feature that I think is really beneficial for business owners because they can respond either privately or publicly to people that have reviewed their business. Again, after that initial investment of maybe a half hour to an hour to familiarize yourself with the site, it’s pretty user-friendly. Then from there, you don’t really need to spend a ton of time maintaining your presence on the site.
Bob Thompson:
What kind of research have you seen about the impact of reviews? broadly speaking, do reviews have a big influence on what consumers buy?
Darnell Holloway:
Absolutely. There was actually a recent study done by Neilsen looking at sort of the impact of Yelp, and specifically how Yelp users are engaging with the site. What they found was that first, four out of five Yelp users visit the site when they’re preparing to spend money. These are people that are near the bottom of the purchasing funnel. I think the most compelling and interesting takeaway from that study is they found that virtually all Yelp users, 99 percent, in fact, have made a purchase at a business they found on Yelp, and nearly 90 percent of them did so within a week.
Again, there are over 40 million reviews on the site. That’s a big component of why people are coming to the site. If you’re on the business side, the way to think about that is if somebody is looking at your Yelp listing, they already have a need for whatever it is that you do. They’re probably going to look at your listing and maybe one or two of your competitors to really narrow that down. That’s why you really want to add content to your page, positioning yourself in such a way that you’re standing out.
Opportunity to Learn and Improve
Bob Thompson:
It seems to me that one of the effects of social reviews, in general, is that it ups the ante for businesses to do a better job. There are examples of companies that kind of market their way to success. Until you kind of pull back the kimono and can share through research, or now in the last few years through social media, what’s really going on, the consumers have been left blind. It just seems to me that one of the effects of social reviews such as Yelp is it would encourage, businesses to do a better job because if problems are being reported and it’s impacting the stream of buyers coming in, it would seem to me you’d want to fix that.
Darnell Holloway:
Yeah, and in my role here at Yelp, I’ve had the opportunity to speak with thousands of business owners across North America. One of the trends that I see with the folks that are really winning in the world of online reviews is they are looking at their review content as a form of market research. What the savvy folks are doing is they’re saying well, OK, wait a second, if this person did have a complaint, rather than sort of get emotional about the complaint, really read what it says and think about is there something I could do differently or better? From there, really implement that feedback.
I know folks that also go out and read their competitors’ reviews, as well, just to get a sense of what their competitors are doing well and not doing well. Then they’re capitalizing on that information. The great thing is this is all information that’s now free out there on the Internet. Folks used to actually pay money for this type of market research.
Bob Thompson:
Are you seeing a shift in attitude on the business owners’ side, thinking more about using this as an opportunity and not perhaps as a threat?
Darnell Holloway:
I think it varies. It’s understandable because if you own a small business, it’s like a child. No one likes it if their kid gets called “ugly,” right?
Bob Thompson:
That’s right, absolutely.
Darnell Holloway:
Having said that, there’s definitely some psychology at play when you’re talking about online reviews. What I mean by that is what we found as a consumer, business owners look at reviews differently. We’re talking about the same set of reviews here. Business owners are going to focus on all their negative reviews. In fact, most business owners tend to know their negative reviews by heart. Consumers, on the other hand, are just looking at the overall trend. They’re saying, “The majority of people seem to like this place. I’m going to go ahead and check it out.” It’s really important for business owners to keep that in mind that if you do have a few negative reviews, it’s definitely not the end of the world. From there, it is important to join the conversation that’s happening about your business.
Encouraging Reviews, the Right Way
Bob Thompson:
As I’ve looked at Yelp and used it in my own buying, it seems that having lots of reviews is also an important thing. Very happy or very unhappy people are more likely to respond to any kind of feedback opportunity. You want to have a lot of reviews so consumers will get that more balanced view. How should business owners encourage all of their customers to submit reviews?
Darnell Holloway:
First, it’s important to actually debunk a myth that you just alluded to. I think it’s a common myth that people are only going to write reviews if they’re unhappy. In fact, 79 percent of the reviews on Yelp are three stars or higher. In fact, there are on a percentage basis, far more four and five-star reviews written than one-star reviews. That makes sense. For the most part, people are now sort of using their Yelp accounts as kind of a lifestyle blog. They’re just talking about their experiences with various businesses. Having said that, though, it is important for businesses to be savvy about how they go about gaining more reviews. Specifically, you really want to do that in an organic way.
Bob Thompson:
So, paying them for reviews is not something you’d recommend, I assume?
Darnell Holloway:
Absolutely not. We actually recommend that businesses take a bit more of a hands-off approach. I know that may sound counterintuitive, but what we’ve learned is it can become a slippery slope. It is absolutely OK for businesses to go out there and then tell folks that they have a presence on Yelp, but from there, you really want to take a step back and let your customers connect the dots on their own.
We’ve seen people sort of slide down that slippery slope and get in the habit of either offering freebies or outright trying to pay for reviews, or even aggressively soliciting reviews. We do have mechanisms in place to make sure we’re displaying the most useful information for consumers. I think it is probably a good time to talk a little bit about what those are. Specifically, we do have a review filter that’s built onto the site. We’re pretty transparent about the fact that we don’t highlight all of the reviews that are posted on Yelp. In fact, as of August of this year, we were only highlighting about 75 percent of the reviews that were submitted out of the mini millions.
Bob Thompson:
Why are the other 25 percent filtered out?
Darnell Holloway:
There are a couple of things that our review filter software looks at. We really try to weed out reviews that may be fakes or shills, but also reviews that may be inherently biased or reviews that are coming from users that we don’t know a lot about. It wasn’t very long after our initial launch that we saw our first obviously fake review pop up on the site. The reason for that is back in the day, the mentality of most folks was that to win in the online world, you simply go on and leave some testimonials for yourself and then leave a few negative reviews on your competitors’ pages, and that’s really how you dominate. Because that mentality was so prevalent, we decided we wanted to do things a little bit differently. We wanted to make sure we were providing content that was actually useful for consumers.
The review filter is pretty effective at what it’s designed to do, however, it can pick up perfectly legitimate reviews, as well as the sort of fakes and shills. I’ll give you a great example. I was at an automotive conference in Orlando a few months ago, and a gentleman said, “Hey, I think your review filter system’s broken.” I said, “Why?” He said, “Every single positive review that has been posted to my page is being filtered out. I know these are from actual customers.” I said, “Well, are you doing anything out of the ordinary to receive reviews, anything inorganic?” He said, “Well, I’ve got a laptop set up on my showroom floor so when somebody buys a car from me, I’m just having them create a Yelp profile.”
Bob Thompson:
The IP address is the same for all those reviews, right?
Darnell Holloway:
Right, so you can imagine what that looks like on the back end of all the sets of 50 new Yelp profiles I’ve created in my IP address, leaving glowing reviews for this business where he’s also logging into his account. That’s why we really recommend that you take a bit more of a hands-off approach. However, that doesn’t mean you have to do nothing. In fact, we see a lot of people out there that again are winning in the space, but they’re doing it organically. A great example is business cards are low-hanging fruit. You think about how many business cards you hand out. I see a lot of folks now with icons for Yelp, Facebook, Twitter on their business cards, so consumers have that touch point.
Bob Thompson:
What you’re saying is gently remind them that it’s available, but don’t try to overly orchestrate what they’re doing.
Darnell Holloway:
Exactly, you want to leave bread crumbs, a trail for them to find.
Bob Thompson:
Certainly there are some consumers like me—I don’t tend to post on Yelp. I’ve tried to remind myself more than once because I have some local restaurants I really love. I think a little reminder would just nudge me a bit to think about that without going overboard and trying to overly incentivize me.
Darnell Holloway:
In addition to sort of the business card play, we’ve got signage that our legal team has approved that anyone can download. If you actually just Google Yelp and Flickr, there’s a ton of signage on there that says “Find us on Yelp.” You can put that up in your window. We also have a couple of features that really encourage user engagement. We’ve got check-ins and the Yelp deals that we talked about. Somebody checks in at a business or they purchase the Yelp deal, the next time they log on to the desktop site, they actually get a reminder from us that says, “Hey, you were at this business, you checked in or you bought a deal from this business. Do you want to leave them a review?” That’s our way of encouraging user engagement.
Tips for Effective Customer Engagement
Bob Thompson:
Let’s say somebody does leave a negative review and it gets through the filter, so it’s presumed to be legitimate, what do you recommend a business owner do? Should they be writing a response to each one? I have to say I’ve read through a lot of reviews in the last couple of weeks for something I’m working on right now. I see that pretty rarely. To me, it’s pretty impressive that the business owner will take an effort to respond, explain the situation, what they’re trying to do, apologize. Most negative reviews are just left there. What should they be doing, in your experience?
Darnell Holloway:
You want to take it on a case by case basis, but it is a good thing to respond to reviews. That’s really the only way that you’re going to move the needle on the reputation management front, as opposed to just doing nothing. We’ve heard from Yelp users directly that say they enjoy hearing back from business owners if they’ve left a review, whether it’s positive or negative because it just shows that the business owner is engaged and actually cares about their opinion.
It is important to point out that if you are going to respond to a reviewer, you do want to be diplomatic. You want to think about what your customer service policies are and how you would sort of handle that situation face to face, and apply that same logic to a written response. What you don’t want to do is hit the caps lock and fire off a snarky, emotional response to the user because that really doesn’t help you at all, as the business owner. Maybe it might make you feel better for five or ten minutes.
Bob Thompson:
Do you offer any advice, training, tips or whatever on how to handle these diplomatically? You’re right, maybe one phone call, if your customer service skills had an off moment, you can survive that, but once it goes online, boy, it could go anywhere. How do you help people with that?
Darnell Holloway:
There is actually a business owner out in Austin, Texas, who hosted a webinar with us a few months back. His name is Wade Lombard, he owns Square Cow Movers. His philosophy is “stop, drop and roll.” What he does is if he ever gets a negative review, the “stop” part is give yourself a cooling off period. He doesn’t immediately respond. He “drops” his sort of ego and really looks at what the person is saying and does sort of a deep dive, in terms of on the business end, did we actually screw up here? Screw-ups happen. Is there anything we could do to improve? And then from there, just kind of “roll” with it. It’s important to be diplomatic. If you respond to people, you may get a response back. They may actually update their review, which is entirely possible. As long as you’re consistent about it and you’re also consistently providing good customer service, you’re ultimately going to be in a better position than your competitors who are choosing to ignore their reviews.
Bob Thompson:
I think that’s great advice. I think it has taken businesses some time to come around to the fact that social media is actually a two-way medium. Consumers use it to learn and to engage with each other, but businesses kind of started with the notion of using social media for marketing. Using it for real engagement, I think review sites like Yelp are a great opportunity.
These are all great tips, Darnell. Just to wrap up, do you have any other quick tips that you would offer to business owners to help manage their online reputations?
Darnell Holloway:
You really want to think about all of the different platforms out there as a tool in your tool belt. You also want to think about what your goals are, from a marketing standpoint and really focus on the platforms that make the most sense for you. If your goal is really to get in front of people who are not familiar with your business, I think Yelp makes a lot of sense. If your goal is to really deepen relationships with sort of existing clients and customers, you’ve got things like Twitter where you can get followers or Facebook’s where you can get likes from people that have already been to your business. On the Yelp side, again, there’s a lot of free tools out there for businesses to play around with. They can go to biz.yelp.com to claim their business owners account and get up and running in just a matter of minutes.
Bob Thompson:
Darnell, thank you very much. This has been quite an illuminating discussion and I really appreciate you taking some time to share your thoughts with our CustomerThink community.
Darnell Holloway:
Thanks a lot for having me.
