Yelp Might Be on Death’s Doorstep, but Some Reviews Still Matter

As important as first-party reviews have become, third-party review sites are still useful tools for customer acquisition.

Jeremy Stoppelman, co-founder and CEO of Yelp. Saul Loeb/AFP/Getty Images

By the end of Yelp’s earnings call last quarter, the company’s stock began a nosedive into what became a nearly 30 percent plunge. The company has blamed advertiser churn during its move to a cost-per-impression model for its inability to hit revenue projections.

While Yelp’s stock scare calls into question its long-term viability, it isn’t time to start prepping a eulogy for online reviews. Many of Yelp’s biggest problems are unique to the company and its limited targeting capabilities. Heavy hitters such as Google Reviews, Facebook, TripAdvisor, and Angie’s List are still alive and well.

Plus, when it comes to buying decisions, online reviews still have significant sway. The Pew Research Center found that 82 percent of U.S. adults read online ratings or reviews before making a purchase, and 40 percent do so every time. Third-party reviews certainly play a role in those decisions, but Google has started to incorporate first-party feedback — reviews that companies solicit and publish on their own sites — into organic search results.

This seemingly minor shift has colossal repercussions for reviews and ratings. First-party feedback suddenly has equal footing with third-party criticism, meaning marketing executives and other leaders involved in customer acquisition must begin generating more reviews for their own sites — or risk leaving a critical marketing component up to chance.

Making the Most of First-Party Feedback

Online reviews are vital in the modern business world, and first-party reviews can help companies make a strong first impression with potential customers. For companies with stiff competition for consumers, a low rating or lack of reviews could do a lot of harm. Apple has since embraced first-party reviews, but the technology company took some flak a few years ago for failing to let customers review Apple products in its online store.

As first-party reviews become more visible on search engines, more consumers will rely on these ratings when making purchases. To foster a recurring stream of positive reviews, follow these five steps:

  1. Optimize where reviews appear on your site. Visitors tend to browse websites quickly — particularly on mobile. Prominently feature reviews on your website to capture their attention as soon as possible.Most customers read detailed reviews to hear about user experiences and discover problems with products, so try to emphasize the positive aspects of your product or service. Kia Motors U.K., for example, features a prominent graphic on its homepage that links to a full microsite of customer feedback on each Kia model.
  2. Help Google find your reviews. Google treats review text and ratings as structured data, similar to how it handles your phone number, address, or hours of operation. To keep searches consistent, Google enforces strict formatting standards for how this information appears on your website — both operationally and technically.Thankfully, the search behemoth publishes the specifications of its technical requirements regarding reviews. Website managers and SEO specialists need to ensure their first-party reviews include author information, body text, a publication date, the item being reviewed, and information regarding their rating scale. While Google assumes sites use a five-point scale — with five being the best rating and one being the worst — sites are free to use a different numerical range. As long as you specify the high and low ends of your spectrum, Google is able to scale your ratings into its system.
  3. Solicit reviews during the customer experience. As long as you don’t ask too aggressively, customers enjoy writing reviews. According to BrightLocal, 70 percent of consumers leave reviews when companies ask them directly. It’s important to note that the quantity of reviews is as important as the quality, according to research from Yext. Businesses with comparable review scores but fewer submissions receive 50 percent fewer clicks than competitors.When I was in Puerto Vallarta, Mexico, I crossed paths with an excellent waiter named Ramon. When the bill arrived, Ramon explained (without being pushy) that the resort is closed during the summer months and that each staff member receives a day’s wages every time a guest leaves a TripAdvisor review mentioning his or her name. He gave every member of our 20-person party a small card with his name, the TripAdvisor site info, and contact details for the resort. Most of us left reviews.Not every story will be as human as Ramon’s, but you can still solicit reviews without annoying your customers. Mention reviews during the checkout process and in follow-up emails to provide multiple opportunities to bolster your reviewer counts. Craft a simple and straightforward message to solicit feedback: “Thank you so much for your business. We value your opinions and hope your shopping experience was stellar. To help us maintain our high standards, we would appreciate you leaving feedback on our website.” Include a link to your customer feedback form, and you’re good to go.
  4. Avoid the temptation to offer review incentives. You want as many reviews as possible, but it’s important to avoid any sort of compensation for that feedback. A team of university researchers recently found that offering cash or compensation for reviews actually leads to less feedback.Consumers have started to distrust these reviews because they view them as biased. Considering that one study found that people who receive compensation for a review are far less likely to leave negative feedback, those suspicions seem to have merit. Customers can sniff out the difference between honest reviews and partisan praise, and the last thing you want to do is have people associate your brand with dishonesty.Still skeptical? Consider the case of the Union Street Guest House, which tried to levy $500 fines against guests who left negative reviews. In response to what owners claimed was a joke, thousands of protesters took to the web to tank the venue’s rating. A few years later, it’s no longer in business.
  5. Use customer feedback to improve operations. It’s great to collect reviews, but it’s even better to actually learn from them. People are basically going out of their way to help your business, so it makes perfect sense to consider their feedback. If several guests mention similar issues, find a way to fix the problem.Le Pain Quotidien, an international chain of restaurants, builds customer trust by turning bad reviews into learning experiences. The company offers gift cards to customers who offer valid criticism and asks them to visit other locations to report back on their experiences — effectively turning them into secret shoppers. This ensures irate customers feel like the company appreciates their feedback, and it allows Le Pain Quotidien to address issues as soon as they emerge.

As important as first-party reviews have become, third-party review sites are still useful tools for customer acquisition. Encourage reviewers to post their feedback on third-party sites as well as your own, and keep the reviews flowing any way you can. Regardless of Yelp’s future prospects — or impending doom — brands that learn to leverage first-party reviews will be leading the pack.

Jay Baer is a business strategist, keynote speaker, and The New York Times bestselling author of five books. He is the founder of Convince & Convert, a strategy consulting firm that helps companies gain and keep more customers through the smart intersection of technology, social media, and customer service. His latest book, Hug Your Haters, outlines how to embrace complaints, put haters to work for your company, and turn bad news into good.

Yelp Might Be on Death’s Doorstep, but Some Reviews Still Matter