A Marketing Conundrum: Should You Advertise On Yelp?

A Marketing Conundrum: Should You Advertise On Yelp?

To understand why Yelp can be a viable marketing channel, you first need to understand consumer behavior and their attitudes toward independent review ratings.

In this column, I am going to discuss a somewhat controversial marketing channel—Yelp. I’m sure that most of you have heard of the platform and many of you have probably used it at some point. I’m also acutely aware that the simple mention of Yelp can evoke strong negative emotions for many business operators. So, if you fall in that latter camp, I’d encourage you to read on as this article may offer a data-centric marketing perspective sans-emotion. I am also going to share some tips that could help you, regardless of whether you do paid advertising on Yelp.

For those of you who don’t know, Yelp is an independent review site where consumers can share feedback and their experience about businesses. It’s one of the most popular review websites consumers turn to before making a decision on which automotive business to select for their next service. According to a 2016 Nielsen survey, it’s clear that Yelp presents major opportunities for certain types of automotive businesses: The study found:

  • 81% of consumers searching online for automotive businesses turn to review sites;
  • 92% of consumers searching Yelp for auto service providers make a purchase after using the platform;
  • Unlike deal sites, 80% of Yelp customers are looking to make a long-term relationship.

Star-Ratings on Review Sites

To understand why Yelp can be a viable marketing channel, you first need to understand consumer behavior and their attitudes toward independent review ratings. According to BrightLocal data, 46% of consumers surveyed in 2018 said they’re more likely to do business with a company that has a minimum of a four-star rating. Just 33% of consumers said they would do business with a company with a three-star rating, and 8% said they’d do business with a two-star-rated company. As you can see, consumers make a major distinction between two- and three-star-rated businesses.  

Is Yelp a Good Option for All Tire Businesses?

I would be remiss if I didn’t suggest Yelp as an effective option for generating leads – when managed properly and without emotion. Of course, I’d like to point out that like most marketing options out there, Yelp is not a good fit for all auto businesses. For example, it’s generally not a good fit for businesses that are located in areas where consumer usage of Yelp is low. You can get an idea of such usage by looking at Yelp profiles of other businesses in your area. If most businesses are experiencing a very low volume of reviews, then Yelp is likely not a fit for your business.

TIP: If your Yelp business profile has less than a three-star rating, you may want to limit your advertising spend on Yelp until you can achieve that threshold.

Also, given consumer behavior related to review ratings, it’s clear that businesses with an average Yelp rating of three stars or higher are best positioned to generate value from this channel. So, if you’re considering spending advertising dollars on this channel, I’d recommend a minimal spend only. 

You may ask: Why should I spend any ad dollars on Yelp if I have less than a three-star rating and little likelihood of success? Let me explain how Yelp works and suggest strategies on how to leverage Yelp advertising to improve your star rating.

How Yelp Works

To explain why you should spend a minimal amount of money in Yelp advertising, it’s important to describe how Yelp works. There are two ways for businesses to get in front of Yelp users. 

  1. Organic Profile Listing: When people search Yelp for an automotive service or product in their local area, Yelp serves up a list of local businesses. The Yelp business profiles with the best average star rating are listed at the top of the “organic” search results (called “All Results”).
  2. Yelp Ads: Ads on Yelp (like Google) show at the top of the page, under “Sponsored Results.” Companies paying for Yelp ads can have their ad along with their star rating pushed to the top of the search results for their desired search categories.  

Appearing at the top of search results helps you get an edge on the competition, since your listing will appear before competitors whose profiles would generally rank before your business in the organic listings section if they have a better average rating and/or high volume of reviews.  It also helps your business stand out in a crowd. If you’re in a large market where a number of competitors have similar star ratings and review volume, advertising can position your business toward the top of those results. Now, if you have less than a three-star rating, the chances of your business profile showing at the top of the organic search results are slim. So, to have a fighting chance at being visible, investing in Yelp ads helps to get to the top of search results. 

Additionally,  one of the few ways of improving your rating (while following Yelp guidelines) is to have Yelp users transact with your business. In order to have a chance at doing so, you have to show up high in their search results.  If you can accomplish that and convince Yelpers to use your business, you have a chance of earning positive reviews and improving your overall star-rating.  Understand that this strategy is unlikely to pay out overnight. You’ll need several months of such investment before you’re likely to see a positive movement in your average rating. 

Non-Paid Methods of Improving Your Yelp Rating 

How you manage your reviews can be a great testament to how you operate your automotive business. It can also directly affect your star rating on Yelp.

By “manage,” I mean frequently monitor Yelp reviews and respond to them in a timely and professional manner. A Harvard Business Review study found that when companies responded to reviews, they began receiving more reviews and saw their star ratings improve.

Managing reviews can help you rebuild your star rating in two ways:

  1. It improves your relationship with current customers. We all want our customers to return and do business with us again. Believe it or not, it’s not uncommon for reasonable customers to post a negative review, then edit that original review depending on how happy or unsatisfied they are once the business owner has handled their critique. So, if you have successfully handled their concerns, then consider asking them to edit their review to show the final results of your interaction.
  2. It shows prospective customers that you care. Consumers, especially Yelpers, are actively seeking ethical and customer service-oriented businesses. Responding to negative reviews diplomatically will show prospects that, even though your business may currently have a lower star rating for now, you are making efforts to satisfy ALL of your customers.

Taran Sodhi is the founder and CEO of automotive marketing consulting group, Conceptual Minds. He can be reached at [email protected] or by calling 877-524-7696.

Article courtesy TIRE REVIEW.

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