Yelp Success vs. Ratings and Reviews

By Jay Baer

Consumers trust companies less than ever before. In that maelstrom, ratings and reviews are a life raft of information.

Takeaways

  • Ratings and reviews, particularly those left on your own website, are more important than ever.
  • New research reveals that compensating customers for reviews might not be an effective strategy.
  • Go ahead and ask your customers for reviews via email — they’re a completely different group than the people reviewing you on Yelp.

Jay: Hey everybody, it’s Jay Baer. Are ratings and reviews more important than ever? I think the answer is yes.

Look, we’re living in crazy times, and people trust companies, organizations, institutions, and leaders less than they ever have before, and perhaps for good reason. In that maelstrom, you find ratings and reviews as a raft, a life raft, of information. People trust ratings and reviews more than ever before. In fact, 85 percent of consumers say that they use ratings and reviews to help them make purchases. And, amongst consumers who are 45 years of age or younger, 30 percent of them use ratings and reviews every time they purchase, for everything.

Now, you may have heard recently that Yelp is having some trouble — a big ratings and reviews site, of course. Their traffic’s down, their ad revenue is down, they lost one billion dollars worth of market capitalization in the last few months, but Yelp’s troubles do not mean the ratings and reviews industry is in trouble — in fact, quite the opposite.

Ratings and reviews are stronger than ever, partially because we now have two types of reviews we need to pay attention to. We have third party reviews, which are Yelp, TripAdvisor, any other website that’s not your website that contains reviews about your business. That’s a third party reviews platform. Now, first party reviews, the reviews that are on your own website, are also important — perhaps equally important, and in some cases, more important. Google is starting to emphasize first party reviews in their search rankings, which means the more reviews you have about you on your own website, the better your site will be ranked. That is important.

So, more and more businesses are wisely asking their customers to leave them reviews, typically via an email nudge. Now, where this gets sideways, however, is that lots of businesses are thinking, “Okay, if we need more reviews, what we’re gonna do is we’re gonna tell customers that we’re gonna give them something if they us a review. We’re gonna give them money, or a free burrito,” or whatever the circumstances may be.

But that actually has the opposite effect. New research in the Journal of Marketing Science finds that when you actually pay customers to leave a review, they leave fewer reviews. Not more reviews — fewer reviews. Why? Because it makes people feel gross. Right? It makes them feel like you are prostituting them for their reviews. So you don’t need to pay customers to leave reviews — you just need to make it easy to leave a review.

Another note on the first party versus third party: Some really interesting research from Northwestern University found that the people who leave first party reviews, the people who leave reviews on your own website, are not the same people who use Yelp, TripAdvisor, any other third party platform. There’s actually a totally separate group of customers. So if you ask people to leave a review via email, you’re not cannibalizing your Yelp, Google, TripAdvisor-type reviews. It’s actually a different set, which is great news for business, because now you get two sets of customer insights that can help you build your business better. So, lots of amazing new research on the topic of ratings and reviews.

We’ll link it all up here in this issue of Convince & Convert ON. Remember, ratings and reviews? Nothing to ignore. In fact, more important than ever.

Originally published at www.convinceandconvert.com.