In 2011, Paul Millington opened a Fred Astaire Dance Studio in Cary, N.C. He was a seasoned professional ready to provide lessons in partnership dances, such as ballroom and swing.
Like many entrepreneurs, he found himself quickly loaded with tasks to run his business, and one of them was managing his Yelp listing, which he checks daily. He has received dozens of reviews, mostly from satisfied customers, but he has also received negative comments as well.
The first one was a misunderstanding that the reviewer corrected immediately, but the second was a bit more troubling, since it came from a local competitor. Millington called Yelp, explained the situation and asked for the review to be removed. A representative explained that the company does not remove negative reviews for any reason.
According to Millington, Yelp said that "their algorithm would determine whether or not a review was featured.” Since this particular review seemed suspicious, it has not been featured.
Many entrepreneurs contact account managers at Yelp trying to get negative reviews removed, and more positive reviews publicly posted. All businesses get told is, “The algorithm makes the decision.” So how exactly does it work?
Darnell Holloway, a senior manager of local business outreach at Yelp, provided some insight into the mystery. Yelp has software that evaluates every single review based on quality, reliability and user activity on Yelp, he says. Here's a breakdown:
Quality: The review must have new, helpful and pertinent information. Yelp is unlike the synthesis of traditional advertising as portrayed on Mad Men. For example, in traditional advertising a happy kid drinks orange juice in a commercial. It appeals to emotion. You, as the customer, have had orange juice.
Yelp does the opposite. It collects data to find trends that create a user/customer experience.
Holloway explains, “The experience that people read about online is going to be in line with what happens when they go to that business.”
The Yelp algorithm will usually disregard total raves and total bashes of companies because they are not content rich.
Reliability: Yelp works off data points. When a user sets up his or her account, they have the opportunity to give Yelp information about themselves. Points include information such as a user’s date of birth and city. Users can sync their Facebook account with Yelp. The more information Yelp has about a user, the more “reliable” he or she is.
User activity: Activity tracks how often these "reliable" people write pertinent reviews. These are the reviews that get featured. Users with less activity, fewer friends or fewer reviews are less likely to have their review recommended. That does not mean with absolute certainty it will not be recommended.
Nearly every business can be found on Yelp. Once, you, as a business owner, claim a listing, you gain access to a free suite of tools that allow you to respond to reviews, and track how many people are visiting your listing. Yelp encourages adding photos. Listings with photos usually receive more activity.
It is also worth noting that Yelp tracks reviews written from the same IP address to ensure people who work at a company are not writing these reviews. Customers should not be encouraged to write a clearly biased review.
With great power. Yelp has 132 million visitors every month. According to Nielsen, four out of five users visit the site when they want to spend money. There is a ton of money to be made and lost on Yelp.
“These reviews have an awful lot of power," says Dr. Peter Zandan, global vice chair of research at Hill + Knowlton Strategies. "It is not as dramatic as the success or failure of a business, but in terms of incremental sales they have a huge influence.”
When businesses are five-star rated, with glowing reviews that are information rich, this can mean a bump in sales. However, the opposite can be true.
“We know from research that negative comments are weighted more than positive comments,” Zandan says.
A good example of this is the ads that run around political campaigns. Candidates have won elections by running ads with negative comments about their opponent instead of highlighting their own agenda.
When approaching a negative Yelp review, Holloway explains, “A business should think about the policy they have about face-to-face interactions.”
Big issues for service professionals. The reviews site has a really important role in our economic system, especially with small businesses, and that responsibility is a social contract. Yelp is a technology company that has put the ability to critique any business in the hands of anyone. Most people can go to ballroom dancing and make a fair judgment of what they learned. It is straightforward.
In other areas, such as law or medicine, this is more difficult. Additionally, certain fields are bound by confidentiality, and an owner cannot publicly respond to a negative comment on Yelp in a specific way.
Jessica Kaminski, a marketing associate at Goldberg Jones, a Seattle-based family law firm primarily representing men in family court, knows all too well what Zandan is speaking about.
“It has been challenging to follow Yelp’s recommendation of publicly replying to each negative review,” she says.
The law firm has refrained from posting public generic responses due to the sensitive and personal nature of each case, which has worked against it.
"We have had clients call and cancel consultations, saying that after reading our Yelp reviews they were not interested in our services,” Kaminski says.
Goldberg Jones, like many businesses, has tried to flag reviews to get them taken down. But like all businesses, it was told, “Sorry, but we do not take sides in factual disputes. If a review appears to reflect the user's personal experience and opinions, it is our policy to let the user stand behind their review.” This leaves all the more power in the hands of a Yelp user, and businesses are at the mercy of whomever they may be.
Fighting back (or not). Currently, there is no way for a business to defend itself against a dissatisfied customer no matter how big or small they are.
Millington, the owner of the dance studio, says that he wishes "Yelp was more transparent in allowing business owners to see who the reviewers are. Businesses should be allowed to contest a review by requiring reviewers to respond or have the review removed.”
Zandan points to the format of movie-reviews site Rotten Tomatoes and the level of sophistication of its reviews, which are collected from experts who are professional writers and critics, as a possible change to Yelp.
“Sooner or later," he says, "the model of their reviews will have to change [with] enough push back.”
Comparing Yelp to the non-profit Consumer Reports, Zandan adds, "Due to the fact that it is a public company, they are supposed to overreach. It is in the business to make money.”
Copyright © 2013 Entrepreneur.com, Inc.