Why Yelp is bad for small business (yes I said it!)

yelp elite butterfly (42) Image courtesy of Flickr user calmenda

Yelp has been in the news quite a bit lately with Amy’s Baking Company blaming Yelp reviewers for “endangering their lives” and a San Diego law firm succesfully suing Yelp in small claims court. Yelp is on the defensive and blogged about the fact that advertising does not impact which reviews get filtered. I agree there is no “conspiracy” regarding filtered reviews. I don’t believe Yelp will suppress negative reviews based on being a “Yelp Sponsor”. However, based on the information they disclose in the review and my personal experiences, Yelp indeed indirectly manipulates both the placement and the filtering of reviews.

Yelp’s claim that the filter is fully automated is false

Yelp claims “Yelp’s automated software is designed to protect both consumers and small businesses” I don’t disagree with that assertion. The goal is to automate the screening process to make sure that fake reviews get blocked. However — and for some this may come as a surprise — software is engineered and not born. Yelp didn’t go to the cabbage patch and pluck this filter from a row of eagerly awaiting software programs and a stork didn’t deliver it on their doorstep. Software is written by people and as such can be flawed, manipulated and tweaked. That’s logical. Moreover, software needs to be updated and modified based on changing conditions. If Yelp didn’t do that, the filter would eventually completely fail as savvy marketers game the system.

While Yelp probably can’t move reviews in and out of the filters based on advertising contracts, they could set flags or conditions in their automated software that could penalize a business by filtering more of their reviews. This is common in spam filters–the more suspect reviews a particular business has the more it will logically have in the future and therefore it should be more filtered. Could Yelp mark a business as “advertising contract rejected” and filter those reviews more? Absolutely. Does that contradict Yelp’s claims they don’t manipulate individual reviews for advertisers? Absolutely not. In fact the claims by Yelp are only about individual reviews, not businesses as a whole. I was offered advertising for DoctorDave Computer Repair in Lawrence, KS and said no….and guess what, 70% of my reviews are filtered.

Yelp’s claim that 20% of reviews are filtered is unsubstantiated

Yelp claims

“Yelp uses automated software to showcase the most helpful and reliable reviews from among the millions submitted. Those that don’t make the grade — about 20 percent — are posted to a separate Filtered Review page.”

This number is wholly inconsistent with my personal experiences as a consumer and a business owner. In my case, 70% of the reviews are filtered out by Yelp. I know each of these clients as we have great relationships with them and I can assure you all are real people. While I have no statistics to back up my claim (neither does Yelp provide audited statistics of their claims), the smaller the business the more likely the reviews are to be filtered. Why is this? I suspect advertising. Smaller businesses need cheap marketing more than a larger business that could afford large ads all over the internet. Could refusing an advertising contract cause reviews to be filtered more? Possibly. Yelp doesn’t disclose how the filter works so my guess is as good as yours, but the 20% number doesn’t seem to hold up for small business. My prediction is at some point they’ll be forced to disclose how the filter works because they can’t claim they don’t manipulate the filter if they fail to disclose how the filter operates.

Yelp’s policies are extremely biased against small business

Yelp has an “Elite” program that rewards reviewers with an Elite badge. Elite reviewers have special rights: their reviews are never filtered, their reviews appear first, and they receive invites to special events. What’s the problem here? Sounds like an awesome deal! Quality and active reviewers get featured and rewarded for their hard work. Here’s the catch:

“I am a local business owner. Can I still be Elite?”
Negative. We value all that you do as a Yelper and love your perspective; however, we’ve got to put fairness first. Being a business owner or being closely affiliated one (think spouses, general managers, social media managers, etc.) could present a conflict of interest, or at least the appearance of one. As a business owner, you can understand that it would feel desperately unfair if a competitor was coming into contact with the Elite Squad constantly while you weren’t. Ya dig?”

Ouch. Notice how broad that exclusion is. If you are involved in operations of a business in any way (or married to someone who is), you get excluded from Yelp Elite. That’s pretty broad and I think one reason the results are skewed with the filter, especially related to small business. Frequently with small businesses, everyone is in a management capacity in some way as we don’t have too many “non-involved” staff. Everyone is a stakeholder and given a responsibility in the business. These people understand the importance of word of mouth advertising and what it takes to be involved in a business and thus are more likely to be fair and objective in reviews.

Yelp’s Elite policy, by definition, rewards ignorance of business. If you are related to someone who runs a business, your reviews are unfairly placed below the Elites. If this were by industry and geography that makes sense. A manager at restaurant A shouldn’t be able to influence reviewers of restaurant B. However, if someone is the social media manager at a chiropractor’s office, or is a warden at the local jail, does it make sense as an Elite that a conflict of interest could arise if they review a restaurant? Highly, highly unlikely. The only conflict is with the quality of reviews: someone who understands business is more likely to write a quality review.

To make matters even worse, if you own a business, if your relative owns a business or you become friends with the business owner, you can’t review that business. Heck, you can’t even be in a group with that business. If you are in any kind of networking group such as BNI, a Chamber of Commerce or even Social Media Club, your reviews are considered less valuable. That’s covered in the content guidelines

“Conflicts of interest: Your contributions should be unbiased and objective. For example, you shouldn’t write reviews of your own business or employer, your friends’ or relatives’ business, or businesses in your networking group.”

Who does that leave left able to review reviews? Someone that has no connection with any business or anyone who owns any business. They don’t become friends with the business owner or staff. They don’t have friends of family that work in any management capacity with a business. That’s the real filter and goes way beyond conflict of interest: reviewers must have no connection to the business world at all and the more successful you are at your job (and probably make more money), you are more likely to have your reviews demoted/filtered or simply removed for violating content guidelines. Yelp breeds ignorance so it’s no wonder small business owners are frustrated.

Why care about Yelp at all for a small business, especially one that isn’t a restaurant?

Wired magazine recently showed the silliness of Yelp reviews and if you go by the flow chart, this isn’t a big deal, but really it is.

In my other job as a writer for GigaOM, I discuss the importance of Apple maps integration with Yelp and how Yelp will skew the results. Google also highly rewards Yelp reviews in search results (search computer repair lawrence kansas and see for yourself). Regardless of industry, word of mouth is important. Right now, my reviews are fine and the fact that 70% of my reviews are filtered hurts only because people take the time to write about me and are penalized and punished because it’s my business they are writing about and Yelp is filtering them out. It’s supposedly an automated process, but humans who work at Yelp wrote it. For other businesses such as Wicked Broadband, the fact that the quality reviews are filtered is disappointing and directly impacts the livelihood of their employees. Online reviews are critical to business and Yelp’s filtering out reviews of anyone involved with any business along with it’s so-called “automated filter” hurts small business’s that rely on such reviews

While I don’t necessarily agree that there is a conspiracy to take down a business like Amy’s Baking or another theory that Yelp has a “delete” button for advertisers to remove negative reviews, the facts speak for themselves and until Yelp change’s its policy regarding “conflict of interest” for both Elites and “commoner” as well as discloses discloses the details of the Yelp review filter, small business will continued to be hurt by Yelp, which ironically makes them less likely to want to advertise.

P.S. I can’t ask for reviews of my business on Yelp so I won’t 🙂

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