(Note: originally written in 2012 and updated in 2017.) If you truly care about your company’s customer service, own a restaurant, and have a few minutes a day to login into Yelp.com, keep reading. Those few minutes you invest could help you increase your monthly revenue if you apply the advice I share, combined with having high quality food, service and cleanliness (QSC) in your restaurant, bakery, or cafe. Here’s: Why You Need to Be On Yelp – Especially If You Own a Restaurant.

Own some other type of store, like a hair salon, spa, auto repair shop or anything in which customers get served in any way? This article is for you, too, if you want to stay in business and keep ahead of your competitors (or, heck, just keep up with the ones who are already actively managing their online reputations).

Do online consumer reviews affect restaurant demand?

That was the question posed in a recent Harvard study that showed that “[A] one-star increase in Yelp rating leads to a 5-9% increase in revenue…,” according to a working paper written by Michael Luca.

Yelp has risen to become THE website that hungry diners search when they want to find out which are the best restaurants, bakeries, cafes and other other places to spend their hard-earned money on. Pulling out their iPhones and Droids to look up local information, these technology-armed consumers are the most educated consumers on the planet. And technology-armed business owners can greatly increase their revenues and remain competitive when they actively manage their online reputations through Yelp, Trip Advisor, GooglePlus/Zagat and even BedBugRegistry.com.

“Let’s YELP it!” declared my 30-something young professional friend several months ago, as we walked downtown Denver, on our quest for food during a break from the business seminar we were attending that day. We had several eateries to choose from in LoDo. Looking around, nothing really made us drool enough to walk in. After pulling out her iPhone and browsing to Yelp.com, my friend had, all within a matter of seconds, immediately started naming some choices where we could eat lunch. Of course, her phone knew where we were.

“Hard Rock Cafe…The Brown Palace Hotel…Biker Jim’s Gourmet Hot Dogs…Oh! The Cheesecake Factory!” That was it. Next thing I knew, we had hopped on to the LoDo trolley and were headed up a few blocks to the Cheesecake Factory where we could choose lunch from a 12-page menu and eat the best cheesecake ever to be invented. Why the Cheesecake Factory, really? At that time, The Cheesecake Factory in downtown Denver had 4 out of 5 stars and the first few reviews we read were positive. If there had been 2 out of 5 stars, which meant more negative reviews than positive ones, we wouldn’t have bothered to go there. Why waste your money on a place where most of the reviewers said was bad and the managers hadn’t bothered to respond to those reviews? They must not care, right? Or they weren’t aware of this powerful habit of the digital consumer: to do her research online (a lot of the time via her mobile phone) before she spends her money.

It was at that moment that I knew our world would never be the same. Once again.

I mean, I’ve had several of those moments over the course of the past 17 years that I’ve been online and in-touch with the connected world. The first moment was when I bought my first computer in the mid-90’s, navigated to Yahoo! and envisioned all the companies and small business owners who would one day be found online and NOT in the yellow pages. That was in 1995.

But here we are in 2012, soon transitioning into 2013 and it astounds me that so many business owners have not yet heard of Yelp; and aren’t building a community of fans, friends and followers in Twitter or Facebook or haven’t optimized their websites to be found in Google. And most are not even capturing email addresses to stay in touch with customers on a weekly basis.

A 2011 Cone research showed that “four-out-of-five consumers have changed their minds about a recommended purchase based solely on negative information they found online. This is up from just 67 percent of consumers who said the same in 2010, according to the 2011 Cone Online Influence Trend Tracker. Positive information has a similar effect on decision making, with 87 percent of consumers agreeing a favorable review has confirmed their decision to purchase. But, negative information is gaining traction and is now just as powerful in tipping the scales against a recommended purchase.” – From the 2011 Cone Online Influence Trend Tracker.

Practical actions steps you can take to manage your Yelp

YOU are ahead of other business owners who aren’t taking time to go online to see what people are saying about their products and services because you’re here right now reading this blog post. I’d like to help you succeed and stay in business.

So here’s my advice: yes, go set up your free Yelp account and your GooglePlus Google My Business profile and add your hours of operation and photos (and a video would be great, too), but more importantly, be sure you apply my five tips for managing your online reputation on a daily or better yet, a minute-by-minute basis via your smartphone in your pocket. Do these things to set yourself apart from competitors and earn more good reviews and more stars on your Yelp page. We now know that more stars means more revenue. More tips about: Why You Need to Be On Yelp – Especially If You Own a Restaurant:

1. Set up Google Alerts for your business name and your name. When those are mentioned online, within minutes, you’ll receive an email alerting you of the mention and linking you directly to it. Get Gmail on your phone and keep your phone on you. As a busy, busy restaurant manager, you barely have time to go to the bathroom, let alone, go sit down and do payroll and inventory and manage your online reputation. So be like your customers: use your phone like a tool that helps you get through the day smartly. Note: there is another resource but at the time of this writing it was having a problem querying GooglePlus: MyReviewsPage.com. You can set up an email notifier there, too.
2. When you get a Google Alert, read it right away. (That’s why you should have your phone on you). Chances are, it’s a review that just went live on Yelp or GooglePlus (sometimes both) or elsewhere online. Respond to it immediately. IMMEDIATELY. Yes, I’m shouting. Why? Because this is your business, your revenue, your kid’s future college fund and your survival. The consumer that just posted a review about your place of business cared enough to take the time to do that. You should at least take time to thank her or him. But, better than that….go do this…(see my tip #3).
3. No matter if the review is negative or positive, first begin with the words “Thank you.” You could model or modify the following script: “Thank you for taking time to post your review. I very much appreciate that you came in today to eat lunch (get your hair styled/buy some cupcakes/have hot chocolate/get your vehicle fixed) with us and….(here is where you need to address the fact that either the reviewer had a good experience or bad experience. For a negative experience, see my tip #4. For a good experience, read on:) “…your kind words just made my day!  I’ll be sure to share this with my team ( or staff/assistants/the gals and guys) who work hard here every day. Please say hello next time you’re in!”
4. What if the review was negative? Depending on what happened and how detailed the review was, you’ll know what to say. Basically, apologize and offer to make it right. Invite them back in and ask if they could please call you as soon as possible so you can give them a complimentary meal (or haircut or oil change) on you. All you do is treat this the same way you would if the customer were standing in the middle of your dining area (or shop) and was loudly stating her opinion about her negative experience.Remember this review is ONLINE (and yes, I’m shouting again). So, however you would handle this in-person, handle it online the same way but go above and beyond because everyone is watching online.Remember: four out of five people who will see this negative review will decide NOT to come in to your place of business that day -and maybe not so much because there were one or two bad reviews out of 25 reviews but, more likely, because you, the owner, never even bothered to respond. The online consumer thinks that if you’re this way with your online reputation, how are you at managing your business? (Sort of like having dirty bathrooms: “Wow, if the bathrooms are this dirty, what’s the kitchen like?”) Pretty soon, several days and weeks and months go by and those technology-armed consumers who do their research in Google don’t bother to spend their money in poorly reviewed places on Yelp, GooglePlus, etc. One day, you look around and the place is empty and you’ve become another casualty of the 21st century of commerce: the dinosaur who couldn’t adapt. Please don’t let that happen. Our economy needs smart business owners can adapt to a fast-changing world of commerce.
5. What if you suspect a review was a fake one? Yelp has created a filter to kick out reviews that it feels are suspect. These filtered reviews don’t count as part of your potential 5-star rating but they are still posted online at a link at the bottom of your Yelp profile. Read more about Yelp’s filtered reviews here. Note: the Wyoming-Colorado Better Business Bureau has human-verified complaint system and takes more detailed steps than Yelp and Google does. 

Are you still not convinced? Still resisting?

In case you still aren’t convinced that you should manage your online reputation – at least manage your Yelp and GooglePlus reviews – here’s another study that was done that proves that people read online reviews and make a purchase decision based on those reviews: a 2011 Lightspeed Research survey discovered that after reading just two negative reviews about a company, consumers won’t bother doing business with that company, no matter that two total strangers posted those reviews.

BizReport.com reported this about that survey:
“….a quarter (24%) said they had changed their mind about buying a product or service after reading two bad reviews while a further 39% said three negative reviews would deter them from making a purchase. Just 8% said they found online reviews unreliable.”

What can you, the business owner, do to educate your customers to go post their positive reviews online?

First of all, making your customers happy on a consistent basis is the number one thing you can do to build a positive reputation (online and everywhere) and you can achieve that by recruiting good, happy and productive employees whom you properly train and certify before they ever come near your customers.

When educating your customers about online reviews, definitely do NOT bribe them. And do NOT ask your employees to post reviews because this is a conflict of interest. Legally, you cannot ask your employees to pose as consumers because this violates the Federal Trade Commission’s rules.
Here’s what happened to the first company fined for doing that:

“…the national plastic surgery company Lifestyle Lift had the dubious distinction of being the first to be punished for astroturfing. It agreed to pay $300,000 to New York State for having its employees post positive reviews of its products without revealing their connection to the company, a practice the state called “deceptive commercial practices, false advertising, and fraudulent and illegal conduct.”  http://technology.inc.com/managing/articles/200912/reviews.html

Yelp and Google’s policies on asking customers to post reviews

“Does Yelp mind if I get a freebie in exchange for my review?
Actually, we do. Please don’t write a five-star review of your local watering hole in exchange for a free drink. That said, if you independently luck into a free drink or two because of your charming personality, by all means, enjoy the largesse but don’t forget to mention the free perks when writing your review.”

Google says this:
“Conflict of interest
Reviews are only valuable when they are honest and unbiased. Even if well-intentioned, a conflict of interest can undermine the trust in a review. For instance, do not offer or accept money or product to write positive reviews about a business, or to write negative reviews about a competitor. Please also do not post reviews on behalf of others or misrepresent your identity or affiliation with the place you are reviewing.”

So, if you decide to give your customers instructions on how to post a review online, make it clear that you can’t give them anything other than your thanks. Make it clear that you believe in always following the rules and respecting them. You could say: “It’s up to you if you’d like to post a review online about us. We really appreciate it! Here’s a card that has step-by-step instructions, just in case…” Then hand them your card with step-by-step instructions. Your customer will be impressed with your integrity for following the rules.

And if you take my advice to continually monitor your reviews, you’ll see when your customers post them. If it’s a customer whom you already have their contact information on file, why not send a thank you card? Those customers who post their reviews without any prompting from you did it out of the goodness of their hearts. At this point in time, since you did not offer a freebie for her to post her review at Yelp, you could legitimately reward this person for her review. Give her flowers or give her a free shoulder rub if you own a spa or a 15% discount on her next visit.

An increase of one more star in your possible 5-star rating can add almost 10% revenue

It’s those consistent 5-star rated businesses that are thriving and increasing revenue because more and more online consumers find them after consulting their smartphones for where to invest their money that day.  The business owners who respond, show that they truly care.

The least you can do is thank that person for taking the time to let you know how her experience at your place of business went.