Does Yelp Matter for Local Businesses?

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Yelp is one of the most talked about review sites out there. Its top-secret algorithm makes for a lot of chatter, and many business owners find themselves wondering if Yelp even matters for local businesses.

A staggering 91 percent of people read reviews, so as much as you may think your reviews don’t matter, nearly 100 percent of your potential client base is dying to know what others think about your business.

Another interesting tidbit? A slightly smaller percentage of online shoppers, 84 percent to be exact, trust online reviews as much as a personal recommendation.

That being said, it’s easy to understand why reviews are one of your biggest assets or largest downfalls as a local business. In the end, does Yelp matter for local businesses? Absolutely!

On this page, we’ll talk about how Yelp works for business owners, whether or not Yelp reviews are reliable, and how you can manage unsavory reviews.

If you’d like to learn more about review management, or talk to a specialist, feel free to give us a call at 888-601-5359.

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How does Yelp work for business owners

When you find yourself asking “does Yelp matter for local businesses like mine?”, the answer is yes! It’s important to understand how Yelp works for business owners before you can understand why Yelp matters — especially to local businesses.

There are a few steps you’ll have to take before you can start earning reviews from your valued customers.

1. Claim your listing

First, you’ll have to claim your business listing on Yelp. In many cases, your business already exists on Yelp, and you just have to claim it.

It’s extremely important to do– especially if your business already exists, so that a stranger isn’t running your page.

2. Update information

You’ll want to look at your existing profile and make sure that everything is up-to-date. Check things like your business address, hours of operation, and contact information. At this point, you’ll also want to add photos of your business.

3. Do some search engine optimization (SEO)

Put your local SEO skills to use and optimize your Yelp listing for search engines and users. To make sure your listing is SEO-friendly, you’ll want to add valuable keywords to your listing that you know users search for online.

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How do Yelp reviews affect businesses?

Earning positive Yelp reviews for your local business is a great way to show potential customers that previous visitors liked their experience at your restaurant or storefront.

Like we mentioned, well over half of your potential customers trust online reviews that they read on review sites like Yelp. But how do your Yelp ratings really affect your business?


Michael Luca, a professor at Harvard Business School, performed a study on Yelp reviews and came to find that each additional rating star that was added to a review meant a five to nine percent increase or decrease in revenue for that local business — depending on if a star is earned or dropped.

Local businesses are most affected by the star system, while places like chain restaurants are not. When thinking about how Yelp works for business owners, you have to consider both the positive and negative impacts of the platform.

Potentially negative impacts of Yelp reviews for local businesses

However, there are a lot of things to consider when determining how Yelp truly works for business owners. Although there is potential to see an increase or decrease in revenue due to star ratings, there are a lot of things that govern a patron’s star rating — and a lot of them can skew your star rating.

  • The person simply doesn’t like what you offer. The issue with subjective reviews is just that, they’re subjective. Someone may rank your local business modestly, but it’s just because personally, they don’t like your products or services. It doesn’t mean that someone else won’t. If someone knows they don’t like Mexican food but goes to your Mexican restaurant and leaves a bad review, it could just be because they don’t like Mexican food.
  • The person is in a bad mood. You could provide your patrons with the best experience they’ve ever had, but if they’re having a bad day and feel that one small detail was off, they could leave you a sub-par review.

Positive impacts of Yelp reviews for local businesses

Just like there are potential negative impacts of reviews on Yelp, there are also benefits as well.

When you have a high number of positive reviews, users will be more apt to visit your business. However, 25 percent of people have to know that the reviews that they’re reading are authentic before trusting them. This is one reason you should never pay for reviews.


In addition, 73 percent of review-readers say that written reviews leave a stronger impression that star ratings. That being said, your collection of written reviews hosted on Yelp can have a hugely positive impact on your local business.

Lastly, if you have a lot of reviews, you’ll be far more likely to attract someone to your local business since nearly half (46 percent) of people look for the number of reviews you have — and use that factor to determine how they feel about your business.

Are Yelp reviews reliable?

When thinking about the potentially negative impacts of Yelp reviews, it often brings up the point of whether Yelp reviews are reliable.

As a business owner, there isn’t anything you can do to keep someone from leaving a bad review based on a bad day or a subjective opinion — and potential customers should understand that though Yelp reviews are reliable at large, it is a case-by-case basis.

The water becomes a little muddy in this situation since outside readers don’t know the circumstances under which someone left the review.

Yelp matters for local businesses — here’s how to make the most of the platform

Like we mentioned, it’s nearly impossible to control the kinds of reviews you get on a platform like Yelp. Even if you provide the world’s most perfect experience, you will always have people that are unsatisfied.

However, there are a few ways to make the most out of the platform for your local business.

Entice good reviews

As a local business, it’s important to entice good Yelp reviews so that others will be inclined to visit. But how do you do so?


  1. Keep business cards at your register. Satisfied patrons can’t leave Yelp reviews for your local business if they don’t know you’re on Yelp! Try keeping Yelp business cards at your register that say something like “Review us on Yelp!”. This will let customers know that you have an online presence and that it’s important to them that you provide a review.
  2. Post your star rating around your local business. If you’re proud of your star rating, Yelp can send you stickers denoting that you’re well-liked on Yelp! You can put these stickers on registers, doors, and windows to let customers know that you’re highly-rated among customers.
  3. Talk with your customers during every transaction. The more shoppers feel tended to and taken care of, the more likely they’ll be to write a great review. Treat them with the utmost respect, use manners, and ask how they liked their experience. If they enjoyed their visit to your local business, be sure to ask them to write a review on Yelp!

Respond to bad reviews

Bad reviews are a part of having a local business, and although they can sting, you can use them as an opportunity to show how much you care.

Here are some tips for when you receive bad reviews on Yelp:

  1. Always respond to negative reviews. One of the golden rules of being a local business owner is that you should always respond to negative Yelp reviews. If you don’t, you’ll appear as though you don’t want to deal with negativity surrounding your business. It can also come off as though you’re not willing to make up for someone’s bad experience with your business. This can be hard to do, especially when the patron is inconsiderate or overbearing, but it’s important that you always keep your cool. If a situation is being magnified or wrongly recalled, simply ask the customer to give you a call and provide your contact information. This shows potential customers that you are willing to listen to your customers and shows the dissatisfied customer that you’re willing to make things right.
  2. “The customer is always right.” Another golden rule of business? The customer is always right. You should never argue with a customer in a review — it will only deter potential customers. Nobody wants to give business to an argumentative manager, so don’t be that person!

Does your local business need help managing your Yelp account?

It’s no secret that Yelp matters for local businesses, but if you need help managing your Yelp account, WebFX is here for you. We’ve answered your burning Yelp questions on this page like, “does yelp matter for local businesses?”, and “are Yelp reviews reliable?”, and if you’re ready to amp up your Yelp efforts thanks to the answers, we’re ready to help.

We’re a full-service digital marketing agency that provides services to local businesses and enterprise companies alike.

We provide review management services that can help you take care of bad Yelp reviews, and we can coach you on the best ways to entice satisfied customers to leave positive reviews.

If you’re interested in learning more about what WebFX can do for your local business, be sure to contact us online, or give us a call at 888-601-5359!