Marketing & Promotion

May 09, 2011

Written by: Eric Rodriguez

Restaurants understand the growing importance of Yelp, but effectively managing it can be a challenge. I set out to study what really moves the needle on Yelp so business operators can prioritize their efforts accordingly. I compared online reservation volume over time from Yelp.com for 35 restaurants with different Yelp profile characteristics. The data spans 3 cities and comes from the ever-growing Eat Metrics dataset of 2,100,000 pageviews and almost 50,000 online reservations.

Yelp Stars

As expected, a high Yelp rating leads to more online reservations per month through Yelp.com. The real question is: “to what degree?”

Restaurant reservations from Yelp by Yelp stars

Put another way, the incremental value of star improvement is:

Restaurants receive this benefit for an increase in Yelp star rating

Notice the big jump from 4 stars to 4.5 stars. The rarity of the 4.5 star restaurant is likely what drives them so much additional traffic and reservations. (Feel free to speculate for yourself in the comments).

Okay, well that’s interesting, but what can I DO about it?

1. An SF restaurant we know that has over 1,000 reviews and 4.5 stars has a policy to ensure that no guest leaves the dining room unhappy. They consider that to be a primary reason that their Yelp presence has remained so positive.
2. Reply to negative reviews in a respectful way that may appease the reviewer to give you another chance or reconsider their harsh feelings.
3. Thank and appreciate positive reviews to encourage desirable behavior.
4. When one of your guests are clearly having a great time in the restaurant, find a casual way to communicate “we’d love to hear your thoughts on the experience on Yelp!” If they aren’t having a great time, not the best time to mention Yelp.

Number of Reviews

How yelp reviews impact reservations restaurants receive

The popular theory is that restaurants with a large number of reviews are more trusted, popular, and beloved. Therefore, people are more willing to make an online reservation.

Here you can see that restaurants with 500+ reviews get many more online reservations. The above theory about trust and popularity has merit, but there is a more compelling explanation that I'll call Yelp SEO.

Searching “fried chicken” in Yelp will bring up only restaurants with reviews where “fried chicken” was mentioned in their Yelp reviews. Every Yelp review adds content to your page, adding keywords that improve your search performance. Does your restaurant offer great fried chicken but nobody Yelped about it? Bummer. Your restaurant won’t show up in the Yelp search results when someone searches “fried chicken.” This concept also applies to terms like “romantic restaurant,” “best restaurant,” etc.

More reviews means more content. More content means more people find you. More people finding you means more reservations.

Okay, well that’s interesting, but what can I DO about it?

1. Encourage your guests to review their experience on Yelp.
2. Respond to positive and negative reviews. This adds content to the page.
3. If you have a good rating from Elite reviewers, but not enough reviews, consider organizing a dinner for Yelp Elite reviewers.

Number of Yelp Categories

Example of Yelp Categories for Restaurants

This one is my favorite as it was the least expected, but makes sense when you think about it.

The importance of Yelp categories.

This one explains itself. If your restaurant is listed in more categories, more people will find it and go on to make a reservation. For me, the WOW part is how significant it is to be listed across multiple categories.

Okay, well that’s interesting, but what can I DO about it?

1. Navigate to your Yelp profile page and try to add the category by selecting the “Edit” link next to categories.
2. If that doesn’t work, try calling your Yelp rep and show that your menu is significantly x, y, or z, and should be listed in the additional category. Point to any Yelp reviews that reference your cuisine as being relevant to an additional category.

If you kept score to see which characteristics of Yelp profiles were most significant in driving reservations, you’ll find that being found often and easily (review content and multi-categories) can be just as important, if not more important for driving reservations than Yelp stars.

Do you have theories on why the data played out the way it did, or ideas for savvy restaurant operators to benefit from these findings? I’d love to hear about it in the comments.

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