Marketing savant Peter Shankman wrote a blog post earlier this year and made a bet that Yelp will fail within 2 years, and put up $5,000 to back it up. Peter makes some outstanding points that I suggest you read and then come back here for some analysis.
Peter feels Yelp will fail because they are biased and it lacks trust. I could not agree more. Let’s start with trust. When I go on Yelp, I have no idea who is reviewing the businesses I’m looking at. I can decide to yield to the “knowledge of the masses” – if 100+ people have given a business a good rating, then chances are it’s ok. But that’s still shooting in the dark, and what happens when a business in my small town only has 3 ratings? I want to know what my own network thinks of a business. If I can’t determine that, then I want to know at least what locals (people who live in the same area) think of the business. Or maybe somebody who has a strong reputation for giving solid reviews. I’d certainly like to “filter” my results based on any combination of these. No review site today has allowed this until Bizyhood. We feel this is an absolute requirement for consumers – they have to trust the reviews, and the closer you can bring their network to them, the more accurate the result. This is also better for the business – the random (and sometimes malicious) poor review won’t matter as much when my real concern is what people I know and trust think of that business. Just as important, I want to know if the reviews are being done by people that share my sensibilities.
Peter also claims that Yelp is biased – that their entire business model is based on extorting businesses to pay for advertising, which will increase the number of good reviews that show up by default. While this may or may not be true – we’ve all certainly read plenty of online horror stories – I claim this really doesn’t matter. The real issue is that the key metric to measure is Customer Service. Our society has moved into the service economy in full force – the best businesses know they need to treat their customers like gold in order to grow and succeed. This means that you want to hear everything that your customers have to say – both good and bad. NO business is perfect – everybody can improve. The idea that a business should always get 5 stars and be perfect is a flawed concept. A business should be rated not just on the reviews they get, but how responsive they are to their customers and their desire to always satisfy their customers needs. Thus, what businesses really need is a tool that gives them seamless communication with their current and prospective customers. Businesses will pay for this tool – they won’t be required to “pay” for good reviews or to remove bad reviews. Businesses will pay simply for the value of hearing what their customers have to say and taking care of any issues that crop up.
Bottom line – we at Bizyhood agree with Peter, and we’ll add this caveat – two years from now, not only is Yelp doomed, Bizyhood (and services like ours) will take their place – because showing trusted reviews and providing interactive online Customer Service will be the next iteration of Ratings.