In 2010, a few businesses - including an animal hospital, a dentist and others - decided to get together and challenge Yelp in court on the perceived understanding that Yelp alters business ratings in exchange for money. They filed several class actions against Yelp at this time - all of which were dismissed in the U.S. Court of Appeals for the Ninth Circuit on September 2, 2014.
Their ruling in this case, known as Levitt v. Yelp, was determined after examining the businesses’ best facts through many attempts - and the court found no extortion or any other wrongdoing by Yelp. As explained in a blog post on the Yelp official site on September, 2, 2014, the "Court also dismissed as implausible some plaintiffs’ claims that Yelp authored negative reviews about them as part of a plot to obtain ad dollars. Instead, the Court noted that the facts only showed that the reviews were likely from actual customers". Additionally, the Court noted that “Yelp is a forum for consumers to review businesses, and huge numbers of consumers do just that.”
Why Yelp Matters
As a small business owner, there is always concern over what your reputation is and Yelp has certainly positioned themselves as a leader in identifying consumer thoughts and experiences while featuring businesses to help educate consumers on where to go, what to do and who to spend their money with.
Darnell Holloway, Yelp's Senior Manager of Local Business Outreach, shares the below insight on why business owners need to use Yelp.
"If you own a business, there are three key reasons why you need to be on Yelp for Business Owners:
- People on Yelp are ready to spend. 138 million people use Yelp each month. A recent Nielsen study found that 4 out of 5 Yelp users visit the site when preparing to spend money. In fact, 89% of Yelp users said they make a purchase within a week of finding a business on the site.
- Businesses can respond to their reviews for free. Once you log in to Yelp for Business Owners at www.biz.yelp.com, you can respond to your reviews with a private message or a public comment. Both positive and negative reviews are worthy of a reply, the former to say thank you and the latter to diplomatically address feedback and provide good customer service.
- A study found that Yelp drives real revenue to Small Businesses. The Boston Consulting Group, a leading adviser on business strategy, surveyed 4,800 business owners to learn the economic impact Yelp has on small businesses. The results are eye opening: small businesses with a free business owner’s account saw an average of $8,000 in annual revenue from Yelp. Even more interesting, the survey revealed that Yelp advertisers benefit almost three times as much, generating average annual revenues from Yelp of more than $23,000."
With 138 million people on Yelp each month, it's hard to argue that Yelp isn't a destination to have your business represented - especially when 4 out of 5 of these visitors are preparing to spend money. And while not every review will be favorable for every business owner represented on Yelp, what they can trust is that Yelp is connecting businesses to consumers - something most small business owners can't do alone. And when you consider the value loss Yelp would put themselves in if they were to alter their online reviews, you can assume they would never do this since Yelp's platform for reviews to be shared is build around the idea of trust. Or at least now you can... after a court proved so.
