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Tuesday, May 22, 2012
The influence of Yelp on Sacramento restaurants
by Krissy Holst, published on November 20, 2011 at 4:35 PM
Storyline: COMMUNITY
Image by: Alex Arnold Photography
With 2,624 Sacramento restaurants reviewed on Yelp, the capital city has thousands of restaurant-goers using Yelp to share their dining experiences with others. A recent study done by Harvard Business School Assistant Professor Michael Luca found that local restaurants increase revenue 5 to 9 percent per star they gain on Yelp.
The Sacramento Press wanted to see if this finding held true for restaurants in the central city. Comments and ratings on Yelp appear to make a big difference, but Sacramento restaurant owners and managers say they aren’t so sure.
Luca combined data on Seattle restaurant revenues that he collected from the Washington State Department of Revenue and Yelp ratings of the restaurants in his sample and found that no matter the type of restaurant, as long as it was not a chain, revenue increases correspond to ratings on Yelp.
Sacramento seems to have a mixed bag of restaurant owners and managers who agree and disagree with the findings of the study. Restaurants vary in both the attention they pay to their Yelp scores as well as the significance they believe the scores have on overall revenue and the quality of the reviews themselves.
“We email our customers who leave negative reviews on Yelp. It gives us an opportunity to rectify situations that do sometimes unfortunately happen,” said Mathew Parker, general manager of 58 Degrees & Holding Co. “We have had people sit in our restaurant and Yelp us at the same time. The good comes with the bad on Yelp.... I bet Yelp ratings do affect our revenue, but I am not exactly sure how.”
Image by: Alex Arnold Photography
Sacramento restaurant owners and managers who avidly follow their Yelp scores tend to agree that not every comment and star rating is accurate but there can be helpful critiques that are worth looking at.
“When we first opened, we checked it every day,” said Ryan Pierini, general manager of BarWest. “We definitely pay attention to Yelp and it most often supports the feedback we already get from our customers in person. We do have to take some Yelp reviews with a grain of salt.”
BarWest has made some menu changes since first opening. Fries coming with burgers is one of those changes.
“The complaints on Yelp were consistent with the complaints we had heard in person about fries not coming on the side of burgers,” said Pierini. “Yelp helps support what we already know and so we can make changes.”
Now, burgers at BarWest include fries on the side.
Luca’s study found that, by 2009, Yelp had provided the broadest review coverage of Seattle’s restaurants, supplying reviews for 69 percent of all the city’s eating establishments.
“We know that people are aware of our score and that it affects their perception of the restaurant,” said Noe Hernandez, general manager of Zócalo. “We don’t see people coming in though and telling us that they came to Zócalo based on our ratings or a reviews that they read on Yelp.”
Some Sacramento restaurant owners and managers question if people choose a restaurant based on reviews at all or if customers just hear of a restaurant because they Yelped for places near them with good food.
Image by: Alex Arnold Photography
“We follow our Yelp score, but we haven’t found that it affects our revenue. Rarely do I hear anything about the score of the restaurant, but I do hear about people finding out about us on Yelp,” said Aziz Bellarbi-Salah, manager at Aioli Bodega Española.
Different restaurants have expressed differing opinions on the importance of either star ratings overall or individual comments.
“We typically check up on comments when we look at Yelp, but we don’t pay too much attention to ratings. We pay more attention to individual comments and reviews and take that as constructive criticism,” said Michael Ng, general manager at OneSpeed.
Manager Mathew Parker of 58 Degrees & Holding Co. disagreed.
“The words and star ratings do not always match up,” Parker said. “People can post really inaccurate reviews that have nothing to do with a business and are just looking to complain. Yelp only shows a general trend of a restaurant through star ratings.”
Some Sacramento restaurant owners don’t believe that Yelp makes much of a difference in consumer choice and don’t spend any time looking at Yelp.
“We don’t pay attention to Yelp at all. We don’t really care about it,” said David English, owner and chef of The Press. “We may have guests come in because of Yelp, but how it correlates to revenue and if it makes any difference overall, I don’t know.”
Sacramento restaurant owners and managers are uncertain of the effects of Yelp ratings on revenue, but what does seem to be agreed upon is that Yelp is a force that is difficult to measure, and they are undecided about how important Yelp scores actually are. If Sacramento restaurant managers and owners pay attention to Yelp or not, Yelp is actively growing in both popularity and restaurant coverage.
The Sacramento Press took to the streets to find out when and how people are using Yelp, if they consider the reviews on Yelp to be trustworthy, and whether the website is as influential as some predict in shaping consumer decisions in Sacramento.
Image by: Margaret Hoyer
Kenny Truong, a 29-year-old Elk Grove resident who works for the California Department of Health Care Services, said that he mainly uses Yelp to identify restaurants before trying them out.
Though he’s never written a Yelp review, Truong said he’d be likely to if he had an extremely positive experience at a business or restaurant.
Truong said he tends to stay away from businesses that get consistently poor reviews, but otherwise his decision to try out a new place is not highly affected by the number of stars on a restaurant’s profile.
“Most of the time I give businesses the benefit of the doubt because people have different tastes,” Truong said.
Image by: Margaret Hoyer
Amanda Moore, 23, is a human resources administrative assistant in Midtown. While she said she often uses Yelp to find new restaurants, she has also written approximately 15 reviews on the website.
“I’m most likely to go on Yelp when I’m happy with a business or when I’m seriously dissatisfied,” Moore said.
Image by: Margaret Hoyer
Jonathan Williams said he was inspired to write his first Yelp review after a positive experience with a new veterinarian he found on the website.
Williams, a 56-year-old volunteer at the Sacramento Gay and Lesbian Center, said he uses Yelp frequently and tends to favor businesses with the most stars.
Williams said he likes to do a lot of research before trying out something new and has found Yelp to be a fairly accurate tool in the process. So far, he said, he’s never gone to a highly rated restaurant or busines and disliked it.
Consumers should be cautious when using information found on the Internet, Williams noted. But he also said he has found most Yelp reviews to be trustworthy.
Image by: Margaret Hoyer
Clark Paramo, a 22-year-old student at Sacramento City College, said he mainly uses Yelp to see what others have said about restaurants and businesses he’s been to.
“I like to read the funny negative reviews,” Paramo said.
Though he’s never written a review himself, Paramo said he does have friends who use their smartphones to access Yelp and post comments while sitting at a restaurant.
Paramo said he finds that the majority of reviews accurately reflect the quality of restaurants and businesses he’s been to.
Image by: Margaret Hoyer
Dean Goding, 44, of West Sacramento, said he became familiar with Yelp through his job. Goding works at Mike’s Bikes on I Street in Sacramento, and he said he often checks the website to see what customers are saying about the shop.
While he encourages customers to comment on their experience, Goding said he thinks that others might use Yelp to purposefully hurt rival businesses by posting negative reviews, which decreases the credibility of ratings.
Goding said he also uses Yelp to check out new restaurants and tends to avoid the poorly rated ones. He has never written a review, and he said he prefers to show his support for a businesses in person.
“If I like a place, I’ll go back,” Goding said.
Kelly Priley, 31, is a mother and skincare products saleswoman. She said that she has found Yelp reviews helpful for researching service companies such as spas and salons.
Priley said she uses Yelp both before and after trying out a business, but that ratings don’t necessarily deter her from going someplace new.
“I’m pretty optimistic and open to trying things,” Priley said. “Maybe I’d be prone to go sooner or be more excited about a place with a higher rating, but I mostly use Yelp as a reference.”
Priley said she has submitted a few reviews but prefers reading other people’s comments to writing comments herself. If she likes a business, Priley said, she’s more likely to tell friends and use word-of-mouth advertising to share the news.
Overall, Yelp appears to be a popular reference regardless if a user submits a review. Though some admit to having reservations about the accuracy of reviews posted on Yelp, the simple star rating system helps consumers to at least identify businesses that might be worth a visit.
Is Yelp an effective tool for restaurant hunters and a financial benefit to businesses alike? Do you use Yelp, and if so, does it influence your choices as a consumer? Please share your comments below.
Margaret Hoyer contributed to this article.
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We pray to The LORD that YELP EXTORTION is exposed in the media and the US Supreme Court! Manipulation of reviews is extortion! We pray that our LORD shows no mercy for all the emotional damage and EXTORTION they have inflicted upon small business owners and the children they support. YELP is a brood of snakes and scorpions and deserve to BURN ALIVE for their extortion, lies and slander. PRAY PSALMS 119 FOR THEIR DESTRUCTION!
Say five times: "Archangel Gabriel destroy YELP Now!"
YELP WILL BE BANKRUPT SOON! ALL PRAISE TO YHWH! The righteous and powerful LORD of man and earth!
The cynicism directed towards the new user making a highly positive comment has another potential effect: It's actually easier/more reliable for a business owner to register (or hire stooges to register) and make negative comments about competitors than to make positive comments about their own business. So any tendency on Yelp's part to remove positive comments they think are insincere doesn't solve the insincerity problem, it's just likely to make it more negative than positive.
From what the folks interviewed for this article said, it sounds like many consumers are willing to give a restaurant a shot even if there are a few negative comments about it on Yelp.
On the flip side: it also seems that if the reviews are ALL negative the restaurant is pretty much in trouble-- but if so many people have had a bad experience and were inspired to write about it, the place probably deserves it.
When in New Orleans I found it indispensable in locating a hip and delicious restaurant. and then several subsequent bars.
The star rating system is really only a jumping off point. I Start trying to find a place that has 4.0+ stars. If I can find a place like that after filtering for location and price, than we are off to the races. A high star rating while rare is no guarantee that a place is worth my visit, but it points in the right direction. After that the real key is reading reviews of like minded people. This really can help you decide if the place is a good fit.
Often times I feel bad reviews are the result of unmet expectations. Are you expecting a fancy white linen restaurant but you get paper on the table and lots of families with crying kids all around you? If that happens, no matter how good the food is, your opinion of the place will be more negative than if you knew more about it.
I'm sure I could write a whole guide to getting the most out of Yelp. And while there are many things that could be done to improve the site (litigation non-withstanding), my biggest problem with Yelp is that it isn't more heavily used outside the United States!
How do you decide who is like minded, versus somebody who sounds like minded but who may be a paid reviewer?
In that case I wanted to read about the people that did the all you can eat/drink combo. I wanted to read about the late night ambiance. I wanted to read about how the place worked for groups. For me Shabu is about a group outing, so reading reviews that catered to that experience were far more helpful to me.
One thing to keep in mind, the real difference in Yelp scores is fairly small. The best restaurants are usually no higher than 4.5 stars (there is currently only 1 restaurant with a reasonable number of ratings over 4.5, that one is the Kitchen) and the worst are rarely below 3, so the magnitude of the "Yelp impact" is limited.
Another thing to keep in mind, the Yelp score probably has a close correlation to the quality of the restaurant and an extremely close correlation to public perceptions about the restaurant. No duh, right? Well in terms of the econometrics that is a really big deal. Unless very effectively controlled for, what the study is likely telling you is that good restaurants, which happen to have good yelp scores, make more money.
To comment on individual Yelp entries, one may click on "useful" or "funny." Sometimes I would so like to be able to click on "over-the-top" or "get-over-yourself."
I have almost twice as many reviews of my business than show up on my page. Yelp filters out revewers without credibility. A reviewer with a single review who doesn't have any Yelp-friends isn't very credible in their eyes because they aren't participating enough in the Yelp community. Yelp is more than just a review site: it's also a social networking site.
So I always tell people who write reviews that if they want to have their voice heard, they need to make connections with others on the site as well as write a lot of reviews.