Half-Star Difference Has Major Impact on Restaurants

November 8, 2012

Article by: VendAsta Technologies Inc.

In a recent paper from UC Berkeley economists found that a half-star improvement on Yelp makes it 49% more likely that a restaurant will sell out its evening seats. In a different study (from Harvard) Micahel Luca found that a one-star increase in Yelp reviews leads to a 5-9% increase in revenue.

The ability to monitor reviews is one of the most valuable features of a Reputation Management tool. Often business owners say that review tracking is worth the monthly cost alone.

But what about the customer side — what separates a good review from a bad review to the hordes of yelpers hunting for their next meal? According to these studies:

  • Consumers are greater influenced by ratings that contain more information as opposed to less
  • Consumer opinions are affected by the number of reviews a business has collected
  • Businesses with more reviews draw more attention
  • Reviews do not impact well-known restaurants (I.E. no one checks the ratings on Burger King)
  • Reviews are favored if they come from Yelp’s certified “Elite” users
  • Consumer opinion is generally unaffected by the size of the reviewers’ network of Yelp friends

On a related note Yelp has been trying to crack down on fake reviews by getting their employees to impersonate Elite reviewers. Their recent “sting operation” penalized businesses that were caught buying fake reviews by blocking their pages with this message.

We can only expect to see these messages more frequently as Yelp continues busting phony reviews. That’s why a strong Reputation Management strategy doesn’t rely on underhanded tactics to try to cheat your way to the top of a site; the best strategy relies on promoting positive results mitigating negative findings and using your networks to build new conversations and strengthen your brand loyalty.