Executive Insights | July 2010 | By Blair Chancey

Why Bad Reviews Are Good

Luther Lowe, who heads local business outreach at Yelp.com, tells you how to harness the site’s 11 million reviews to improve your restaurant.

Luther Lowe heads local business outreach at Yelp.com.
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What do the restaurant reviews on Yelp.com usually say?

By in large the reviews on Yelp.com are positive. In fact, about 85 percent of the reviews are three stars and above. But you can’t please 100 percent of your customers 100 percent of the time. Everyone is going to get a negative review at some point.

Should operators respond to negative reviews?

Restaurant owners have a very important voice on the site. They can go to biz.Yelp.com, and they have the ability to respond privately or publicly. Responding to reviews can be done on a case-by-case basis. We recommend first responding privately and in your response embracing the mantra that the customer is always right, even if you might personally disagree with their testimonial about your restaurant. You want to respond as diplomatically as possible.

Very often, when consumers are contacted by apologetic restaurant owners, they’ll change their two- or three-star review to a four- or five-star review.

Is it worth responding to positive reviews?

It’s an option, but we don’t encourage it. When someone has written a five-star review and gotten a response from a business owner saying, “Thanks. We’d love to have you back in here, so you can pick up a gift certificate,” we generally frown on that. One thing that looks annoying to the Yelp.com community is when someone has positive reviews, and they’ve used the public-response feature to reply to every single person’s review. It goes too far.

My advice is to start with your most negative review, and reach out to those people diplomatically. Keep an eye on it, because I’m not guaranteeing people will go back and change their ratings. But responding to the positive reviews is not going to really move the needle.

What can restaurant operators learn from those negative reviews?

It goes without saying that if you get a couple negative reviews next to some positive reviews, it’s nothing to lose sleep over. If you’re getting review after review that says your bread is stale, guess what? Your bread is stale, and you need to fix something in your operation.

It’s a great resource tool. It’s like having free secret shoppers coming in. It’s a free tool that you can use to gain insight into what’s happening in your operation. What we heard from business owners is that it gives them eyes in the back of their heads. Those negative reviews actually offer legitimacy.

Can you explain how negative reviews can be good for business?

When restaurateurs look at their reviews and see a few one- and two-star ratings, they’re freaking out. But if a consumer looks at the page, and the restaurant has an overall rating of 4.5 stars, he can tell those few bad reviews are outliers. Those negative reviews actually add legitimacy, because if it was just all five-star reviews nobody would believe it. They would think the business owner had some sort of control over it. It evokes skepticism from the people who are trying to find out about the restaurant.

Has any inaccurate information ever been posted to Yelp.com?

One-hundred percent of our 11 million reviews are 100 percent accurate [laughs]. Just kidding. If there’s an inaccurate post, business owners should respond privately, politely correcting the consumer. If the consumer is unresponsive on the private message, I’d suggest responding publicly.

Are there many franchised concepts on Yelp.com?

It’s really great for finding local gems. But with that said, we’re really excited to see large brands starting to engage on Yelp.com. Some of these brands are using our enterprise solutions on the back end that allows us to build a hierarchy. So a Mimi’s Café or a Lettuce Entertain You franchise can be alerted, see, and respond to reviews at any of their stores throughout the country. They can assign a local or regional manager, so he can respond and also have the headquarters level be aware of that so they can respond on the individual location comments also.

Where is the trend of online reviews heading in the future?

There’s a big shift toward mobile, bridging the online search and offline transaction with our iPhone application, for example. Twenty-seven percent of our searches come from mobile apps. So the smart phones are major platforms for discovery. That’s going to be something that every franchise and national brand should pay attention to.

One of the great things about our business toolkit is the special-offer option. So I can look at my smart phone and stand on the corner of any major city and find out where the nearest promotion or happy hour is.

What’s the first step for operators who are looking to get involved on Yelp.com?

Chances are that their restaurant is already there. They just may not be aware of it. A lot of times businesses discover their Yelp.com pages when they do a search on a major search engine of themselves. Because we rank very highly with major search engines, one of the top results is their Yelp.com listing. If that’s their experience, that’s likely their customers’ experience as well. They have nothing to lose by going on and clicking the “Is this your business?” link, unlocking their free tools, and getting engaged.