Yelp (CSN, Tuesday, Week 12)
competing-with-social-networksyear-twoYelp: an activity-based dating site masquerading as a portal for local business reviews.
Read elements: photos, variety of opinions, funny, accurate (?)
What does accurate mean? Good for 1s (surfacing terrible places), but lots of 3s and 4s. Self-selection among reviewers: fancy restaurants and greasy spoons get the same review.
Generally, common issues for user-generated content (UGC).
Write elements: Meet product! Yelp Elite community = great way to meet like-minded individuals.
Breadth: open to everyone, but must care about food and write well and have free time
Search: lots of authentic, available data on individual Elites (hard to fake tone in hundreds of reviews), but hard to search and self-selection problems (you must write, too)
Interaction: follow/compliment/forums AND parties! But still hard to interact on Yelp.
Takeaway: Yelp Elite = activity-based dating.
Compare Yelp to TripAdvisor: What does social mean in business terms?
(1) Quality of reviews (positive reviews are more nuanced than on TripAdvisor)
(2) Retention of reviewers (they stay longer and they write more)
(3) Profiles are accurate, reviewers have personal credibility at stake
(4) Breadth of reviews: Elites are incentivized to cover new ground and broaden Yelp's base of reviews
But how the heck do they monetize?
Charging small businesses is hard:
-- High-touch sales to low-dollar-value customers => bad margins
-- Diminished incentive to advertise for highly-rated businesses: they already look great!
-- Diminished incentive to advertise for low-rated businesses: why drive traffic to a site that makes your restaurant look bad?
-- What does Yelp offer? Better positioning of positive reviews. Does anyone care?
BUT lead generation is a powerful thing for small businesses.
Options: monetize data/analytics, build loyalty platform, serve as mediator between businesses and customers.
Big takeaway: social strategy is NOT the same as digital strategy.
Digital strategy = How do I broadcast my message to people? (classic advertising)
Social strategy = How do I get people to meet/talk to each other, and then do things for my business?