Last night, some 300 Yelpers converged upon the iconic Charline McCombs Empire Theatre for Yelp’s Backstage Pass, the biggest Yelp event to-date in San Antonio. For three hours, attendees sampled food and drink from more than 14 of the city’s most beloved eateries, bars, and brands – all donated by the participating businesses. The Empire Theater donated the space for the event, which was free and open to anyone with a profile on Yelp who RSVP’d. Monetary donations at the event benefited Las Casas Foundation.
The party drew the “talkers of the town” – individuals from the community who, as active Yelpers, have a proven propensity to write and talk about the event, the vendors, the musicians, and the things they ate and drank. The value to participant businesses, then, as San Antonio’s Yelp community manager Gloria Carey explained, is real. “Yelp is like word of mouth on steroids, so promoting your brand at this event definitely has its benefit.” Carey and Stephanie Guerra, also known as Puro Pinche, emceed the evening.
One such vendor was Mike Grodner, president and CEO of Genius Gin out of Austin. “I like being out here, making drinks and talking to people, talking about gin,” said Grodner. “Maybe if they like the gin, maybe they’ll buy it.”
Research backs up the anecdotal observations. Recently, a survey of 4,800 business owners conducted by the Boston Consulting Group sought to determine Yelp’s impact on small businesses. The study found that just by claiming a free business owner’s account, the businesses saw an average of $8,000 in annual revenue from Yelp. Two other studies, one from UC Berkeley and one from the Harvard Business School, came to similarly positive conclusions about the benefits imparted to restaurants with higher ratings on Yelp.
Noting that last night’s wildly successful event generated a waitlist of more than 420 hopeful attendees, and considering the 102 million monthly visitors worldwide to Yelp’s website, it is safe to say that Carey’s work in San Antonio and Yelp’s efforts across the globe are paying off. But what exactly does the company, which was founded in San Francisco in 2004, intend to do, and how does it make a profit?
“Yelp originated to give the consumer a voice,” explained Carey, “to help them make a qualified, educated guess.” It is an online forum for finding, reviewing, and engaging in dialogue about both good and bad local businesses. Business owners can respond to reviews privately or publicly, although data from the first quarter of 2013 show that users rated the majority (66%) of reviewed businesses with four or five stars.
Yelp generates revenue through advertisement sales – a fact which has given rise to numerous myths about the validity of reviews. One such debunked assumption is that businesses that pay for advertisement have more control over their reviews than non-advertising businesses. Untrue, according to Carey and the Yelp website.
“Consumer reviews for advertisers are handled exactly the same as consumer reviews for all other non-paying businesses,” the website states. “Advertisers never get special powers to remove a negative review, add a positive one or move reviews around on their page.” Businesses that pay for advertising on Yelp are labeled accordingly, and do receive perks such as the ability to add a slide show or video to their page.
The robust online community of Yelpers has produced more than 39 million reviews since the website’s inception. Yelpers run the gamut in terms of age, education, and income levels. In San Antonio, the “Weekly Yelp” newsletter makes its way to 91,000 in-boxes. Users interact electronically, sending compliments on reviews, “following” other users, and adding “friends,” as well as in real life (IRL), through both sponsored and unofficial Yelp events.
The most active Yelpers can achieve “elite” status by being nominated by another elite user, by a community manager like Carey, or by nominating themselves. Elites have access to an elite-only calendar and special gatherings, like the recent “Beer Cocktails & Farm to Pizza” event at Stella Public House in the Blue Star complex.
The IRL interactions of Yelpers bring together individuals with similar interests in supporting local business, eating at interesting, unique places, and sharing their opinions. Not surprisingly, then, sparks do occasionally fly.
“Almost every com manager I know, knows a couple that’s met through it,” said Carey. “Off the top of my head, I can think of two engaged Yelpers that met at elite events.” She said that Yelp staff often joke by saying, “Yelp isn’t a dating site … or is it?”
For those 400-plus who weren’t lucky enough to get a spot at this Backstage Pass party, Carey has something bigger and better in the works for the fall, so stay tuned on Facebook, Twitter, and of course, Yelp.
Miriam Sitz works for Accion Texas Inc., the nation’s largest non-profit microlender. A graduate of Trinity University, she blogs on Miriam210.com and sells handmade goods on TinderboxGoods.com. Follow her on Twitter at @miriamsitz. [Click here for more stories from Miriam Sitz on the Rivard Report.]
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