Amateur reviews changing approach of small businesses (3-9-2006)

MeetingReview blog: Amateur reviews changing approach of small businesses

Online ratings: It started with restaurants, and now all manner of enterprises find themselves subject to customer opinions

Samy Fars ran a successful restaurant for seven years in San Bruno before opening Cafe Grillades in San Francisco’s Hayes Valley last spring.

Fars planned to introduce the cafe gradually, opening with a small staff and working out the kinks before starting to advertise or even putting up a sign. That kind of soft opening has traditionally worked well in the restaurant business, because professional reviewers often don’t visit a new place until it has been open a month or more.

But from its first weekend, Cafe Grillades attracted a different type of reviewer — average customers who posted their opinions on a Web site called Yelp.

And, to Fars’ dismay, some of them slammed it mercilessly.

“This place truly sucks,” wrote one reviewer. “It’s void of any atmosphere whatsoever, service is nonexistent, food not even worth mentioning. The hospital cafeteria at UCSF is more inviting.”

Fars and his cafe received a painful introduction to a trend in the business world — online reviews of local enterprises.

Today a growing number of companies such as Yelp, CitySearch, Angie’s List and Yahoo Local offer people a chance to rate everything from hairdressers and plumbers to child care centers and dentists.

Restaurants like Cafe Grillades have been the canary in the coal mine, feeling the impact of online reviews long before other kinds of local businesses.

Because people dine out more often than they choose dentists, restaurants so far make up the bulk of online reviews. But as review sites become more established, they will gradually accumulate entries about all kinds of businesses.

For consumers, online review sites offer a valuable storehouse of information to help with daily tasks such as choosing an electrician or a dinner venue.

For small businesses, these sites have the potential to revolutionize marketing and promotion — creating unprecedented opportunities but also, as in the case of Cafe Grillades, some unfamiliar risks.

Five years ago, an ambitious restaurant owner had to worry about the verdict of a handful of professional reviewers at magazines and newspapers. Now that owner faces the judgment of thousands of potential amateur reviewers.

“In this day and age, there’s nowhere to hide,” said Melinda Lucas, owner of Paneless Window Cleaning, a Seattle business that has attracted a significant number of customers through positive reviews on sites like Judy’s Book and Angie’s List. “Anyone can give you a review that can totally make or break your business. It’s made it so you have to be A+ on the ball all the time.”

Some sites charge

Online review sites — or local search sites as they’re known in the industry — operate in a variety of ways. Most allow anyone to become a member for free and then post reviews of local businesses. (Angie’s List is unusual in that it charges members a monthly fee.)

The sites say they try to remove reviews that are deceptive, such as those from a business owner posing as a customer to praise his own products. But they do not remove negative reviews written by legitimate users.

And while most sites solicit advertising, ads don’t influence the content of reviews. They just provide higher visibility for the business, such as a sponsored-listing box at the top of a list of search results.

The sites essentially take a traditional part of the small business world — word-of-mouth referrals — and multiply it to a previously unimaginable degree. They offer small firms the ability to spread the word about great service for free.

“Small businesses are often seen struggling against large brands,” said Jeremy Stoppelman, CEO of Yelp. “They don’t have the $1 billion a year that Starbucks spends on marketing. But Yelp takes their positive word-of-mouth and amplifies it online.”

Some enthusiastic entrepreneurs say that online reviews have become the cornerstone of their business.

Artikel op SFGate, 3 september 2006.

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