Yelp's successful community-driven expansion strategy
Kids that grew up in the 90s know what living on the edge truly feels like. Trying out a new hair salon always carried the risk of running into a stylist that gave you flashbacks of the iconic blind barber from "Dumb and Dumber."
Today, we have the likes of Yelp, Trip Advisor, and Google My Business to help us avoid those disasters. Online reviews have indelibly changed how we eat, shop and entertain ourselves.
Here's the brand story of Yelp, one of the first online review platforms. We'll explore how the platform's community-centric approach towards its users and local businesses has made it the icon it is today.
Yelp: a quick history
Yelp was launched in 2004 as a business directory service. The online crowd-sourced platform was a huge leg up from the yellow pages of that era.
It aimed to guide regular people regarding local businesses based on other customers' experiences. The brand targeted both consumers and local businesses.
Reviews on the platform ranged from car workshop recommendations and local motels to tattoo saloons and cleaning services. Yelp gave consumers a platform to share their positive suggestions and any grievances.
For business owners, Yelp opened up a new avenue for customer interactions and advertisement opportunities through collaboration with the platform.
Product and values
How did Yelp turn a free service into a successful business model still thriving today? By leveraging the power of generating a sense of community among its members, consumers, and business owners.
Yelp structured the site to motivate people through the praise and attention that their reviews received. As a result, its most attractive offering has always been information driven by user experiences.
Here's how the reviewing process typically goes: a group of friends holds a reunion at a café. Unfortunately, due to the many attendees, the café struggles to fulfill orders as quickly as the group expected, leaving some guests less than fully satisfied. These members then post a review on Yelp.
The café owner, also a Yelp community member, uses the platform to explain their side of the situation and offer compensation to the unhappy customers.
That’s how Yelp introduced a new way of handling customer complaints and feedback leading to quick resolution of the issue for about 77% of small businesses that use Yelp. That can’t be done without cultivating the sense of community among members that Yelp has successfully achieved.
Yelp's offerings have been further refined thanks to its policy of valuing user feedback. Moreover, the transparency and accountability generated by user reviews have encouraged thousands of businesses to up their game and improve service quality.
The platform offers an equally valuable service to business owners. Through Yelp, they can communicate their brand story and vision to consumers and market products and services at a fraction of the cost of traditional advertisement avenues.
Reviews aren't the only service offered on the platform. The company makes its top contributors feel like they have membership in an exclusive micro-community.
They regularly schedule offline meet-ups for the Elite members called "Elite Yelpers." Games, activities, and polls keep users engaged and build that community feel among Yelp's regular members.
Humanizing brands helps them sell more and appeals to the consumer's desire to support businesses they love because of what the company stands for. This sense of community helps businesses and consumers and opens up opportunities to collaborate on causes.
Pillars of the strategy
Getting people to spend time writing reviews on an unknown website was a challenging task. In 2007, four years after its inception, Yelp struggled to gain traction with consumers and local businesses.
Their biggest challenge was to make consumers see the potential of Yelp as an invaluable resource for everyone looking for honest reviews and recommendations. The other issue was networking with local business owners, both physical stores and online, and educating them about how partnering with Yelp could benefit both — all to be accomplished on a shoestring budget.
We've broken down how Yelp not only managed to achieve these targets but surpassed them by keeping community building at the core of all it did. Below are the seven strategic cornerstones that made Yelp the brand it is today:
A dual-targeting plan
The first strategy Yelp adopted to establish itself as an authoritative site was targeting consumers and businesses to join the platform for added reliability. It provided networking opportunities to micro-communities of frequent reviewers by arranging in-person meetings, strengthening their desire to get back online, brag to their friends, and prove their worthiness.
The more members joined in and started reviewing businesses, the more companies began to understand Yelp’s potential role in their growth and started to join in as well.
Collaborations that led to success
Another pillar of Yelp's success has been strategic partnerships. The brand collaborates with local and e-commerce businesses and ensures the timely integration of social media platforms on its website and mobile app. As a result, users can share Yelp reviews on all popular platforms, such as Facebook and Twitter.
Users can easily set up an account using Facebook. Once a member, friends can see where you've been or places your friends have checked in. Users can also share reviews on their Twitter feed thanks to its built-in integration on the platform.
Yelp’s partnerships have been designed to add features to their platform, not just get more businesses on board. Their collaboration with GrubHub lets reviewers place online orders directly from Yelp’s page or app. Similarly, Yelp teamed up with Clover to help small business owners better manage their Yelp pages.
Facilitating excellent user experience
Yelp focused on meeting its consumers where they were from the get-go to further foster a sense of community among members and encourage users to share their brand experiences with others. The Yelp mobile app makes the reviewing processes an extension of the experience for its users while helping Yelp gain more traction and visibility on online forums.
The design features and tools offered on Yelp's website and app are another way the brand keeps users coming back for more. Search filters, the option of sharing photos, and the exact pin location on the map make the reviewing experience fun and interactive for members, and that's not by accident.
Offering more than just reviews
Yelp is now a review platform with over $1 billion in annual revenue. How did Yelp accomplish that? By tapping into the potential of community building. The top management at Yelp understood a very core human concept right from inception; people want to leave positive reviews and share their delight over the discovery of 'hidden gems' in their locality. That could be a service, café, or family business.
Moreover, they added a sense of purpose to the reviewing process by deploying extrinsic motivators, i.e., swag and leaderboards, and intrinsic motivators, i.e., mastery, autonomy, and purpose.
By structuring its website more like a hub for mutual friends to come and share their experiences, Yelp drove up user engagement leading to them posting more often and hang-out online and offline.
By utilizing the right set of motivators to the right set of fanatic reviewers, Yelp has quickly created both an invested reviewer base and large amounts of content for its site.
Old-school chivalry for the win
They say: give attention to the behavior you want to see more of, and that's precisely what Yelp has done. Another winning strategy Yelp used was getting business owners to thank 'Elite' members of the Yelp community that posted glowing reviews.
Let's face it, we all love being thanked, and businesses expressing appreciation was another opportunity for Yelp to forge and foster connections within the community.
Not every review left on Yelp's platform can be positive. Here's how the platform used less-than-satisfactory reviews to benefit businesses and its platform: To help ensure a tone of respect within the community, Yelp encourages reviewers to focus on constructive criticism and always be respectful towards all businesses.
That way, customers feel heard, and the business has a chance to improve its services and work on any area the consumer might have found lacking. That further cemented the feeling of positively impacting the community for Yelp members using the platform to share their experiences.
Leveraging exclusivity for its "Elite" members
By tapping into this feeling of "being there first" and nurturing a sense of community among its most active members, Yelp gave its reviewers a sense of belonging, community, and exclusivity.
In return, its members rewarded this approach by sharing even more recommendations and brand experiences on the platform and motivating others to join in and do the same.
The platform currently has about 85 full-time "Community Managers" and more than 50 part-time “Community Ambassadors” whose sole job is encouraging its "Elite" members (Yelpers) to review businesses in their area. These employees issue newsletters regularly, plan member-only events, promote communication between members and companies, and keep engagement up.
The Yelp Elite Squad is the second tier of the local Yelp community—Yelp users who have been selected as top reviewers in their area and gain entry to exclusive events and other opportunities. Through this tiered membership program, users are prompted to engage more, driving up that sense of exclusivity and community while ensuring a consistent stream of top-quality content for the website.
Yelp offers prizes and incentives to encourage users to leave reviews and interact with other members. For instance, members can achieve "Yelp Elite" status by regularly contributing high-caliber reviews that add value for others and participating in the Yelp community's initiatives and activities.
This "inner circle" exclusivity that comes with achieving the "Yelp Elite" status is an attractive milestone for users and fosters a sense of camaraderie and devotion among Yelp users.
Offering businesses a win-win deal
As for the local businesses being reviewed, Yelp again focused on community-building tools to benefit their platform and the businesses. Most companies on Yelp are small to mid-sized businesses, and Yelp has helped many of them transition to e-commerce by encouraging businesses to list on its platform.
So the benefits of excellent community building have also extended to these local businesses and their customers. Listing their business on Yelp has opened networking opportunities for many smaller mom-and-pop operations.
To add to this feeling of value-added partnership, Yelp made them more "searchable" online and more trustable for new consumers looking for a particular service.
What can we learn from Yelp?
The strategy adopted by Yelp might be almost twenty years old, but their community-first approach toward marketing and user engagement has stood the test of time.
Today, Yelp continues its upward growth by becoming a staple for consumers looking for reviews and honest recommendations in the US and internationally. Yelp now has a mobile application and boasts many new features that further facilitate various e-commerce solutions.
Yelp isn't just a pioneer in customer reviews but also a great example of how focusing on community-building is essential for businesses, especially in today's online era of e-commerce.
By cementing its role as a one-stop shop for all product reviews, online ordering, and business partnerships, Yelp has made and maintained its number-one spot on the fast-evolving digital scene. Their success has grown by adding multiple new revenue streams, such as Yelp waitlists and online ordering options.
Any business, new or existing, can take a page from Yelp's book of networking by getting creative in the way they view community building, not just offering products and services.
Fostering a sense of community among its users by nurturing and rewarding engagement is mission-critical for any business striving for long-term success today. When users feel a sense of belonging, they recruit new members for businesses and double up as part of your marketing team via word-of-mouth.
Yelp is one of the first companies to build a brand on community, but they certainly weren’t the last. In today’s hyper-connected world, communities are more important than ever before as people search for a sense of belonging. The great news is, you can apply Yelp's strategy to your business to enjoy similar long-term success, at a fraction of the effort.