Are you ever just walking down the street when you cross paths with a small café and the sweet aroma of freshly made bread travels up your nose, intoxicating your system with its scent? Your stomach rumbles in response, you check the time and think, well, it’s lunchtime. So what do you do now? You take a look at your surroundings and the streets are flooded with restaurants and cafes. Your opportunities are endless. Well, do you follow the scent of the wood-burning oven to the quaint pizzeria down the street? Or perhaps you walk into the all-black building, with steel tables, large crowd and pink neon sign that reads, “You Gotta Eat Here”? There’s too many options it’s just too hard to choose! Maybe you should just settle for the McDonalds down the street and call it a day.
But wait: Now imagine, hanging in front of those restaurants and cafes are streaming videos of customer reviews, and on top, giant stars representing their ratings! How would you choose now?
< InQuery Intro Music >
My name is Julia Abballe and on today’s episode, “You Are Who You Eat,” I will be discussing the customer review site Yelp.com and how it has changed the food industry. Now this goliath of a site is not just affecting the business owners of the food industry, but it is also changing the world of consumer choice, and it has a lot to say about the types of people who leave reviews.
Since 2004, Yelp has grown to contain over 10 million business reviews. Now ten million may not seem like a lot, or it could seem like an immense amount, depending on how you look at it. For instance, did you know that a seller receives, on average, a 13% drop in sales after its first bad review? Now let me tell you what 10 million reviews do for the small, independent rbuisness owner.
In his paper, “Reviews, Reputation and Revenue,” Michael Luca shares his findings about how customer reviews affect business revenue. He finds that a one-star increase in Yelp ratings leads to a 5-9% increase in revenue, now this effect is limited to independent restaurants, and there seems to be a decline in market shares for chain restaurants since the emergence of Yelp.com.
If you’re wondering why chain restaurants aren’t affected by this site .Now why is it that chain restaurants are unaffected by this site, it’s simple really. When we go out to eat at these independent restaurants, we have little to no information about them previous to our dining experience. But with chain restaurants, they load us with advertisements so we know what to expect before we get there.
Michael Blanding, another participant in this conversation, and he quotes Luca as saying, “Yelp is somewhat a substitution for traditional forms of reputation... People aren’t using Yelp to find out about McDonalds.” Because as we know, a McDonalds is a McDonalds is a McDonalds.
As for the independent restaurant owner, the Yelp rating system is not to be, for lack of a better word, underrated. In fact, bad reviews can be fatal to a business. Seeing as businesses have no choice but to be listed on the site, they also have no control in what is written about them, or how the results and reviews are ordered or filtered - unless of course they are writing them, but we’ll talk more about that in a minute.
As a result of this, many businesses began to feel extorted by Yelp, to exchange advertisements for positive reviews. Sites such as Yelp-sucks.com and a “We Hate Yelp” Facebook page have also surfaced as a response. It’s official: Yelp is a bully! Some even go as far as to call it the mafia: https://youtu.be/bqwg2Hzn5sw - You pay for advertisement or I’ll kill your business; I’ll make you an offer you can’t refuse.
In her article, “Is Yelp a Bully or Just Misunderstood?” Sandra Allen addresses this Mafioso advertisement deal. Interestingly enough, she finds that Yelp.com has a very slow response rate to even, legitimate complaints, and of course, the easiest department to get a hold of is the advertising department. Now their job is to make sales, so naturally when a small business owner calls to complain, they are going to try their best to make you believe that the answer to all your problems, is to buy an add. And so the two become correlated.
Now naturally, when people feel like they’ve been wronged, they take it to court. But according to section 230 of the Communications Decency Act, subsection (C.1) it states that: “No provider or user of interactive computer service shall be treated as the publisher or speaker of any information provided by another content provider.” In laymen’s terms, Yelp is immune from being held libel for the content of its site – BUT, the individuals are not.
So now these business owners are faced with another set of questions: What do they do when slanderous or false reviews are being posted on a site that claims to have no responsibility in the matter? And does this imply that Yelp is not the true monster here, but perhaps the reviewers are?
I interviewed my boss, Rosa, who is the owner of a bakeshop in Vaughan, and asked her if Yelp.com or any other business/food related website has contacted her about advertising with them? She responds, “They have many times.” I then asked if she felt that the advertisement would be related to the types of reviews they present on her profile. She answered with, “their ad rates are very expensive, and they cannot guarantee more traffic.”
In Rosa’s eyes, Yelp does not have much control over the content on its site, so perhaps its power stems from making you believe that it does. Allen also goes on to explain that we all have a “distrust of technology.” In the case of Yelp.com, this distrust stems mostly, from its super-secretive filtering system – as no one seems to know exactly how it works.
*This is a video Yelp has released on the matter, it is very vague and appears quite rushed: *https://youtu.be/oSId9tZ_PzE https://youtu.be/oSId9tZ_PzE*. The Washington Post also did a segment on Yelp’s review filter: *https://youtu.be/s1lJuu44cJA https://youtu.be/s1lJuu44cJA.
Advertisement on Yelp may seem like the sites strongest hand, but the real trouble to business owners stems from the Bayesian Hypothesis, which states: If each review presents a “noisy” signal of quality, then ratings that contain more reviews contain more information. So if each review has a noisy signal, as Luca puts it, having multiple reviews will cause the overall rating to contain more information, therefore making a larger impact.
He also writes that these noisy reviews can be difficult to interpret because they are based on subjective information, and reflect the views of a non-representative sample of consumers. This idea of a non-representative samples is a huge part of why Yelp is considered to be so bias. Now this isn’t a site that claims to be run by a controlled study, so there is bound to be bias. The problem then stems from where this bias is coming from. And Luca calls this: gaming.
Restaurant owners accuse other owners of gaming the system, which means: stacking reviews through friends or family – in-turn, the opposite can be done on their competitor’s pages. Allen writes about this affect as well, she says that if a business owner or her friend, or someone she pays, can pose as a happy customer or sabotage her competition, then a review is no more useful than an ad.
Gaming can lead to the difference between a 3 and a 3.5 star rating. Now this overall average also poses problems for businesses. Seeing as the average rating is rounded up to the nearest half star, Luca points out that a 3.24 rating would be rounded down to 3 stars, whereas a 3.25 star rating would be rounded up to 3.5. From this, restaurants that have very similar ratings in actuality, are displayed in different categories to consumers – and these consumers have the ability to filter the restaurants to only display 3.5 star and up This .01 of a difference in rating could be the determining factor between a business thriving, and a business closing its doors for good.
Now don’t start thinking that these restaurant owners have just been sitting back and letting this happen. Social Media has given them the platform to fire right back, and boy have they taken advantage of this.
#wedontnegotiatewithyelpers, try plugging that one in on Twitter or
Instagram. The hashtag originated on the Instagram page of a restaurant owner in Kansas City who had a, very interesting run-in with a couple of “Yelpers,” to say the least. The article can be found on Eater.com, titled, “Restaurateur Pens Epic Takedown of Entitled Yelper,” and epic it was.
Now his restaurant didn’t provide takeout so the two customers in a business meeting across the street tried to bully them into bending their policies. They tried to use the fact that one of them was a lawyer, that they were well travelled and that they were “starving,” to get the restaurant to oblige their request. They even used the “ultimate threat”, a negative Yelp review. In another one of his articles on a related subject, Shah writes, “Yelp is a platform for people to try to negatively impact businesses when they don’t get what they want.”
Holding their grounds, the restaurant doesn’t change the policy and so the Yelp review was left, and the restaurant shunned... Or so these Yelpers had hoped. The owner took to the site and responded to their review. Explaining very professionally and calmly why their policy was the way it was. He also addressed the ridiculousness behind the male’s suggestion that his being a lawyer had anything to do with the matter. And so, the owner creates this hilarious role-reversal situation where he is a lawyer who practices Tax Law, but is being pressured into servicing a divorce.
Shah also quotes the owner as saying, “I would encourage more people to be responsible with [Yelp]. Uber allows for service providers to rate customers, we should move to that system.” It’s safe to say, he takes Jerry Seinfeld’s “No Soup for You!” to a whole other level, and gets his point across. https://youtu.be/ihd4G9XxJOc
When I asked Rosa if she’s ever felt the pressure to post good reviews, either herself or through a family member or friend, she answered, “no, not at all.” But when I was conducting my survey, I had one of the participants come up to me after and say, “I hate Yelp. A restaurant I worked for in Vancouver used to give us a free lunch for every good review we left.” It seems as though there are two sides to this coin and not all business owners respond well to the pressures of Yelp.com.
Just as there are two sides to the coin, there are two sides to the effects Yelp has on independent restaurants. Restaurants that feel the results of Yelp are usually those who don’t receive many reviews. One or two bad reviews can have a lot of influence in this case. Just as one to two positive ones can have a good influence. Luca says that, “it is the onus on the review industry to change or control gaming and non-representative views.” Whereas advocates of Yelp would argue that in the end, these restaurants are getting attention that they may not have gotten otherwise. What’s that they say? There’s no such thing as bad publicity.
Shah sets up a good point when he writes that, “people are quicker to complain than to compliment.” And Luca writes, “It comes down to what types of truths we want to find in each site and what we can do to ensure reviews are of high quality.” He also says that, “Restaurants are classic examples in economics where the consumer has to make a decision based on very little information.” So what does this say for the reviewer and the consumer?
If the lack of advertisements from independent restaurants is the driving force behind consumer reviews, does this mean we are just trying to help our fellow humans out? But what happens when our judgment is clouded by our experience? We each have individual interests and preferences, likes and dislikes. How do we take consumer reviews seriously in the sense where the one represents the whole, and how do businesses cater to this issue?
I came across an interesting article in the *The New Yorker *titled, “The Crowds vs. The Critics,” by Hannah Goldfield. She quotes Nate Silver, “Yelp reviews are unsophisticated, cheap and obsessed with trivial details of the restaurant experience.” He also says that distinguishing the very good restaurants from the average ones is a little more complicated than a 5-star rating.
Goldfield runs with the idea that traditional forms of reputation are no longer anticipated. She says, “in this age of Yelp we run the risk of forgetting what real restaurant reviews are worth,” she goes on, (about food critics), “the writing is, in and of itself is wonderful,” and they paint “vibrant, nuanced pictures of restaurants and their food and the people who [are] eating it.”
This is what food reviews used to be. Shah writes, “Yelp has become a website that lets people think they are very important restaurant critics who have opinions that matter.” It’s a little harsh, but it has some feasibility. Today the term foodie can be found painted all over the social media sites by users such as missnewfoodie, and foodiefashionista, or fooddudes. But the defining characteristics of a foodie are not found in today’s Yelpers.
Food critics used to be considered connoisseurs of the trade, and their writing was an art and a skillful discourse. Goldfield writes that Yelp reviewers tend to offer “unimaginative, useless notes,” like, “the location’s great, service is superb, and food is epic...” She then questions why people would seek advice on where to eat from people whose imaginations lack such creativity.
And now I’m asking you the same question, somewhat. Why do we trust the opinions of the average consumer? Goldfield writes, “I don’t always agree with the critics in the *Times *or elsewhere, but I trust them [...] not to predict what I or anyone else will like [...] but to entertain me, to make me think.” She then writes, “I don’t have to wonder if they’re biased, I know that they are.”
Allen writes, “For better or for worse, strangers’ opinions affect our purchasing behavior to an unprecedented degree.” But I wanted to take a closer look at how we make decisions and how bias affects our choices. Leslie Ye wrote an article called, “The Psychology Behind How We Make Choices,” and she gives us a brief insight on this matter. She writes, “At no other point in human history has there been such a variety of choice.” So there is too much noise, there are too many options!
She then goes on to say that it all comes down to semantics, and when conscious choice is involved, people will prefer the option they have what she calls, a “positive, implicit bias for.”
Here’s an example for you: You’re sitting at home; you get a craving for Chinese food. There are two Chinese restaurants in the area, but you haven’t eaten at either before. So you log onto Yelp.com, filter in all your preferences, and the results leave you with the same two. The star ratings are pretty close, and so you take to reading the reviews to make your choice. You notice that many Yelpers of Chinese decent have left positive reviews for one, writing things like, “best and most authentic Chinese food you’ll find in Toronto!” Your implicit bias encourages you to choose that restaurant.
She goes on to give a bunch of different examples of bias, but I’m not here to give you a psychology lesson. There are two that I would like to point out. The first is loss aversion bias. This is when we feel more strongly about avoiding a loss than receiving a gain. So people telling us not to go somewhere, has a larger affect on us than if someone were to suggest good things about it.
The second is called Ingroup bias – AKA the bandwagon effect. This is where a person or group acts in a similar way to another member. Now I’ll ask you what I asked the students in my survey. Have you ever heard of Yelp’s “Elite” members? If you haven’t, don’t feel bad, all 37 of my participants said no. Don’t let this fool you into thinking that they don’t play a huge role in how you make your decisions, even if you weren’t aware of it before.
In order for a consumer to find a review useful, they must find it relevant, accurate and credible. So how does Yelp achieve this credibility? Well, through it’s handpicked Elite members of course.
It seems like Yelp gets its edge from how super-secretive it can be. Not only do many of its own employees not know how the filtering system works, but no one seems to know how these Elite members gain their status. But, like any other good conspiracy, we have our theories.
Here are 5 easy steps to becoming an Elite member, according to Sandra Allen: Step 1: Participate a lot on the site and encourage others to do so. Step 2: Be community oriented. Step 3: Compliment reviews as “cool” “funny” or “useful.” Step 4: Don’t have filtered reviews. Step 5: Leave a lot of reviews – especially positive ones.
This last step works in Yelp’s favor in two ways: Firstly, when and if Yelp is being attacked by a small business owner, which we all know it has, thanks to the Elite members, they can argue that majority of the reviews are 4-5 stars. Secondly, high reviews mean that more businesses will have a 3 star and up rating which means Yelp can contact them for advertisement.
Here is a comical video on how Elite members gain their status: https://youtu.be/nJQ7E92twUI
Yelp’s elite members have extenuating influence on the site, and ultimately on you, the consumer. A positive or negative review left by one of these members has a huge impact on the business. Yelp even provides consumers with an option to only see reviews written by these elit members. Luca writes that they are certified by Yelp because their reviews are deemed helpful, or because they are better at predicting average consumer preferences. It is because of their reputation for leaving informative reviews that they have more impact on us.
Now remember earlier when I spoke about Yelp’s immunity to being libel. And how many people have called Yelp “the mafia.” Well in that case, wouldn’t its Elite members be seen as their own personal henchmen? And wouldn’t this make Yelp, at the very least, an accessory to the crime? Think about it.
< Intro Music Again >
So have you made a decision yet? Are you going to pull out your
phone, open up that little red and white app, and let others decide what you’re having for lunch? Or are you feeling extra spontaneous today? Either way, I hope you enjoy your meal and remember, “You are Who You Eat!” Thank you for listening to InQuery.
Illuminated Blog Posts
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