Yelp Offers Local Businesses New “Revenue Estimate” Tool

yelp-logoToday must be the day of ROI calculators. Google just introduced one for mobile, and Yelp, last night, debuted its “revenue estimator” for small businesses. The tool is free to all businesses that have claimed their Yelp profiles.

The Yelp revenue estimator is the same for advertisers and non-advertisers. In the future, Yelp might add some additional features for advertisers, but that remains to be determined. Right now, the company just wants to see how businesses react to and use it.

The tool is relatively simple, it multiplies customer leads in a given month by an average revenue-per-customer figure. There are default values for the latter drawn from a Boston Consulting Group study, which surveyed small businesses on the average value of customer spend in many dozens of verticals. Business owners can also input their own average customer spend data in the tool.

Yelp Revenue Estimator

I spoke with Yelp and asked how the company was defining a “lead.” Yelp told me that a broad array of actions are bundled into that definition: click to the business website, menu lookups, maps/directions lookups, calls, check-ins, photo uploads, deals sold, open table reservations.

In the case of calls-as-leads, Yelp only counts calls from its mobile app. It doesn’t capture or count calls generated from Yelp’s PC website because it’s not using tracking numbers.

Yelp said that it originally considered weighting the various actions and lead types differently, but decided that would create too much complexity for small business owners. The company also told me that in fewer than 5 percent of cases, users do take or conduct multiple actions (e.g., call and get directions) so there isn’t double-counting of leads.

Those businesses that start using the tool and then go on to become advertisers will be able to see the “before and after” view of whether advertising on Yelp is delivering more leads.

People are likely to take one of two views of this. One is that Yelp is providing a valuable tool to business owners free of charge. A more “cynical” view is that this is a self-serving initiative to combat criticism or questions about Yelp’s value. Regardless of Yelp’s motivation, there is value for business owners.

The only criticism I would raise is that all of the actions Yelp is measuring or reporting aren’t the same. For example, an Open Table reservation or deal sold isn’t the same as a menu lookup or click through to a website.

Related Topics: Channel: Local | Yelp

Sponsored


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



Marketing Day:

Get the top marketing stories daily!  

Share

Other ways to share:
 

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. You can read more about our comments policy here.
  • Alan Koenigsberg

    Excellent points. The first and only article I could find that weighs the pros and cons of the new tool from Yelp. Does seem very self-serving on Yelp’s part. Another case of using market research to get the results you want! Isn’t market research supposed to be objective? Too bad businesses like Yelp use phrases like “according to BCG…”. They hired BCG!

Get Our News, Everywhere!

Daily Email:

Follow Marketing Land on Twitter @marketingland Like Marketing Land on Facebook Follow Marketing Land on Google+ Subscribe to Our Feed! Join our LinkedIn Group Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Marketing News!

Marketing Day is a once-per-day newsletter update - sign up below and get the news delivered to you!