Digital Natives as Customers and Critics
Comments: 4 - Date: November 20th, 2008 - Categories: Innovation
Aside from being innovators themselves, Digital Natives are also forcing businesses to innovate. The entertainment industries, confronted with the breakdown of traditional distribution models for music and movies, are one particular striking example. But this is also true on a more microlevel – even for local businesses. Let’s take Yelp as an example.
A website for user-generated reviews of local businesses, Yelp started in the San Francisco area and has since spread to every major US city and dozens of smaller ones. The social networking aspects of Yelp, which allowed users to interact and essentially review the reviews, catapulted it into popularity. It currently boasts 16 million unique visitors per month and personally, Yelp has become my de facto guide to the city. When I headed to Chicago on my own for two months this summer, I didn’t buy a single guide book, confident that I could find my way around with Yelp and Google Maps.
When Yelp becomes such a popular authority on local businesses, they start paying attention. For local businesses that especially rely on word of mouth, the site is probably the best place to take the pulse of customers. For Digital Natives, Yelp provides a forum for feedback and participation. Businesses themselves would be wise to join in on this conversation.
Of course, the picture isn’t always rosy and perhaps the toughest part of Yelp is the critical reviews. So how do businesses deal with negative reviews? Certainly not by further alienating your critics with signs saying, “No Yelpers.”
The San Francisco Business Times reported on a Restaurant Bootcamp in San Francisco that focused exclusively on the question, “What is your Yelp strategy?” Various restaurateurs mentioned inviting top Yelpers to pre-opening parties, personally contacting disgruntled reviewers, and taking into consideration specific feedback from Yelp reviews. The fact of the matter is, Yelp is very much on the radar for small businesses. A presence on Yelp, along with accurate information and photos, is crucial for a business craving out an online reputation.
Innovation here isn’t just about local businesses taking advantage of digital word of mouth, but also Yelp’s savvy in building its own credibility. Many of my favorite haunts around town boast a “People Love Us on Yelp” sticker, so whenever I watch into new stores with the same sticker, I know I can rely on a trusted brand. Yelp has also been leveraging its power to make and break online reputations into partnerships with local businesses. With these strategies, it has also come under a fair amount of scrutiny lately for supposedly manipulating the placement of positive/negative reviews based paid partnerships.
Yelp is of course just one site in the larger constellation of services of which businesses can take advantage. Businesses need to adjust to an environment where the customer feedback loop is constant and accessible to everyone. The Internet has opened up all these tools for communication, but the tool needs to fit the task at hand. Simply creating a Facebook Page, a Twitter account and a profile on every social networking site is a scattershot approach. Yelp, for example, is fantastic for local businesses looking to distinguish themselves from the competition, but less useful for chain stores where the goal is, essentially, an identical experience in every chain. Innovations isn’t just jumping on the social networking bandwagon, but figuring out which tools are best.
-Sarah Zhang
Comment by Ken Leebow - November 20, 2008 @ 12:21 pm
You do not have to be a digital native to use and enjoy Yelp or other social media sites. I enjoy reviewing restaurants on Yelp and reading reviews of restaurants that I am thinking of dining at. And, I ain’t no digital native.
Comment by kurquoise - November 20, 2008 @ 1:35 pm
Oh definitely! I didn’t mean at all to imply that Yelp is exclusive to digital natives, and the site’s success is its ability to reach such a wide range of users. At the same time, a large part of the community is under 30 and the founders themselves can be called digital natives. Having these open forums for feedback is something that digital natives have grown up around, which is what is unique.
Comment by Kerry - November 21, 2008 @ 5:58 pm
I think Yelp is an important tool, but I also feel like it can be “gamed” fairly easily. Anyone can register for the site, so it’s relatively simple for a business to “plant” positive reviews if it chooses that route. And I don’t think that catering specifically to a small group of Yelp fanatics makes a business good for everyone–just good for those Yelpers. On the other hand, Yelp is also a great way for (smart) business owners to identify and deal with complaints that do come up, and I have seen many reviews amended based on a business owner’s followup with the disgruntled customer. Maybe that’ll teach us to voice complaints in person rather than run home to Yelp about a bad experience!
Comment by dax - November 22, 2008 @ 12:21 am
While a good start, the problem of Yelp is just like all the crowd-raters, they are impersonal and subject to anonymous flaming…and they are NOT local, so good luck if your a business owner in chicago, trying to get a fair shake, from a faulty review…..Yelp is lightyears away from any local customers (ie paid staffers doing the reviewings)
All centralized service providers all have the same structural problem.