Paying for Yelp and Angie’s List

Confusion abounds when it comes to advertising with Yelp and Angie’s List. They both have aggressive sales forces that call and pester service companies to pay money in order to get more visibility on their websites.

They have few fans within our industry since this whole idea of letting consumers publicly judge their service companies has not been a welcomed change. In addition, these two consumer review sites already provide free exposure for companies, so does paying them money really help bring in additional work?

How can you tell whether your company should risk its advertising budget on Yelp and Angie’s List?

For our discussion, we will ignore whether or not we actually like these two companies and what they rep resent. Instead we will look to see if they can actually benefit your company’s growth. (For a more complete perspective, review past articles I have written on this topic.)

Primary factors

Four questions can help determine the effectiveness of consumer review websites for any specific company. Understanding these will help you determine whether or not you should invest money in this form of advertising and how you might improve the results you get for both paid and free listings.

1. How popular are Yelp and Angie’s List in your area?

Popularity is indicated by the number of local companies that have reviews under your service listing and how many reviews in total have been written for the service in general.

Zero reviews: Shows that this form of social media has not yet caught on in your area.

10 to 30 total reviews: Indicates that consumers are starting to use the system. This could be a good time to position your company at the top so as to ride the wave as it grows.

50 to 150 reviews: Consumers in the area are using these sites to find service companies. With some focused effort, it should be possible for your company to work its way to the top.

Over 250 reviews: Shows the review site is mature, and thus, it will be challenging for a new company to become competitive.

To determine the competition for Yelp in your area, go to Yelp.com and type in your service and city into the appropriate search boxes. To see the competition for Angie’s List, you must actually join as a consumer member ($0-27, varies by area).

2. Where does your company rank, and what is its rating?

These are consumer review sites, so it only makes sense that people who come here are looking for companies having a better rank (spot in the list) and rating score (number of stars). For this type of review system, a monster share of consumer attention goes to the top one or two companies and the rest get what trickles down from there.

The primary benefit of Yelp and Angie’s List advertising is to be placed ahead of the naturally top-ranked companies. Even with that edge, you must still be somewhat competitive in rank and rating with the top companies. In other words, paid placement at the top for a company with only two reviews and a four-star rating will be ignored if the top naturally ranked company has 57 reviews and a five start rating.

3. How much do you charge?

Consumers who use review sites generally care about quality and are looking for good value, not necessarily the lowest price. Bait and switch companies are quickly revealed through this system via a number of negative reviews. On the other hand, high-priced companies can also have a hard time justifying their prices.

Yelp tends to favor low- and mid-range pricing. Consumers often feel comfortable going to a lower priced company if the reviews for that company are favorable. Angie’s List members seem to be less price sensitive.

4. How does your company look?

A consumer benefit of Yelp and Angie’s List is the ease by which consumers can compare multiple companies.

The format of each page is the same for each service company. Under the influence of appearance, customers will narrow their search to one candidate in a matter of seconds. The volume and quality of information, along with the photos provided in the company profile, make a big difference on the number of consumer calls.

It is also easy for consumers to click on the link to the service company’s website. The more appealing the website, the better the results.

Ultimately, this is a highly competitive form of advertising. It is a “winner takes all” format, and if you are not able to compete with the top players it is probably not going to pay off as a profitable form of paid advertising.

Testing the advertising options

If your evaluation of the four factors is positive, it is worth testing. Since this is digital advertising, the smallest test size and the shortest contract is best for running the test. (If all else is the same, spending more money or running the ad longer will not significantly change the test results.)

If you get profitable results, you can increase your investment at any time. If it does not pay off, you want to quit as soon as possible.

Prior to running your test, establish how many jobs are coming in due to your free listing. Any jobs coming in naturally are a gift. Be sure to subtract that number of free “gift” jobs from the results of your test. Companies that naturally rank high may not benefit from paying money to advertise this way.

Worth checking out

Yelp and Angie’s List can have a huge effect for some companies. It would be foolish to not seriously look at the pros and cons associated with paying for their advertising. No matter what your personal opinion is of the merits of consumer review sites, all companies should exploit all of the free options available from each and pay close attention to how their companies are portrayed on them.

Steve Marsh is a 40-year veteran of the carpet cleaning industry, an instructor and a Senior Carpet Inspector. He helps home-service companies quickly establish profitable clienteles and then progress on to serve higher quality customers. To help companies achieve these goals he created the step-by-step programs Single Truck Success and Be Competition Free. For more information, visit www.professional-carpet-cleaning-service.com.