Yelp has become a go-to site for crowdsourced reviews of local businesses, with 178 million monthly visitors. This makes Yelp the 44th most visited website in the United States. For consumers like us, Yelp provides a wealth of information to help guide our purchasing decisions. For businesses, reviews on Yelp can make or break their success. Let‘s take a closer look at who is using Yelp and how influential it has become.
Contents
A Breakdown of Yelp User Demographics
Yelp has a nearly equal gender breakdown, with 53% female users and 47% male users. The age distribution of Yelp users is spread evenly, with 30% ages 18-34, 36% ages 35-54, and 33% ages 55+.
The income breakdown shows that wealthy users dominate Yelp‘s audience. Over half (55%) of users have an annual household income of $100,000 or more. The remaining users are split between incomes of $0-$59,000 (22%) and $60,000-$99,000 (23%).
To put some hard numbers on it, Yelp has over 200 million cumulative reviews, 78 million active user accounts, and sees over 178 million monthly visitors. For growth context, monthly traffic is up 19% year-over-year. About 92 million monthly visits now come from mobile apps.
Yelp‘s Influence on Consumer Behavior
Reviews on Yelp have a significant influence on whether customers will patronize a business. According to surveys:
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42% of people who consulted Yelp reviews made a same-day purchase of that business‘s products or services.
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Businesses see a 9% increase in revenue for every star gained in their Yelp rating.
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45% of customers visit a business‘s Yelp page before even going to their website.
This demonstrates the remarkable sway Yelp holds over consumer behavior. Positive reviews lead to real revenue gains, while negative reviews deter potential business.
Yelp‘s algorithm highlights recommended reviews from active platform contributors. This helps surface the most useful, credible perspectives. However, Yelp has still struggled with combating biased and fake reviews.
A Brief History of Yelp
Yelp was founded in 2004 by entrepreneurs Jeremy Stoppelman and Russel Simmons. The initial idea came about when Stoppelman was trying to find a doctor while working at PayPal. He spent time searching online but had no way to determine which doctor was best.
This gave him the idea for Yelp – a platform where people could read and write reviews about local businesses to guide others. Yelp began as an email circle where people shared local business reviews.
The name Yelp was chosen because it sounds similar to "help", matching the site‘s mission to help consumers make decisions.
Yelp User Behavior
Visitors spend an average of 3 minutes and 10 seconds browsing Yelp per visit. The click-through rate on Yelp is 7.10, meaning users click on just over 7 links per session.
The most reviewed categories on Yelp are:
- Restaurants – 18%
- Home & Local Services – 18%
- Shopping – 16%
- Beauty & Fitness – 11%
- Health – 9%
Food and drinks are the most discussed topic, accounting for 56% of discussions. Other popular topics are movies/TV (45%), travel (43%), music (42%), and politics (15%).
Let‘s dive deeper into two of the most popular categories – restaurants and home services. These categories make up over a third of all reviews.
The average restaurant has 49 Yelp reviews. Restaurants with over 100 reviews see a 23% increase in click traffic compared to those with fewer reviews. Photo quantity also matters – each additional photo can increase clicks by 2%.
For home and local services, having at least 20 reviews is important. These businesses see a 133% increase in traffic. But 5 star ratings matter most. Services with a 5 star average rating get almost 4 times the clicks as 3 star businesses.
Yelp Features Promote Inclusivity
In 2022, Yelp introduced features to highlight identity attributes of businesses, including "Black-owned", "Latinx-owned", "Asian-owned", and "women-owned." Searches for these businesses skyrocketed:
- Asian-owned businesses – 130% increase
- Women-owned businesses – 264% increase
- Black-owned businesses – 3,085% increase
- Latinx-owned businesses – 4,077% increase
This has helped give exposure and prominence to diverse business owners on the platform.
The Powerful Influence of Star Ratings
Not all star ratings have an equal effect. Here is the distribution of star ratings on Yelp:
- 1 star – 18%
- 2 stars – 6%
- 3 stars – 8%
- 4 stars – 17%
- 5 stars – 51%
Having a 5-star or 4-star rating is pivotal. About 80% of potential customers will abandon a purchase after reading negative reviews (1-2 star). High ratings directly impact foot traffic and loyalty.
For example, one study found restaurants with 3.5 or better ratings saw 32% more visits than those with sub-3 star ratings. Each additional half star added roughly 9% more traffic.
Reviews Make or Break Purchasing Decisions
It takes an average of just 4 positive reviews before most consumers are comfortable making a purchase from a business. However, consumers should be wary of fake reviews and verify credibility first.
An astounding 97% of consumers now search online for local businesses and services that are close by. Local search makes up a huge 46% of all searches, so proximity is very influential.
According to one survey, 82% of respondents said they trusted online reviews as much as personal recommendations. But misleading reviews still run rampant. Experts suggest looking at the distribution of ratings, checking multiple sites, and favoring experienced reviewers.
Yelp vs. The Competition
While Yelp remains dominant, other platforms are growing as alternatives for local search and reviews. Google Maps and its user reviews are widely used. Facebook has added features that allow recommendations and ratings for local businesses. Niche sites like TripAdvisor and Zomato focus on specific categories like travel and restaurants.
Yelp retains some key advantages, like a more social, community feel versus Google‘s barebones approach. But competitors continue to chip away at Yelp‘s leadership position.
Takeaways
In summary, Yelp has become an instrumental platform that guides consumer behavior. Businesses must monitor and manage their presence on Yelp closely, as reviews make or break revenue and reputation. Consumers should leverage Yelp to find the best local options, but also verify review credibility before deciding.
With 178 million monthly users and growing, Yelp‘s crowd-sourced wisdom continues expanding in reach and impact. The site has fundamentally changed how we discover, research, and engage with local businesses.
Sources
Search Engine Journal, Qualtrics, Oberlo, Finances Online, Science Direct, Sproutsocial, Review42
