Dealing with Online Reviews

Good ratings significantly affect a restaurant's revenues, writes Dennis Zink in the Herald-Tribune, a Sarasota, Florida, newspaper, citing Harvard Business School researcher Michael Luca. A quick scan of a Luca research paper about Yelp reveals that, according to him, Yelp's ratings have little effect on chains, but significant effect on independent restaurants.

I present three findings about the impact of consumer reviews on the restaurant industry: (1) a one-star increase in Yelp rating leads to a 5-9  percent increase in revenue, (2) this effect is driven by independent restaurants; ratings do not affect restaurants with chain affiliation, and (3) chain restaurants have declined in market share as Yelp penetration has increased. —Michael Luca, Harvard Business School

For those whose ratings significantly affects their business, Zink advocates being proactive:

1. Control (own) where the reviews happen. You can get reviewed on dozens of sites, such as Google, Facebook, Yahoo, Twitter, Linkedin, Instagram, Bing, Zillow, Yelp, Trip Advisor, etc. Here are the ways to own it:

• Claim each listing (ie: Google My Business)

• Provide complete business information

• Turn on alerts

• Develop an approach to build your user Social Proof

• Actively manage your Social Proof

• Flaunt your Social Proof —Dennis Zink, Herald-Tribune