Yelp has quickly become the defacto source of online reviews for restaurants and businesses, and recently released a new feature to help small business owners quantify the value of their online reviews.
The new Revenue Estimator for merchants is available to both advertising and non-advertising business owners. The feature works by estimating a cash value to every “lead” or user action related to the website. If a user clicks to see a menu, makes a reservation or views the company’s website, Yelp tracks this activity.
Yelp then plots those leads over time and multiplies that by a certain dollar amount per business, to get a monthly revenue. The figure is provided by Boston Consulting Group.
“Small businesses are always trying to figure out how to close the loop with ad dollars and what customer revenue they’re actually getting,” says Matt Halprin, vice president of revenue and analytics at Yelp.
Yelp hopes to use this new feature as a selling point to attract new business. A recent study showed that businesses with a free Yelp account saw on average an increase in $8,000 in additional annual revenue. They also found that businesses that advertise on Yelp saw $23,000 more in revenue.