Yelp is huge. Millions of people visit the site regularly. It’s becoming the the standard to which businesses are held. And that puts Yelp in a very powerful position. They are trust currency. You see, it goes like this… 2Z8BQQ8AA8BZ
Word of mouth
They say the best form of advertising is word of mouth. That’s because a word of mouth “advertisement” is really just a social endorsement. Let’s say your friend loves her dentist. When you get a toothache, her enthusiastic endorsement of said dentist goes a long way. It’s relevant to your immediate needs and it came from a trusted source. A double-whammy.
It’s a matter of trust
Trust is what makes social endorsements different from paid endorsements like celebrity sponsorship or TV commercial testimonials? Trust. When your friend recommends you try her friendly, gentle, affordable, local dentist, you’re likely going to trust her. You assume she’s not being paid by the dentist for her recommendation, but is endorsing out of admiration & loyalty. By nature of being your friend, she’s trustworthy.
Lack of trust, is the same reason why you don’t rush out to buy whatever hair care product your cousin is hawking, despite how “AMAZING” and “Seriously. SOOO good!!” she may say it is on Facebook. You identify that her motives are business & profit, and immediately discount her endorsement. It just isn’t trustworthy.
Trust is about relating
Wikipedia says that trust is a “reasonable expectation (confidence) of the trustor that the trustee will behave in a way beneficial to the trustor.” Or, more simply, it’s the belief that “this is good for me.” Obviously, the “this is good” part is very important. But before that, conceptually speaking, comes the “for me” part. We have to be able to relate in a personal way to the trustee―the person or thing to be trusted.
This is why companies pay celebrities for endorsements. We form personal relationships with celebrities in our minds and we relate to them, projecting some of ourselves onto them. Most people have never met Tom Hanks, but they will tell you that he’s an honest, trustworthy man.
If a company put a stranger in front of you and the stranger said, “trust me!” your response would be, “Why? I don’t even know you!” So the company works very, very hard at casting actors who appear trustworthy and relatable.
Enter: Joe Everyman.
There’s something relatable about the little guy. We all see a glimpse of ourselves in the anonymous, hard-working, man or woman. Have you ever noticed how car commercials frequently feature average-looking, non-descript men and women? They’re nameless and sometimes even faceless. The viewer projects some of themselves onto those anonymous characters. It’s human nature. We can only see the world through our own eyes, after all.
Yelp is full of Joe & Jane Everypersons. So when Yelp tells you that 5 people you’ve never heard of have reviewed your local pizza place, something similar happens. You don’t know George P., Michael K., Thom H., Colin M., and John L. But that’s the point. They’re not special. They’re not celebrities. And they’re not your annoying cousin. They’re basically anonymous. And relatable.
Yelp users, if my theory is correct, project their own personalities onto previous reviewers. We trust their reviews, even though we’ve never met them. Somehow, what they say is worth listening to.
Trust is valuable
You can’t sell without trust. So if you’re trustworthy, you’re sales-worthy. And that is extremely valuable. It’s the reason Google is the web’s dominant search engine: when the search race was on, they provided the best results. They earned users’ trust. Google, Apple, Facebook…any of the biggest tech companies (and probably non-tech, too) have proven themselves as trustworthy.
Every company wants to be trusted. And Yelp is playing a bigger and bigger role in how people feel about local businesses and their products or services. A Yelp review can be a powerful thing. Yelp is becoming the unit of measurement―the standard to which businesses are held. And that puts Yelp in a very powerful position. They are trust currency.
But can trust be monetized?
It doesn’t seem likely. The difference between Google/Apple/Facebook and Yelp is that the former have concrete business models with revenue streams baked right in. Yelp doesn’t.
Yelp’s products are information and trust. The web has clearly demonstrated that it will not pay for information. The New York Times and BusinessWeek both wrote about Yelp’s business model, or apparent lack thereof.
Trust won’t pay the bills
Yelp has established itself as the authority on local business reviews and millions of people trust them. But trust doesn’t pay the bills.
I do have an idea on how Yelp could monetize its site. But if I described it in detail here, I wouldn’t make any money :) But it’s a pretty good idea. Trust me.