Yelp’s Push To Build Relevant, Rewarding Commerce

Since it was founded nearly 13 years ago, the Yelp review site has ascended to the rare place among firms where its name has become a synonym of what it does. For millions of customers each day – when it comes time to find a place to eat, a local contractor or a nail salon – their first move in the selection process is “Yelping it.”

This gives Yelp something of a unique status in the digital commerce landscape. On one hand, the fear of the appallingly bad Yelp review – the disgruntled ex-customer who writes a novel-length exposition of everything they don’t like about your business before giving it a single star – is such an oft-repeated joke that it’s become something of a cultural cliché.

But more than allowing customers the chance to unleash their inner New York Times food critic, Yelp has over the course of its corporate evolution developed into a firm that has a unique ability to bring customers in.

“One of Yelp’s big opportunities is to help merchants understand that we are driving them customers,” David McKie, Yelp’s director of business development, told Karen Webster in a recent conversation. “We offer consumers a great way to use Yelp that can make it easier to interact with the merchants they want to support. We have been enabling transactions directly for six years.”

Today, he notes, customers can transact with more than 100,000 merchants directly – though some of those are bookings, while others are direct and complete financial transactions. The customers who visit are unique in that they are uniquely pre-wired to buy; someone researching on Yelp has moved past the hypothetical part of considering a purchase, and is down to researching final pre-conversion details. The proof is in the figures: According to Yelp’s internal metrics, 80 percent of customers who visit take an action within a week, and 42 percent take an action within one day.

“And there is really a wide variety of merchants that are on offer,” said McKie. “Some are the things most people are familiar with, like food apps for pickup and delivery – but you can also buy tickets to the Giants game, or book and pay for things like massages.”

But the question, and the usual challenge, is doing more – particularly to help merchants succeed in the wild and to give customers reasons to engage with local businesses.

And that, he noted, is what led Yelp to launch Cash Back a little under a year ago.

The Magic Of Cash Back

When Yelp first examined the issue of how to keep the service sticky, reward and loyalty seemed the obvious move. The card-linked offers model seems to be the best way to deliver those key elements to the merchant and consumer parts of their platform.

“We are a top 20 web property that, at the same time, has a very close relationship to small and local business across the country,” noted McKie. “And so, it seemed a card-linked offer was an obvious place to dig in and give it a try. And we are working in a non-issuer specific fashion because we didn’t want to bring offers that were good for some of our customers and wouldn’t work for others.”

Instead, McKie noted, customers can add debit or credit cards into their Yelp accounts, and then link their preferred cards to their chosen rewards-offering restaurant.

“The merchant has the flexibility to set how much they want to offer as an amount of cash back,” McKie told Webster. “Those offers generally range from five to 10 percent. Once the card is on file and linked, when a customer uses the card to pay online or at the location, the merchant recognizes the card as registered in the cash back program, and the back end handles the funds accordingly.”

The customer gets a push notification reminding them of their savings and the cash back funds are swept onto the consumer’s cash back ledger, which is then swept onto their debit or credit card monthly.

“After having been in market for less than a year, we are seeing a lot of engagement from the consumer perspective, and also getting a lot of good feedback from merchants,” noted McKie.

It is still in the early days and optimizations remain to be done, McKie pointed out, but the education in the experience has been valuable. Some lessons, such as the fact that consumers love getting cash back, were unsurprising. However, the amount of cash back given out over the last year – over $1 million – was a bit eye-opening.

More surprising, he noted, was how quickly the service moved out of the restaurant vertical, where they had expected it to do well, and into the other areas Yelp services.

“Gyms, local oil change places. Lots of merchants seeing there is a way to generate loyalty and attract customers at the same time,” said McKie. “We didn’t know that would happen prior to market, and it is something we have been happy to see.”

Building A Better Customer Journey

Customers are always looking for ways to make the commerce journey smoother and simpler. Yelp’s strategy contributes to that by making it easier for customers to do more things from one location – learning, booking, paying, servicing space –that all play to the same goal.

“If you look at the Nowait acquisition, it solves a pretty common problem for people,” said McKie. “It’s Sunday morning and you’re lying in bed trying to figure out brunch and how to avoid waiting in line with everyone else who can’t cook eggs. You put their name on a waiting list at a restaurant that does not take restaurant reservations, and don’t know if anyone is really looking at that list, or if they are getting lost in the shuffle.”

Nowait offers not just an ability to put your name on a list, but also to keep tabs on the list in real time, so you can see how fast the line is moving and how much hustle you need to add to your step to get to your meal on time.

“And we get to help restaurants get rid of that stupid plastic disk with the lights on it, which gets broken and lost and just plain greasy,” said McKie. “The Nowait solution totally removes those things from the picture, which is nice for [both] the restaurateur and the customer.”

And, he noted, Nowait plays particularly nice as “the flipside to the coin” of Yelp Reservations, which allows the customer to actually book a seat.

The point, he said, is making it easier to make those connections that the Yelp customer has come to the platform fairly pre-wired to make. By providing connection points like Nowait and Reservations – along with reward options like Cash Back – Yelp can make those connections that much more likely going forward.