Depending on the environment, a red sticker “people love us on Yelp” Fire Department outnumbers look cool “Zagat Rated” emblems or fading newspaper Reviews the restaurant door. There is not one of the forces-and, let’s face it, sheer entertainment value-honest review written by a regular visitor instead of elite food industry.
And recently, a report written by the Harvard Business School Assistant Professor Michael Luca shows just how powerful it can Yelp rating: Luca found that one of the stars rise in the value of an independent restaurants leading to 5-9 per cent increase in revenue.
But with a livelihood that hangs in the balance, the symbiotic relationship between technological platform, reviewers, Yelp and local businesses are under pressure, showing weakness in the system to accommodate the high volume of user-generated content.
In a report entitled reviews, reputation, and revenues: the case of Yelp.com, Harvard Luca analyzing data from the Washington State Department of revenue, as well as from Yelp, to show a causal relationship between Yelp ratings and revenue.
Luca found that relationship-this rating applies to income independent restaurants, no chain restaurants. He said that the findings are also relevant to other industries (such as a business hotel) where reviewers credible and willing to leave a Review.