The popular Yelp.com review site is accused of extortion, and apparently this is not the first time.

What Yelp.com is accused of?

The crux of it an Animal Hospital in Long Beach had a bad review and noticed it was 18 months old (and possibly not even based in fact). Yelp.com has a policy of allowing reviews to be posted for visits that occured during the last 12 months – and the facts of that review revealed the visit was 18 months before posting. The “Cats & Dogs Animal Hospital” contacted Yelp.com to have it removed (which they did).

Guess what happened next? A new negative review appeared 5 days later and then Yelp.com salesman started calling the animal hospital using high pressure tactics to sell an “advertising package” ($300/mo) to remove the negative review. You might say coincidence – right?

Well if you are – then think about this…the animal hospital refused to buy the $300 per month advertising package, and 5 days later ANOTHER negative review popped up. The lawsuit paperwork reveals that Yelp called the animal hospital frequently using “high pressure tactics” promising to move or delete negative reviews in exchange for a 1 year advertising contract – and even allegedly said they wouldn’t appear in google or search results.

This could still be coincidence right? Well, when the hospital refused to buy the ad contract – the original bad review from the 18 month old visit was republished. Followed by another bad review from the second reviewer. Still coincidence? I still say – highly doubtful in my personal opinion.

What allegedly happened here might no doubt be the work of an unscrupulous rogue employee within a large company of well meaning workers. On the other hand – it might be a regular business practice. When I read that article on Wired, what immediately came to mind for me was conversations I’ve had with clients of mine who own main street businesses, and their dealings with salesman in the new directories.

Something Phonebooks Could Never Do

If you don’t own a business you may not know this, but the phonebook, yellow pages, and local newspaper charge a LOT of money for advertisement. I can remember back in the 90’s working for an Internet Service Providor and the Yellow Pages ad salesman coming round once per year. To purchase a 3 or 4 inch square ad in the yellow pages could cost $5,000 per year (or more). The same ad in the local paper could run $500 per week (or may, depending on how many days it runs). The local phone book and newspaper have held for decades a stranglehold on main street businesses because that’s where the majority of people turned to find local merchants and services. If you were a dentist, doctor, accountant, lawyer, pizza palace, or muffler shop – it was vital that you have exposure in the yellow pages and local paper.

Phonebooks are dead now. Where I live we used to get 4-6 phonebooks per year. Now, I’m lucky to get one, and the last time it arrived it was 1/2 the size it used to be, about double the size of a paperback in width and height, but not as thick. Why? Because people don’t use them anymore. They use their cell phones, itouches, iphones, blackberrys, ipad, laptop, netbook, and some even lcd screens from their car. “Local search” is blowing up worldwide, and “getting found” online to a business is more important now than it ever was. I’m not just talking about the bartender at your favorite watering hole getting the business a MySpace or Facebook page either.

If you own a business you have to be aware of the advantages and disadvantages of the “public Internet”. It’s very easy to setup your own web site in this day and age – even on a minimal budget. In my experience half of more of American small business owners don’t have a web site – because they don’t feel they need it. The local brake shop, the donut hole, the greasy spoon, and in some cases the lawyer or auto insurance guy may not yet have a local web site. Even if you do – if you don’t hire an expert to “get it ranked”, it won’t matter anyway (because no one will ever see it).

In my experience the small business owners that do “get” what the online world can do for them are people that thrive on “leads”. The local window and siding guy, the mortgage consultant, and even people like plumbers, painters, and general construction contractors. These are the people that live and work in a semi-populated area, and they’re very concerned about what comes up when you type something in like “painting contractor tampa” in google.

Try typing in “painting contrator yourcity” and see what you get. You might be surprised that all the results aren’t actual painters. Some are sites with nothing more than a list of painters, or a “directory”. Rather than look at individual painter sites all – a list of painters makes it easy to find one close to your neighborhood. But wait! Some of these directory listing sites have “reviews”. Now there you go – there’s something phonebooks could never do, offer interactivity and “real reviews, from real people”!

The “Squeeze”

It’s only natural that some of the first online directories would be from actual phone companies, like Yellow pages (AT&T), and Superpages (was Verizon). These sites offer “enhanced listings” just like real phonebooks, but they also offer reviews that nearly anyone can submit. When you do a search for something like “painter atlanta” usually half or less of the results are painters, and the rest of dirctory sites like superpages, and yellow pages – but many are now more like “review sites”, such as Angie’s List, Service Magic, or even Kudzu. Yelp is starting to get ranked more and more for searches like this as well.

In the beginning many local directory sites like this were just listing sites that made money form advertisements alone, but the tide has surely changed with the ripe smell of money in the air. I’ve talked to painters, plumbers, and general contractors who were clients of mine and they described the phone conversations with salesman at a directory like ServiceMagic.com. The directory says right at the top of the page “pros screened and approved by Service Magic” leading you to believe there’s some kind of rigorous entry process. I was told for the most part if you pay the fee (upwards of $5,000/yr? for most categories) – you’re in!

Let’s say you’re a local plumber and need first page google ranking for “yourcity plumber” to survive and get business. Can you imagine having to pay the listing fees for Yelp, Service Magic, Kudzu, Angie’s List, Yellowpages, Google Local search, Yahoo local search, and Superpages? I know businesses that can and do pay all those fees. “The Squeeze” occurs when you run in to a situation like what allegedly happened at Yelp where you feel forced to pay the fees to combat negative listings. There are two things going on here I don’t like. One is the blatant manipulations of the reviews in the first place (tainting the supposed “real reviews” usefullness of the site), and the second is the fact that asking for money to remove the negative reviews really boils down to extortion.

What You Can Do as A Business Owner

The nice thing about the Internet is that (despite what I just pointed out) – it’s a level playing field (provided you have someone that can help you). What you can do is take the elements of the Internet that could work against you (interactivity) and use them to your advantage.

Specifically…

  • Start a Reputation Management Campaign: If you have negative reviews online, hire an online marketing specialist to run interference for you. A “reputation management” campaign can lessen the impact of negative reviews by enhancing your brand and online image with positive information
  • Start an Online Authority Campaign: Instead of paying outrageous monthly fees to multiple online directory sites – invest that money building up a network of your own online properties to get ranked for the keywords that can bring you business through an online marketing consultant

John Pratt has 15 years experience working online, let me him put his skills to work for you. To find out more, just fill out the quick form on his “hire me” page.