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Have you heard about Yelp’s Revenue Estimation Tool that aims to show average revenue the review site generates for a business? The new ROI calculator is simple to understand as it multiplies customer leads in a given month by an average revenue-per-customer number.
Personally, I feel that Yelp has the best intentions trying to quantify how much the company’s site helps a business. Unfortunately, they’re missing the mark on a key figure.
What Is A Lead?
I’m not debating that Yelp is a significant source of traffic for most restaurants. My primary issue is their definition of a “lead.” Yelp bases their leads on a variety of items, including mobile check-ins/calls, uploaded photos, clicks to your website, deals sold and OpenTable reservations. No matter the action, they are all weighed the same in the lead totals.
How can Yelp put a dollar amount on clicks to a website and call it a lead? A majority of website visitors never convert into customers, and using this data in their Revenue Estimation Tool seems misleading. Instead, the tool should measure deals sold, checkins and OpenTable as more accurate predictors of revenue opportunities. These three lead sources actually demonstrate customer intent or a current visit to your business.
Yelp already holds an unfriendly reputation for it’s review filtering algorithm. To me, the tactic seems a bit deceptive if you see how the infamous review site is overestimating its value. The new tool has a lot of potential, but for now Yelp seems to focusing on ways to combat its criticism.
What do you think? Is the new Yelp tool a useful predictor of revenue, or is it meant to be a PR cover up for their unfavorable press? Let us know in the comments.
The post Rethinking Revenue: The Truth Behind Yelp’s Revenue Estimation Tool appeared first on LocalVox.
