Yelp

What do you think is the best way for Yelp to monetize the reviews and content they’ve generated, going forward? How scared should Yelp be of Google Hotpot and what should they do to maintain/grow their position?


Yelp should be very concerned with not only Google Hotpot but also other websites such as Yahoo! Local and CitySearch. With many competitors around, Yelp risks being just another review website with not much differentiation. Also, popular websites such as Facebook and Twitter can expand their businesses to include services that are similar or even better than Yelp. Furthermore, these potential competitors have the advantage of well-established names and the network of friends, who users trust much more than several strangers on Yelp.


The first option is charging users for accessing the website. Yelp can charge differently to different groups of users and even give free access to some special groups such as Elite Squad, seniors, or military families. They can also use freemium models. However, due to little switching costs, this will drive away several users, who will likely join competitors’ website. Consequently, in the long term, Yelp is losing market share and can lose ground altogether unless it finds some ways to leverage its website to differentiate itself and bring more values to users.  This may mean to turn this website into a high-end place for quality and trusted reviews by hiring “review experts” or giving more incentives to great reviewers. This option is very hard to implement unless it has very creative, innovative and dedicated technical team. This solution may also work only in the short-term since more and more companies offer free access with similar or even better services.

The second option is to invest more money and effort in the sales team, making them greater in number and more aggressive and creative in reaching out businesses for more advertising money. Different from the first option, this one does not guarantee that the time and money invested for the sales team will be made up and the sales team can even bring in more money. Another uncertainty is that no matter how smart and dedicated the sales team is, they cannot persuade businesses to sponsor if Yelp does not create more incentives for those businesses.

The third option is to partner with other applications such as Facebook, Twitter, and Microsoft Bing. This way, Yelp will get more exposure and build its brand name, thus getting more recognition and users. Business will be more likely to spend advertising money on Yelp. Yelp is already listed as a partner site on Facebook. However, it is hard to get the buy-in from other applications since they themselves can expand their services to include reviews like Yelp. Even though they agree to partner, there can be conflicts of interests or different business strategies that Yelp must depend, compromise or sacrifice. 

The fourth option is to sell the business to whoever is interested. This is probably the easiest way, no longer worries about ways to get more revenues and be competitive. Then, Yelp just gets one-time money and the price offered may be far below what Yelp perceives. This may be a recommendation given Yelp services and the popular business model of free access from several websites. Also, social websites such as Facebook have more advantages since reviews or requests are among circles of friends, who we trust more than strangers on Yelp.

The fifth option is to reach out further, to countries with fewer competitions such as in developing countries, where there are no or few websites exclusive for reviews with the extensive interface and services in compared with Yelp. Yelp can have its website to be translated into local languages and hire local people to do the job. Since Yelp already has the website, it just needs to translate into different languages, so the cost of this translation is insignificant compared with what it had invested in the website. Yelp may use some models similar to “franchise” so it can reduce risks. This option definitely poses some risks. Doing business in a foreign country, especially with different language and culture, requires the management to be very adaptive and Yelp likely to be dependent on the local people to manage and operate.

Among these options, the third and fifth look much better given the harsh competition and this globalization trend. For the best solution, Yelp should implement both of them.

Some interesting contrasts between Webvan and Yelp

Of course, Webvan and Yelp cases share some similarities, but there are many interesting contrasts partly due to their different industries, both grocery and last-mile delivery industries for Webvan and information goods industry for Yelp. First, during the first few years, Webvan tried to launch its services in several big cities while Yelp just focused on establishing its presence in San Francisco. Second, Webvan spent over $100 million upfront on distribution centers whereas Yelp needed very small infrastructure investments. Third, Webvan needed a complicated supply chain management since it’s in both grocery and last-mile delivery industries. Meanwhile, Yelp was in information goods industry and dedicated to its web content. Finally, Webvan’s direct source of revenues was users and could have made profits if the number of users was big enough. In contrast, Yelp already had a great community of users but could not find ways to monetize this.

Amazon’s personalization feature should be more personal

Amazon is an ecommerce trailblazer. From the long tail strategy that Jeff Bezos adopted for the company to its groundbreaking affiliate scheme. Where this online giant leads, others follow, including Packt.

Amazon was one of the first websites to introduce personalization and the ability to push targeted products to customers based on their browsing and purchase history. This transformed the customer experience and gave us products and options that we weren’t aware of and ultimately persuaded us to buy more.

I like French films but my French isn’t great, so I rely on reviews and recommendations from English speakers. With Amazon’s personalization, I get a regular stream of suggestions and ideas of films to watch. However I think Amazon’s personalization algorithm is flawed and needs updating.

My main gripe is that it doesn’t take into account fast-moving, regular purchases against one-off or once-in-a-while items. Before expanding into the world's biggest department store, Amazon's core business was books, CDs and DVDs. Personalised recommendations of these reasonably low-priced items work well and I have bought many a French film thanks to them. However if I bought a new LCD TV, I don’t expect to be presented with a list of other LCD TVs every time I visit the site over the next few weeks.

Amazon also heavily weights its personalization results with your most recent activity. So if I was to visit any page on its website, even if someone sent me a link to a product with funny reviews, my next session would be dominated by similar products. One of the reasons I included this here was because I had been sent a link to the reviews of an album by a questionable celebrity duo and for my next visit, I was presented with the male half of the duo's back-catalogue. This has happened with other products.

However on researching this blog, I found a link to an article about funny Amazon reviews. I checked out this relaxation tank on their .com site, with some very funny customer comments. I then visited the homepage to see what I was presented with, expecting other relaxation-based products and instead, there was a list of the other items with funny reviews. Maybe Amazon has cottoned on, with its .com site leading the way.

Over Christmas, I used Amazon to buy many of my presents, as many of us did, however even though I was happy to buy my sister a copy of the Style Book: Fashionable Inspirations, I didn’t want to see similar products the next time I visited. I want to see suggestions of similar products that I'm interested in, not those that I've bought for others. My sister may disagree.

With Amazon, you can delete items from your browsing history, however for an intelligent system, I shouldn't have go out of my way to visit my browsing history and then scroll down to delete the things I wasn't interested in seeing. They could make this easier for customers by offering checkboxes on product pages and in the checkout procedure. Even if there was an option for me to state whether the purchase is a present and if I wanted to remove it from my browsing history, would be a good start.

Amazon, with all its customer data and purchase history, should also understand what products are bought regularly and those that we buy less frequently. These products should be removed from the personalization adverts, or at the very least, show me one or two products, not a never ending list. For what has been designed as an intelligent system, it hasn't scaled its intelligence as the site has scaled.

The single most popular shopping cart conversion clincher

The conversion and abandonment rates of our shopping cart are two of our most important ecommerce KPIs. The shopping cart has been optimised to within an inch of its life, following best practice and tips from industry leaders.

This has resulted in:

• A standout checkout button with available card symbols and a trust seal placed above the fold
• Checkbox for easily copying over shipping to billing address
• Product availability 
• Breakdown of price
• Upsell to related products
• Shipping costs

In early 2011 we're adding premium shipping options and a save cart for later button.

Am I missing anything here to help optimize our checkout further? Let me know what you think.

These improvements improved conversion and subsequently our abandonment from the cart dropped. However, there was still room for improvement. So where was this extra juice to be squeezed from? The only concrete way to find out was to turn to our customers. I've mentioned in another post how talking to our customers is probably the most important and successful tactic we employ for improving our services and this is another example of that.

We began e-mailing and surveying customers that dropped out of the cart to ask them why and also wrote to those that converted to ask them what swayed them. 

The number one reason? Shipping.

Due to the location of our printers and distributors, Packt offers free shipping to certain countries and charges for others. For those with free shipping it was a deal breaker, for those that we charged shipping for, it was the number one reason for abandoning. For many customers, the shipping costs put doubts in their minds about the overall cost and was a push to find the same product cheaper elsewhere.

This was difficult to counteract as it would result in changing our business model or heavily reducing our profits. So what was left for us to do? How could we turn these customers around? 

The answer was with our eBooks. For all print book orders, we added the upsell message for our eBooks and outlined how these offered quicker access. This didn't reduce the price of shipping but offered a relatively cheap way to start reading the book as soon as it had been purchased. Of all the optimisations we introduced on the site, this was the most effective in terms of reducing abandonment. 

So sometimes, you can follow as many best practice guides as you like, however in order to find out how to take your site's performance to the next level, the answer is with your customers. 

Enhancing Microsoft Dynamics GP with E-Commerce

Our most recent post on ERP Software Blog discusses the benefits of integrating e-commerce with an ERP system like Microsoft Dynamics GP. From allowing customers the ability to browse products, shop, and place orders on‐line at anytime around the world to streamlining shipping orders, this post explains real world benefits of connecting an e-commerce storefront with Microsoft Dynamics GP

Check out the full post on ERP Software Blog and find out how The Salvation Army was able to solve global logistical challenges and tap into new markets with Azox E-Commerce solutions for Microsoft Dynamics GP.

Spring is Around the Corner-Get Ready!

March through May can be the biggest quarter of the year for baby and maternity sites. Are you ready to go? Start preparing by:

1) Making sure your loadin up spring inventory
2) Work on SEO -be focusing on terms that relate to this time of the year
3) Spring is huge for baby showers-make sure your ready to go with your gift regestry
4) Put in any design requests early-you will want a fresh spring look or grahic for your front page!

We Want to Hear From You

We would love to feature your story or experience about Pure-Ecommerce.com on our website. Pure-Ecommerce.com has a page rank of 4 so it's an excellent one way link for your site. If you would like to be featured on the Client's Page please email us at pureecommerce@gmail.com.