Conversation Economy and the Increased Value of Word of Mouth

I recently read an article on Fast Company, in which angel Investor Peter Shankman laid down a $5,000 donation bet that Yelp’s business model will fail by next year. He asks why, in the “conversation economy” that we live in, would he rely on the reviews of complete strangers when the feedback from his friends on Facebook and Google+ is so readily available. This term―conversation economy―really got me thinking. Though we’ve always placed a high value on word of mouth, social media has exponentially increased that, not only online, but in the real world. I’ll give you an example.

You can't beat these tacos.
You can’t beat these tacos.

A newer coworker at Main Street Hub recently became friends with me on Foursquare. She then began the obligatory creeping my check-ins to see what’s good (her words), when she came across a check-in at one of my favorite local Austin spots―Elaine’s Pork and Pie, and the accompanying photo. She asked me about it as we were getting coffee one morning, and I began the effusive raving that this little spot deserves. Amazing food, sweet service, and cheap prices. While we were discussing this, another coworker overheard the words “Pulled Pork Tacos,” and became interested in our conversation. Another was passing by and asked if we were talking about Elaine’s Pork and Pie, and also began talking about how much he loved the place. Remember those anti-tobacco Truth commercials, where the little asterisk appears above everyone’s head? Yeah, it’s something like that.

More than ever, now that Facebook’s Graph Search and Google+ Local search have incorporated your friends into what you’re searching for online, word of mouth is king. Positive experiences, check-ins, and good reviews from friends of potential customers (with Facebook allowing a star-rating and has teamed up with OpenTable, as well) can turn into real world dollars and ROI for a business’s bottom line. Just the opposite can happen if those experiences aren’t ideal or if poor experiences go ignored. Businesses simply cannot allow themselves to remain deaf and blind to the conversations that are going on about them. Participation is mandatory.

How has this change to the conversation economy affected your business? Have you had a similar experience like the one I describe above? Have you been to Elaine’s Pork and Pie? (If you’re in Austin, ever, GO. THERE.) Share your thoughts in the comments below.

Now go get your social on!

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What Yelp’s New Mobile Reviews Capability Means

Yelp-logoWith their latest 7.0 app update, Yelp asks you to sit down, because this one’s a biggie. In their words you can now “visit any business page, tap “add review” and go bananas.” That’s right―Yelp has added the ability for your customers to write a review in the moment, on their mobile device, via the Yelp app. Please, ladies and gentlemen, don’t go bananas. Yelp responsibly.

A few things that this could mean:

  1. Optimist – More happy Yelpers will more readily share their opinions with local businesses due to the easy nature of typing up a short but sweet review on their mobile device. (bring on the Autocorrect typos.)
  2. Pessimist – Open the flood gates of angry people. Hell hath no fury like a mobile Yelper. Now that people can easily leave reviews in the heat of the moment, without first cooling down and hopefully rationally approaching a situation (or forgetting about it entirely), 1-star review hell will break loose.
  3. Realist – There will likely be some occasional anecdotal instances of both the above, but largely things will remain the same. Elite and consistent Yelpers will continue writing their reviews, possibly more often since they can do so immediately. You may see more people hanging around the table or salon, tip tapping away their experience into their phone, but I don’t expect to see a massive influx of changes to reviews.

Here’s what it should not mean, however. All business owners should not encourage their employees to download the app and write bogus reviews for their business. I have no doubt that Yelp has thought this through, being that it’s taken this long for them to add such functionality to their app, and have put some sort of safeguards in place (geo-tagging or GPS functionality, perhaps?). Don’t be that business. It always turns out badly.

What do you think of this new, obviously overdue addition to the Yelp app? Good, bad, ugly? Share your thoughts in the comments below.

Now go get your social on!

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