Yelp is trying to help small business owners quantify how much the company’s website is helping them.
The site announced a new feature, the Yelp Revenue Estimation Tool, that acts as a revenue calculator for business owners to determine how much money Yelp customer leads have generated.
The announcement of the new calculator comes on the heels of a study from Boston Consulting Group showing that local businesses had generated $8,000 per year through a free listing on Yelp and $23,000 annually if they were a Yelp advertiser, writes Matt Halprin, Yelp’s Vice President of Revenue and Analytics, in a post on the company’s official blog.
Of course, these figures should be used as examples and may be slightly exaggerated considering the source. The concept of putting a dollar figure on revenue generated from a particular web visit, however, is certainly interesting and different than trying to determine how much a page view from a particular ad campaign is worth to a company.
The Yelp Revenue Estimation Tool multiplies the number of leads Yelp claims to have sent to a particular business by an average amount that a customer will likely spend.
The study from Boston Consulting Group found that small businesses dedicate little of their advertising budgets to online resources such as Yelp, just 3 percent, according to the study.
In the report, authors Sebastian DiGrande, David Knox, Kate Manfred, and John Rose write:
Most small businesses operate the old-fashioned way, with little recognition of the Internet as a channel or a source of leads. Many small business owners are not even aware that they have an online profile that they could be actively managing on many popular sites.
Yelp believes the Yelp Revenue Estimation Tool will allow business owners to determine which online advertising outlets are giving them the best return on investment and will provide them with statistics that are more meaningful to their bottom lines.