Should I pay Yelp for search placement?

A great question came to our attention the other day.

Yelp has been in touch with us to get 600 times a month at top of carpet cleaning list for $300 a month with a year guarantee, is this good?

Is it worth it to pay Yelp $300 a month to appear at the top of a topic search 600 times a month?

The actual offer looks something like this:

• $300/mo – promotes you to 1,500 people in your area looking for a business like yours.
• $500/mo – promotes you to 4,000 people in your area looking for a business like yours.
• $1000/mo – promotes you to 10,000 people in your area looking for a business like yours.

While we can’t answer that question definitely without knowing more information about the business, let’s dig in and show you how you or we would go about figuring this out.

Are there any resource constraints?

Meaning, within reason, could the business handle any number of requests for cleaning?

Or is there a cap at which point you’d need to hire more staff, buy more equipment, etc?

This also means budget.

If you have a $300 total budget for Internet Marketing, taking this offer will zero out your budget and you’ll lose out on any other opportunity that might provide more value.

What is your conversion rate?

Basically, what we’re asking here is: What percentage of people who see your phone number online pick up the phone and actually make an appointment?

If customers can make an appointment online via a form, factor that in, too.

This will have to be an estimation, and most of our clients don’t have any research or analytics on which to base this estimation, so it is generally a very high estimation. If you have Google Analytics set up, you can track this type of information and combine it with a “How did you hear about us?” if someone calls.

Fortunately, we know from research that, on average, about 32/1,500 or two percent converted from visitor to Yelp to the website and about 0.3 percent from impression to actual customer.

So what that generally means is that, you can expect 4.5 new customers a month for $300.

All told, that means you’ll be paying $67 for a new customer.

How profitable is a single conversion?

Not counting the $300, what is your profit margin on a single customer for the product or service you’re selling?

If it’s more than $67 and you’re not resource constrained, go for it!

If it’s less than $67, don’t do it!

If it’s $69 and you are resource constrained look around for avenues that will give you more bang for your buck or return on investment.

If you can’t find one, go for it!

In the end, it’s not much of a mystery. It just takes some time and research to get an answer.

On a personal level, we prefer to stay away from paid search on Yelp because there aren’t as many research tools available as there are for, say, Google AdWords.

That’s not to diminish Yelp. It’s a risk/reward scenario. You take more of a risk when you buy placement on Yelp because there are more unknowns and in return, you get a potentially higher upside.

So, what’s your take on Yelp?