Consumer Passion

Yelp's Secret Sauce

Notable article in the New York Times' Technology section, called Why Yelp Works.  Writer Saul Hansell does an about-face on his opinion of Yelp when it launched in early 2005.  Quoting Hansell:  "Who needs another another site where people review restaurants and other local businesses? It’s one of the oldest ideas on the Internet."

Well, apparently quite a few people need and use Yelp, 3.3 million users in March notes Hansell, up 87 percent year over year.  The Yelper community, it appears, is strong, and growing stronger. 

Hansell correctly identifies much of what constitutes Yelp's 'secret sauce', it's recipe for success:

• It concentrated on attracting a small but fanatical base
• it structures in motivation - the praise and attention Yelpers' reviews receive from other Yelpers
• the site has a social network/community feel

It all adds up to baking in a version of what's known as a 'viral expansion loop'.  A recent Fast Company article (Ning's Infinite Ambition) is great at explaining this little known "engineering alchemy" that enables "borg-like growth".  Yelp is able to tap into Passionate Consumers willing to share their thoughts - good and bad - about businesses they visit.  And when those consumers sign up and become part of the Yelp community, they're encouraged and empowered to share their newfound passion outlet with their network of friends.  Who doesn't want to tell their friends and family about a great new restaurant you found?  Or a dive that they simply must avoid at all costs.  And new Yelpers begin to connect with established Yelpers, and pretty soon you have groups of Yelpers holding get-togethers in cities to do 'mass reviews' (bringing fear to many businesses).  Yelp is enjoying exponential growth, without having to add a zillion employees to manage it.  What began with a concentrated effort in a handful of cities (San Fransisco the first) is now expanding across the country, and is starting to bite at industry leaders YellowPages.com and CitySearch.  Tapping passionate consumers, the real secret sauce, has its advantages.

The Two Way Conversation via Yelp

"Yelp For Business Owners" launched this week, a suite of free features that enables business owners to engage Yelp's online community of reviewers.  Yelp Co-Founder/CEO Jeremy Stoppleman:  ""With the launch of Yelp for Business Owners we've completed the positive feedback loop, so local businesses can connect with their most vocal customers in a positive and productive way."

Many business owners may be unaware of Yelp.  Some who are might be wary of the possibility of bad  reviews.  But Tuesday's announcement had some interesting facts and examples that shine a spotlight on the impact that passionate consumer reviews can have on a business.  From the press release:

80 percent of Keetsa's total business each month is directly attributed to Yelp, whether they discover us on Yelp or utilize Yelp as a research tool when searching for the best business in the market. In fact, we generate so much traffic from Yelp that I currently do not have to utilize any 'traditional' or more expensive forms of advertising, such as radio, television and newspapers.
                                                   Joe Alexander, Director
                                                   Keetsa Mattress
                                                   San Francisco, CA

"We had never heard of Yelp before and were surprised to see people talking about our business. To be honest, we were skeptical about the site at first, but after seeing a 30% increase in our business and roughly 70 reviews later, I'm happy to say we love what Yelp has done for our business."
                                              Jacob Twig and Elaina Bender, Owners
                                              The Professionals Inc., Moving Specialists
                                              Chicago, IL

"I recently stumbled across our reviews on Yelp and noticed that some of our regular customers were writing great reviews about us. We have folks who have been shopping with us for 60-70 years, and now we're starting to see much younger customers come in through our doors. I'm sure that it's due in part to our great reviews online."
                                                   Niki Russ, Co-Owner
                                                   Russ and Daughters, Market
                                                   New York, NY

"As a small business owner there are moments in time when you realize that all your hard work is about to take hold in a big way, and the day that the Yelp community started to talk about my shop was a defining moment in the history of my business. I have no doubt that the reviews on Yelp, were an important catalyst in my amazing success."
                                                   Christopher Hall, Owner
                                                   Splitends Salon
                                                   Orange County, CA

Now, the exact opposite can happen as well, so business owners should check Yelp on a regular basis to see what's being said about their biz.  Yelp, founded in San Fransisco in 2004, continues to add to its community of passionate consumers, and counts some 2.7 million local reviews on its site.   

Starbucks drop-kicks T-Mobile, hugs consumers with free Wi-Fi from AT&T

It's been about a year since Starbucks Chairman Howard Schultz penned an internal memo - which went external - bemoaning the fact that the coffeehouse chain had lost its way.  Schultz talked about getting "back to the core" and evoking "the passion we all have for the true Starbucks experience."  Fastforward to January 7th of this year, when Schultz added CEO responsibilities, and the words "Starbucks experience" came up again, along with a "relentless focus on the customer" (see post Starbucks Announces Return to Roots).

Today's announcement that Starbucks will roll out a more consumer friendly Wi-Fi service is certainly a step in the right direction to create a richer "Starbucks experience".  But holy cow, what took so long??  I've often wondered why Starbucks thought its deal with T-Mobile, where you paid $10 for a one day pass, or six bucks for an hour, was in any way a great benefit for  consumers.  It opened the door for competitors like Panera Bread and local coffee shops to offer free Wi-Fi as a differentiator.  And sure enough, if you stroll into a Panera, you'll find a dozen or more people online. Oh, and they're usually purchasing food and drink as well. 

Starbucks new deal with AT&T, nicely detailed in a post by Glen Fleishman at WiFiNetNews.com, means some 7,000 U.S. based Starbucks will offer free Wi-Fi to millions of AT&T broadband and Uverse customers ... and here's the part that calmed me down after first steaming when it seemed like an AT&T customer-only benefit ... anyone with a Starbucks Card - those refillable cash cards that you give as gifts or use yourself - can use the new Wi-Fi service for two hours each day, at no charge.  And each additional two hour block is four dollars.  And for Starbucks employees - all 100,000 of them - add free 'anytime' Wi-Fi to the perk list.     

I can hear the cries now of those of you who have to  muscle your way through the crowds at high-traffic Starbucks locations.  It will only get more crowded. But there are plenty of Starbucks with lighter traffic, like the one within walking distance of my home.  I've already planned a daily excercise routine:  grab laptop, walk half mile to lightly populated Starbucks, pay two dollars for large coffee, work online for two hours, walk home.  Total price?  Two dollars.      

All in all, especially if AT&T's Wi-Fi has fatter pipes and doesn't drop out as much as T-Mobile's, this is a great move by Starbucks - good ultimately for its bottom line and good for consumers.  I predict you'll see a sizeable jump in laptoppers as the new service rolls out (starts in the Spring).  And two hours is plenty for most folks.  I think this is the most impactful thing Starbucks could've done in the short period of time since Schulz's takeover as CEO.  We'll see what he has up his sleeve next. 

Free reusable Bags at Whole Foods today

It's "Bring Your Own Bag" day at Whole Foods today ... the world's leading natural and organic foods supermarket giving tens of thousands of reusable shopping bags to consumers at checkouts this morning.   It's all part of a move by Whole Foods to completely eliminate disposable plastic bags, which it says it aims to do by April 22, Earth Day, at all of its 270 stores.

"Central to Whole Foods Market's core values is caring for our communities and the environment, and this includes adopting wise environmental practices," said A.C. Gallo, co-president and chief operating officer for Whole Foods Market. "More and more cities and countries are beginning to place serious restrictions on single-use plastic shopping bags since they don't break down in our landfills, can harm nature by clogging waterways and endangering wildlife, and litter our roadsides. Together with our shoppers, our gift to the planet this Earth Day will be reducing our environmental impact as we estimate we will keep 100 million new plastic grocery bags out of our environment between Earth Day and the end of this year alone."

Whole Foods Market has encouraged consumers to bring their own bags for years by offering a refund of either a nickle or a dime at checkout.  The Company also sells different types of reusable bags, ranging from canvas to its new large, stylish "A Better Bag" --which owes 80 percent of its content to recycled plastic bottles.  Consumers can still choose 'paper', also an environmentally friendly option, as their paper grocery bags are made with 100 percent recycled fiber content.  More information can be found at Wholefoodsmarket.com/byobag.

Unemployment Rate Jumps: What it Means For Consumers

Non farm payrolls added a paltry 18,000 jobs last month.  The unemployment rate kicked up to 5% from 4.7.  The jobs number will be different when it's revised next month - November's revision added 21,000 to that month's jobs number.  But today's unemployment rate and anemic jobs report will add fuel to the speculative fire.  The R word will be tossed about a lot today (recession), and most will predict the Fed will continue to trim rates, whether by quarter point chunks, or fifty basis points at the next meeting.  The upside should be lower credit card, car loan and home equity rates (banks usually pass along the Fed cuts quarter point by quarter point, half by half, and so on), and home mortgage rates should tilt down slightly as well, as the bond market (best indicator of mortgage rates) reacts to the bad news today.  So if you still have your job, you'll have more money in your pocket soon (if you have credit card debt or a home equity line of credit).  Oil and gas pump prices may fall as well, if the market is predicting a softer economy.

New Consumer Term: Scobled

Jan. 4th Update:  Robert Scoble's latest post, called "Erased", is what being 'Scobled' is all about.  Please read on ... 

In the spirit of bumbling moves by companies who need to brush up on the best way to treat consumers, especially those spirited and passionate consumers who shout good things about particular companies ... I now coin the following term:

** Scobled **

Definition:  As in "you've been scobled": Banned, terminated, deleted, vanquished, liquidated, disabled ... abruptly and without warning or shot across the bow.  Vaporized. 

The big story of the day is and will be tech hyper blogger Robert Scoble being banned from Facebook for violating FB's terms of service.  He freely admits his trespass.  The interesting thing is that Facebook will take the biggest hit in this ballyhoo.  It's the abruptness of it all.  The idea that one minute you exist, and the next, months or years of information buildup and friend building is vanquished in a nano second.  No warning.  No pre-termination e-mail explaining that "we've discovered some suspicious activity, please stop".  And Scoble has been a huge (free) PR person for Facebook.  He maxed out the friend list (4,999), and tells people to contact him via his Facebook account (not any more). 

UPDATE/Addition: A second term has been added to reflect Mr. Scoble getting lots of press, which for him is all in all:

** Scobleicious **

Definition:  When you've been Scobled in one form or another, and things look initially bad, but then the lemons turn into lemonade (huge media attention) ... "things are looking  scobleicious!!!".

Consumer Passion ... Defined

If you purchase and use goods and services, you're a consumer (Wikipedia).  If you feel very strongly about something (passion according to Wikipedia), about a product you simply can't do without for instance ... then bingo, you're a passionate consumer.

This blog, as the little Gizmoz animated version of myself expresses audibly, spotlights how  remarkable products, services and customer service inspire us, and how the web enables companies and passionate consumers to connect.  Now, passion can erupt in a positive or negative direction, so this blog will also note the abysmal experiences we, as consumers, experience on a daily basis. 

ConsumerPassion has been in a holding pattern for a few months.  The anchor has been pulled, and off we go again.  Thanks for stopping by.  I don't want to take your time for granted, lest I become like the many businesses I seem to stumble into each day ...